1 Why Peninsular Malaysia Needs Nuclear Generation 2 Nuclear Power Preparation and Steps Taken 3 Garnering Public Acceptance 4 Nuclear Power Development Timelines 5 The Prayer 2
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Nuclear Renaissance – World Challenges, Nuclear Opportunities Megatrends – Demographic change, urbanization, climate change, globalization Drivers for new nuclear renaissance: o Increasing energy demand; climate change; economics; insurance against future price exposure; improved operation and performance records, security of supply, technology-intensive industries, and confidence building towards a culture of safety. TMI (1979) Hiking of fossil fuel price Renewed interest Chernobyl (1986) Climate change Market expansion 4
Why nuclear for Malaysia (3 E’s – Energy, Environment, Economy) Energy security Increasing energy demand but facing challenges such as indigenous natural gas depletion, dependency on foreign imported coal, limited hydro resources in Peninsular, slow uptake of RE, etc. Environmentally-benign energy resources Malaysia commitment on climate change and global warming mitigation.. The Prime Minister of Malaysia pledged on voluntary reduction of up to 40% in terms of emissions intensity of GDP by the year 2020 compared to 2005 levels (COP15 @ Copenhagen, Denmark). Driver of New Economic Model (NEM) High income nation. High-skilled knowledge-workers. Center of excellence and technology savvy. Uplift country’s international competitiveness. 5
Per Capita Income TRANSFORMING MALAYSIA (USD) ~17,500 High-Income Economies average annual growth of 6.5% ~15,500 Middle & Lower Income Economies business as usual ~7,000 current per capita Eight Strategic Reform Initiatives (SRI’s) income 2010 2015 2020 1MALAYSIA: People First, Performance Now April 2009 FOUR PILLARS TO ACHIEVE Preservation & Enhancement of Unity in Diversity GOVERNMENT TRANSFORMATION PROGRAMME (GTP) January 2010 6 National Key Results Areas (NKRA’s) for Effective Delivery of Government Services VISION 2020 ECONOMIC TRANSFORMATION PROGRAMME (ETP) March 2010 8 Strategic Reform Initiatives (SRI’s) & 12 National Key Economic Areas (NKEA’s) New Economic Model: A High-Income, Inclusive & Sustainable Nation 10 TH MALAYSIA PLAN Macroeconomic Growth Targets June 2010 & Expenditure Allocation 11 TH MALAYSIA PLAN Smooth Implementation of Government’s Development Program 6 6
NE Asian Nuclear countries Source: Key World Energy Statistics, 2008 and The World Fact Book, 2009
12 Entry Point Projects (EPP) and 7 Business Opportunities (BO) resulting USD24 bn GNI and 52K jobs in 2020 DIVERSIFY GROW Build alternative energy SUSTAIN capabilities Grow in downstream 9. Reduce energy bill through Continue domestic Oil & Gas 4. Unlock latent gas demand through energy efficiency production LNG import 10. Build up solar power capacity 5. Create a regional oil storage and 1. Enhanced oil recovery 11. Ensure best practice nuclear trading hub 2. Develop small fields deployment Make Malaysia # 1 Asian hub for oil 3. Increase exploration activities 12. Drive industrial growth in field services EPPs Sarawak with big hydro 6. Increase presence of major international Oilfield services players 7. Create regional fabrication champions 8. Encourage JV with world-class companies 1. Increased oil & gas production 2. Increase volumes in primary logistics 5. Growth driven power demand abroad 3. Increase of petrochemical output 6. Growth driven transmission and through process improvement distribution capacity BO 4. Increase marketing of petroleum 7. Improve structure of Malaysia products energy supply industry 2020 GNI 2020 GNI 2020 GNI 2020 Total 2020 Total 2020 Total impact: impact: impact: new jobs: new jobs: new jobs: USD4.5 1 USD7.2 2 USD12.2 44,000 2 600 7,600 Billion Billion Billion 1 Assuming Bloomberg Brent future price curves for oil price (103 USD/ bbl in 2020); not including USD4.5 Bn from make-up GNI (i.e. GNI generated to maintain current oil production) 8 2 Not including “multiplier” effect of ~USD2.5 Billion and 27,000 new jobs coming from new industries that will develop on th e back of a new gas supply (EPP 4) SOURCE: OGE NKEA Lab
OGE vision in 2020: bigger, more value INDICATIVE ONLY adding, more efficient, and more diversified 5 GW Hydro, up to 1.25GW Solar , 2020 2 GW Nuclear power 10 million tonnes regional oil storage and 2017 trading hub #1 oil field services hub in Asia - Leading oil & gas Regional HQ of MNCs, new regional 2015 producer in South champions East Asia stable production at 550- Reduce energy bill by 5% through energy 600 thousand barrels per 2014 efficiency best practices day First LNG imports into Malaysia to 2013 substitute expensive fuel and create new industries Oil, Gas and Energy central to Malaysia 2010 economy (20% of GDP) SOURCE: OGE NKEA Lab
To have nuclear by 2021, the government must launch ENERGY TODAY If developed, nuclear would be cost competitive but This requires for the government to start today with it takes 10-11 years to build the preparatory phase ▪ Promote public Comparative cost of energy & CO2 emission indicator Public Levelised cost of energy, RM sen/kWh acceptance education 51 44 ▪ Sign/ratify relevant 21 19 19 International treaties & governance conventions Coal Nuclear Gas Gas Solar ▪ Put in place detailed CCGT OCGT (centrally Regulatory generated) regulations context Fastest timeline supported by all stakeholders Months ▪ Acquire approval Plant Site for plant sites Construction & Acquisition ▪ Obtain public commissioning 44 30 60 134 support in locality Vendor procurement Pre-project activities 2020 Total Assumptions: General: WACC 7.6%, 1USD = RM3.2 new jobs: Coal: CAPEX USD1530/kWe, plant efficiency 46%, coal cost 5 USD/mmbtu, O&M cost of 6.16USD/MWh, load factor 85% 2,600 Gas CCGT: CAPEX USD1000/KWe, plant efficiency 53%, gas price 8 USD/mmbtu, O&M cost of 5USD/MWh load factor 85% Gas OCGT: CAPEX USD700/KWe, plant efficiency 30%, gas price 8 USD/mmbtu, O&M cost of 5USD/MWh load factor 15% Solar centrally generated : CAPEX 2812USD/Kw O&M 1% of CAPEX, lifetime: 20 years, hours utilization 1,300/year 10 SOURCE: OGE lab; TNB data; IAEA data
• The pattern/shape of the demand has a significant impact on the technology selection • Different technologies have different technical and economic characteristics and operational capabilities 14 14 Served by high-cost generators 12 12 (e.g., gas turbines), also hydro Hourly Load [GW] 10 Hourly Load [GW] 10 8 8 6 6 Served by medium-cost flexible generators (e.g., coal, combined cycles) 4 4 2 Served by low-cost base load generators Sort highest to lowest 2 (e.g. nuclear) 0 0 Jan Mar May Jul Sep Nov 0 1460 2920 4380 5840 7300 8760 11
Load Profile on 20 May, 2010. Peak Demand: 15,037 MW (Latest) Minimum demand: 10,258 MW Need to be supplied by Base Load Plants 12 Source: TNB-NEU, 2010
Generation Profile DEMAND Coal BASE LOAD Gas Hydro Coal (35%) Gas (~50%) 13 Source: TNB-NEU, 2010
Peak demand is expected to grow by 3.2% between 2010-2020, overall( 2010-2030), the peak demand is expected to grow by 2.6% 14 Source: TNB-NEU, 2010
Gas Oil Coal Hydro Distillate Distillate oil 100% Hydro electric 90% Coal 80% 70% 60% 50% Oil 40% Natural gas 30% 20% 10% 0% 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 15
• Petronas imports JDA Phase 2 around 25% of our gas 300 mmscfd SONGKHLA JDA from West Natuna (150mmscfd) (Indonesia) and JDA PM-3 THAILAND (Thailand) LAWIT/BINTANG TTPC (220mmscfd) (450mmascfd) JERNEH (350mmscfd) GELUGOR RESAK PRAI (200mmscfd) Associated Gas ANGSI (385mmscfd) GPPs KERTEH (280mmscfd) PAKA (2000mmscfd) SEV / GB3 KUANTAN DUYONG (150mmscfd) PORT KLANG KUALA LUMPUR West Natuna „B‟ SERDANG CONNAUGHT West Natuna A (150mmscfd) BRIDGE 100 mmscfd PORT DICKSON SEGAMAT MELAKA East Natuna 1000 mmscfd P. GUDANG SENOKO 16
Availability Of Natural Gas Supplied by Petronas • Power sector needs 1350 mmscfd at least until 2030. • Local gas resources are depleting • Future gas development will be more challenging: High CO 2 Smaller fields Costly • Future demand cannot be met from indigenous sources. We need to import, most probably in the form of LNG. 17
Hydro Power Stations in Pen. Malaysia Total Capacity ~ 1911 MW, including mini hydro in the Cameron Highlands Scheme 18
Based on SMEC Hydro Hydro Resources Potential Ranking Study 2005 TERENGGANU 1.Ulu Terengganu; 212MW PAHANG 1.Tekai; 156MW 2.Ulu Jelai; 372MW 3.Maran; 108MW 4.Telom; 132MW 5.Raub-Bentong; 70MW PERAK 1.Sg. Pelus; 35MW 2.Chenderoh Low Head; 10MW 3.Kerian-Selama; 21MW KELANTAN Total remaining hydro potential in Peninsula 1.Lebir (multipurpose); 270MW Figure 1 is 1801.4 MW, mainly high cost peaking hydro Hydro Ranking Appraisal Study 2.Nenggiri (multipurpose); 416MW Project Location 19 19
Renewable Energy Cost and Capacity Projections • Renewable energy (RE) could provide more contribution towards fuel diversification and emission reduction • KeTTHA will roll out RE Act and Action Plan which will include Feed-In Tariff • Feed-In Tariff will enable energy from RE sources be purchased at premium price - RE contribution is expected to increase 20
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