Malaysian powerco told to keep reserve buffer

Malaysia's Energy, Communications and Multimedia Minister, Datuk Amar Leo Moggie, has told the country's state-owned power utility - Tenaga Nasional Bhd - that it may be allowed to keep a lower electricity reserve margin at some stage in the future but its priority at the moment is to ensure a secure, undisrupted power supply. This mild rebuke comes after the September 1st blackout that hit five northern states.

Before the blackouts, the Malaysian government had principally agreed to Tenaga to cut its reserve margin to just a little under 25% from the current level of 30%. Such a move would have spared the utility around US$263.2 million in maintenance costs a year.

However, the minister now feels that the country needs better assurances of supply security as Malaysia was a "a fast-growing and developing country" and that "it is imperative that Tenaga ensure a strong power transmission network and no part of the country lacks power supply."

It is believed that Malaysia's demand for electricity is estimated to grow at an annual rate of 5% to 7% for the next decade and now accounts for around 18% of total final energy consumption in the country.

Moggie has confirmed that the power industry has invested around US$1.3 billion over the past eight years to guarantee a reliable energy infrastructure and that a further US$7.9 billion was required over the next decade to maintain the infrastructure.

The minister also said, whilst officiating at the Co-generation and Energy Efficiency 2003 seminar in Kuala Lumpur, that "as we become an increasing mature market, we can afford to have less reserve capacity in our system" and that "as demand increases over time, instead of speeding up [the] new planting-up program, we will let the new planting up be deferred as we can now afford it. Then over a period of time, the reserve margin will go down."