WHY NUCLEAR and to share relevant Government decisions with respect to Nuclear Power Development (COD 2025+). Deploying Nuclear Energy for Power

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2 WHY NUCLEAR and to share relevant Government decisions with respect to Nuclear Power Development (COD 2025+). Deploying Nuclear Energy for Power Generation is one of Entry Point OGE Projects (EPP11) in Economic Transformation Programme Report (25 Oct 2010) Program (ETP) NKEA Oil, Gas & Energy (OGE) Sector. Pre-Project Activities carried out by Malaysia Nuclear Power Corporation (MNPC) and tentative nuclear timeline. Malaysia s view on SMRs.

3 MALAYSIA MALAYSIA (2010) Land Area: 329,733 sq. km Population: 28.3 million (2010 Census) PENINSULAR MALAYSIA 40% of land area; 80% of population. STATES OF SABAH & SARAWAK 60% of land area; 20% of population.

4 Generation ELECTRICITY PRODUCTION & SUPPLY CHAIN & REGIONAL DEMAND IN MALAYSIA Transmission Distribution Grid Transmission (Single Grid Operator Per Region) Distribution (Regional Distributors) Power Plants (Multiple Generators) Peninsular Malaysia, 91% Sub-Station Sabah, 4% 5,407 GWh Energy Sources 106,762 GWh Coal 43% Peninsular Malaysia Sarawak, 5% 2008 Coal 26% Gas 58% Hydro 10% Diesel 6% Sarawak Sabah 4,442 GWh Gas 60% Hydro 8% FY2010 Gas 52% Hydro 5% FY2009 MFO 19% Diesel & Others 13% Source: Malaysia NKEA OGE Laboratory 2010

5 PENINSULAR MALAYSIA POWER GRID Source: Tenaga Nasional Berhad (TNB)

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7 LONG TERM SOLUTION BASE-LOAD OPTION FOR ELECTRICITY GENERATION Supply and price restriction of FOSSIL FUELS dan HYDRO RESOURCES Supply restriction of intermittent RENEWABLE ENERGY (RE) ENVIRONMENT ECON COMPETITIVENESS ADVANTAGES Reduce GHG emissions Global Warming Solution Sustaining Stable Electric Tariff CHEAP fuel LONG Plant Lifetime LONG operational duration of fuel 7

8 % 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% Distillate Hydro Oil Coal Malaysia has been highly dependent on fossil fuel sources oil in 1970s and early 1980s and gas in late 1980s till 2000s and recently on both gas and imported coal 10.0% 0.0% Gas Moving forward, we need to explore alternative sources as well as capitalizing on conventional energy sources 8

9 Dependency on Fossil Fuel, 2010 Fossil fuels dominate 95% of total energy mix Need to DIVERSIFY and reduce fossil fuel dependency Total energy generation in 2010 is 101,073 GWh Source: TNB System Planning, November 2010

10 Future Power Demand till 2030 Malaysia s Electricity demand will rise to become a developed nation. New Power capacity must be planned and installed. Revised 2010 forecast Initial 2010 forecast ~ 15,000 MW in 2010 Revised 2010 forecast Year Initial April 2010 Forecast forecast Revised Nov 2010 forecast Forecast ,779 MW 17,943 MW ,669 MW 21,228 MW ,967 MW 23,592 MW ,193 MW 25,817 MW Initial 2010 forecast Source: TNB System Planning, November 2010

11 GWh Future Generation Mix in Peninsula SCENARIO A: The most economic generation mix is not well-balanced, more risky SCENARIO B: Maintaining current generation mix ensures security of supply, balanced & diversifed supply sources, but at higher costs Gas supplied at subsidised price of RM10.70/mmBTU 5.2% 40.2% 4.0% 50.6% Gas to be supplied at market price of RM40/mmBTU 3.9% 87.3% 19.5% 31.2% 4.4% 73.6% 4.6% 61.2% % Gas supplied at subsidised price of RM10.70/mmBTU 5.2% 4.0% 47.8% Gas to be supplied at market price of RM40/mmBTU 3.9% 46.7% 9.8% 5.0% 42.5% 17.8% 4.6% 36.5% % 45.5% 8.8% 2.5% 2.9% Gas Coal Hydro Nuclear SOURCE: TNB % 48.2% 49.4% 42.7% 41.1% since 1 st June 2011, gas price to the power sector was increased by 28%; from RM10.70/mmBTU to RM13.70/mmBTU Nuclear Power is required in both scenarios

12 Energy NEED FOR NUCLEAR POWER IN PENINSULAR MALAYSIA Energy Demand Growth without Policy Intervention Targeted Slower Energy Demand Growth with Policy Intervention: Energy Efficiency (EE) & Demand-Side Management (DSM), Fit-In Tariffs (FIT), etc. DEMAND-SUPPLY GAP: NEED NUCLEAR POWER Energy Resource & Supply Constraint without Policy Intervention Increased Energy Supply Options with Policy Intervention: through Green Energy Development, Increased Oil & Gas Exploration & Production in Deeper Seas, Residual Fields, etc Year Nuclear energy need to fill energy demand-supply gap together with renewable energy on supply side & energy efficiency & demand-side management. Source: Economic Planning Unit (EPU), Prime Minister s Department, 2009

13 26 June 2009: Government agreed to consider nuclear energy as one of the options for electricity generation, post 2020 particularly in Peninsular Malaysia set up Nuclear Power Development Steering Committee (JPPKN) and three (3) Working Committees allocate RM25 million for a period of 3 years ( ) to implement activities under JPPKN Start of national interest in nuclear energy for POWER Generation Energy Forum 9 th August, 2010Sheraton Imperial, Kuala Lumpur 13

14 NUCLEAR POWER DEVELOPMENT STEERING COMMITTEE NUCLEAR POWER PROGRAM WORKING COMMITTEE (MNA) Educational Program and Public Awareness Human Capital Development Technology Assessment NUCLEAR POWER PROJECT WORKING COMMITTEE (TNB) Site Identification Nuclear Fuel Procurement Planning Nuclear Power Plant Conceptual Design (including Project Management and Quality Assurance) REGULATORY DEVELOPMENT COORDINATION WORKING COMMITTEE (AELB & ST) Regulation and Licensing of Electricity Generation Regulation and Licensing of Nuclear Power Plant Malaysia NEPIO Deliverables 14

15 Summary of Government Decisions 16 th July 2010 Government adopted National Nuclear Policy for energy and nonenergy applications 10 th December 2010 Agreement to establish a Nuclear Energy Programme Implementing Organisation (NEPIO) as recommended by IAEA NEPIO to be administered by Prime Minister s Office PAST GO NUCLEAR DECISION in 2013 or 2014? Completed Preliminary Feasibility Study and Preliminary Site Selection & Ranking Continuing with Full Feasibility Study and Site Investigation to secure Site License. Completion of planned Pre-project activities by MNPC in 2013/14 TODAY th June 2009 Consider nuclear energy as one of the options for electricity generation post-2020 in Pen. Malaysia Allocated RM25 million for th October 2010 ETP launched Nuclear energy identified as one of the 19 Entry Point Project (EPP) under Oil, Gas & Energy Sector 7 th January 2011 Establishment of MNPC as NEPIO MNPC will lead the NP planning based on IAEA Requirements and ETP Nuclear Timeline ETP Oil, Gas & Energy 5 GW Hydro 1.25 GW Solar 2 GW Nuclear

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17 OGE vision in 2020: bigger, more value adding, more efficient, and more diversified INDICATIVE ONLY Leading oil & gas producer in South East Asia stable production at thousand barrels per day GW Hydro, up to 1.25GW Solar, 2 GW Nuclear power 10 million tonnes regional oil storage and trading hub #1 oil field services hub in Asia - Regional HQ of MNCs, new regional champions Reduce energy bill by 5% through energy efficiency best practices First LNG imports into Malaysia to substitute expensive fuel and create new industries Oil, Gas and Energy central to Malaysia economy (20% of GDP) SOURCE: OGE NKEA Lab 17

18 Solar for peak, Nuclear for baseload Nuclear & renewable energy complement each other Opportunity for solar energy to replace gas! In Malaysia, peak demand coincides with period of sunlight! Peak Demand Baseload generation provides a role for nuclear energy.

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21 Four (4) critical path items must be addressed with highest priority to ensure prompt delivery, which are: Item 1 awaits commencement of RFP from shortlisted consultants Items 2 and 3 are on-going. MNPC has signed a contract with a consultant from Vienna, Austria in June 2011 to undertake a one (1) year legal and regulatory study. For item 4, MNPC and TNB made a special briefing to the Government in Jun 2011 regarding selection and ranking of five (5) candidate NPP sites in Peninsular Malaysia. MNPC to appoint international consultant in Dec

22 The four (4) high priority items identified above must be completed during the pre-project phase. Comprehensive Studies to be completed during Pre-Project Phase: 1. Legal and Regulatory Infrastructure Study ( ) 2. Communication Strategy and Plan ( ) 3. Nuclear Power Infrastructure Development Plan (NPIDP), Feasibility Study and Site Evaluation ( )

23 MNPC is a company limited by guarantee and not having a share capital and incorporated on 7 January MNPC is administered by the Prime Minister's Department. To plan, spearhead and coordinate the implementation of nuclear energy development programme for Malaysia and to take the necessary action to realize the development of the first nuclear power plant in Malaysia (targeted by 2021 as per ETP Nuclear Timeline). To ensure the development of nuclear infrastructure for the country is in line with International Atomic Energy Agency (IAEA) guidelines covering 19 key areas (national position, nuclear safety, management, funding and financing, legislative framework, safeguards, regulatory framework, radiation protection, electrical grid, human resource development, stakeholder involvement, site and supporting facilities, environmental protection, emergency planning, security and physical protection, nuclear fuel cycle, radioactive waste, industrial involvement and procurement). To identify company or special purpose vehicle (SPV) to be the owner and/or operator of nuclear power plant.

24 Cabinet Committee on Nuclear Power, chaired by Prime Minister Board of Directors Chairman: Y. Bhg. Prof. Dato Dr. Aziuddin Ahmad (Independent) Ex-Officio: Representative from EPU Representative from KeTTHA Representative from MoSTI Member: Representative from PEMANDU Chief Executive Officer Dr. Mohd Zamzam Jaafar Company Secretary Ms. Shamsiah A Rahman

25 Chief Executive Officer 1 Director 3 Senior Manger/Manager 4 BOARD OF DIRECTORS Assistance Manager 1 Executive 4 CHIEF EXECUTIVE OFFICER Support Staff 3 Total 16 NUCLEAR POWER PROGRAMME DEVELOPMENT REGULATORY COORDINATION PROJECT DEVELOPMENT CORPORATE SERVICES DIRECTOR Officer from MNA DIRECTOR Officer from AELB DIRECTOR Officer frm x-tnb SENIOR MANAGER/ MANAGER SENIOR MANAGER/ MANAGER SENIOR MANAGER/ MANAGER Corporate Communications SENIOR MANAGER/ MANAGER ASST MANAGER HR & ADMIN EXECUTIVE EXECUTIVE EXECUTIVE FINANCE EXECUTIVE * Replicating the Steering Committee (MNPC Board of Directors) and 3 Working Groups formed in July 2009 (see slide #43). MNPC is a lean organisation. SUPPORT STAFF

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27 The TNB-KEPCO Nuclear Pre-FS project was completed in Jun 2010 and the 3 primary objectives were met satisfactorily. Major deliverable is Master Project Schedule. This Pre-FS is the sole contemporary and current study on nuclear power in Malaysia soon after announcement made on 04 May 2010 by YBM KeTTHA. A copy of Final Report was submitted to Government (EPU, EC, KeTTHA, MOSTI) on 15 July Report structure: Main Report 12 Chapters Pre-FS Final Report Appendix Primary Correspondences + Other Reports TNB-KEPCO Joint Workshop June Marriott Hotel, Putrajaya

28 *STAGE 1 Requires Government Approval/Support STAGE 2 STAGE 3 Government ( ) Site Selection Stages ) ( ) ( ) Approval/ Support ( ) Public Acceptance Programme (2010) - Site Selection & Licensing Procedures (2011) - Acquisition/Gazette the Preferred/Confirmed Site (s) (2012) -Issuance of Class F Site Licence on 1st NPS Site (2013) Site Feasibility Study/Evaluation & Licensing - Site Feasibility Study/Evaluation on 1 or 2 Preferred Site(s) - Confirmed 1 st NPS Site - Site Acquisition/Gazette - On Site Meteorological Data Acquisition - EIA, SIA & RIA Reports on 1st NPS Site - Apply Class F Site Licence on 1st NPS Site Ranking & Short Listing of Preferred sites -On the ground Site Verification & Qualification on 5 Candidate sites -Ranking of 5 Candidate Sites -Short Listing of 5 sites to identify Preferred Site and Alternative Preferred Site Develop NPS Siting Guidelines -Nuclear Power Station (NPS) Size & Land Requirement -Mandatory / Rejection Criteria -Assessment Parameters -Weighting Factors -Identify Potential & Candidates Sites -Peer Review by KEPCO & IAEA Requires Evaluation Criteria & Procedures from Authority COMPLETED IN JULY 2011 Desktop Study (COMPLETED SEPT 09) 28

29 Factors to consider in Site Selection Earthquake Zones in South East Asia Site Selection Weighting Factors Stable Sunda Tectonic Plate Public Safety & Health (50%) Radiation exposure, Population, Extreme natural events, Hazardous installations Environment (20%) Ecology, Water quality Socio-economic (15%) Coastal resources, Land Use, Archaeology Engineering Costs (15%) Foundation, Accessibility, Proximity to grid, Cooling water *Petersen et al, Probabilistic seismic hazard analysis for Sumatra, Indonesia and across the Southern Malaysian Peninsula, Tectonophysics, Volume 390, Issues 1-4, October 2004, Pages *Weighting factor sourced from UM study 29

30 Project Regulatory & Programme MNPC has appointed a Legal & Regulatory Consultant in Jun 2011

31 Programme & Regulatory Development Project Development COD: October Preparation Phase Decision Phase Implementation Phase Launch Pre-Feasibility Study (PFS) Feasibility Study (PFS) Basic & Detailed Design Bid Invitation & Evaluation Contract Award & Vendor Procurement Site Grading & Excavation Construction Commissioning Regulatory Framework Preparation Site & Construction Licenses & Preliminary Safety Analysis Operation License & Safety Reports Signing/Ratifying or Acceding to International Instruments & Legislative Development NPIDP, Site Investigations Preliminary Safety Analysis Report (PSAR) Construction License Site License Pre-Operational Baseline Radiological Data Gathering Final Safety Analysis Report (PSAR) for Operating License Operator Training Continuous Stakeholder Involvement, Public Information, Human Capital, Industrial & Technological Development KeTTHA to decide when to start PI/PA activities Source: MNA, Workshop on Plan of Action of National Nuclear Policy, Nov. 2010

32 o Nuclear Power Infrastructure Development Plan (NPIDP) will be prepared first to assess Malaysia s STATE of READINESS and take appropriate actions to be NUCLEAR READY. Status & Progress will be regularly reviewed together with the IAEA. o Site Evaluation will QUALIFY that it is SAFE to build NPP on one of three (3) candidates NPP Sites in Peninsular Malaysia after at least eighteen (18) months of on-site analysis and then initiate NPP Site License application. o Feasibility Study will be carried out on the final selected NPP site including LESSONS LEARNED from Fukushima as well as the Reactor Technology options (PWR, BWR or PHWR). o Finally, the Bid Document will be the basis to invite potential turnkey NPP vendors to bid if a NATIONAL decision is taken to proceed with the 1 st NPP project or GO NUCLEAR in 2014/15.

33 NPIDP will assess our STATE-of- READINESS, as per IAEA 19 key infrastructure issues during Phase 1 to Phase 3 of Nuclear Power Development, as we progress to achieve 3 well-defined Milestones ( timeframe):- MILESTONE 1 (end-2014) Ready to make a Knowledgeable Commitment to a nuclear programme MILESTONE 2 (Q1 2015) Ready to invite bids for the first NPP Project MILESTONE 3 (end-2025) Ready to Commission and Operate the First NPP Source: IAEA NG-T-3.2 Evaluation of status of national nuclear infrastructure development, 2008

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35 Prime Minister s Statement on SMRs 35

36 Prime Minister s Statement on SMRs 36

37 Malaysia s Tentative Requirement PWR, BWR, PHWR 1000 MWe Passive safety systems Proven technology Technology transfer Barter trade Uranium now, thorium for future 37

38 o Radiation & nuclear Research Reactor are NOT new to Malaysia. o Malaysia aspires to become a high-income and developed nation and Peninsular Malaysia needs NUCLEAR electricity, post o Deploying Nuclear Energy for Power Generation is one of Entry Point Projects in ETP report, launched by Prime Minister of Malaysia on 25 Oct o MNPC will plan, spearhead and coordinate the implementation of nuclear energy development programme for Malaysia and take the necessary action(s) to realize development of the FIRST nuclear power plant in Malaysia (target COD in 2025+). o Together with relevant Stakeholders, MNPC strives to ensure that Peninsular Malaysia will be NUCLEAR READY in 2014/15 awaits a well-informed NATIONAL decision to GO NUCLEAR then.

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