ENERGY POLICY SHIFT AND KEY ENERGY PROJECTS TOWARDS SUSTAINABLE ENERGY FUTURE FOR MALAYSIA 3 RD ENERGY FORUM 12 TH JULY 2011 DR. KAMARIAH NORUDDIN DIRECTOR, ENERGY SECTION ECONOMIC PLANNING UNIT, PM s DEPARTMENT 1
Outline of Address Policy Directions Energy Policy Shifts Key Energy Projects Way Forward 2
Outline of Address Policy Directions Energy Policy Shifts Key Energy Projects Way Forward 3
Major Initiatives Of National Transformation Towards a High Income Economy National Key Result Areas (NKRAs) 1. Crime 2. Education 3. Corruption 4. Low Income Households 5. Urban Public Transport 6. Rural Basic Infrastructure PEMANDU Strategic reform initiatives (SRIs)-Part 1 1. Re-energizing the private sector 2. Developing a quality workforce 3. Creating a competitive domestic economy 4. Strengthening the public sector 5. Transparent and market friendly affirmative action 6. Building the knowledge base and infrastructure 7. Enhancing the sources of growth 8. Ensuring sustainability of growth Strategic reform initiatives (SRIs)- Concluding Part 1. Government s Role in Business 2. Public Finance Reform 3. Human Capital Development 4. International Standards & Liberalisation 5. Public Service Delivery 6. Narrowing Disparities/ Bumiputera SMEs NEAC 1. Creating the environment for unleashing economic growth (including NKEAs) 2. Moving towards inclusive socio-economic development 3. Developing and retaining a first-world talent base 4. Building an environment that enhances quality of life 5. Transforming government to transform Malaysia 10MP Strategic Thrusts NEAC 4
CHAPTER 2: BUILDING ON STRENGTHS OF THE PAST Macroeconomic Strategies: GDP growth to be driven by private investment Share to GDP by contribution 6% p.a. RM740.3 bn RM552.1 bn 13.4% 53.6% 58.0% 12.6% 13.9% 10.2% 11.2% 11.8% 116.0% 109.9% -99.1% 2010-111.6% 2015 Growth (%) per annum, 2011-2015 Private Consumption Public Consumption Private Investment Public Investment Exports Imports SOURCE: Economic Planning Unit GDP growth Private Investment 9 th MP ~ RM 71.2 billion per annum 10 th MP ~ RM 115.3 billion per annum 7.7 4.8 12.8 5.0 7.2 8.6 Overall 6.0 The challenge: to move from an economy that competes on low cost and natural resources, to one driven by productivity and innovation 7 Core Strategies to economic reform 1 2 3 4 5 6 7 Creating a private sector-led economy Supporting innovationled growth Rationalising the role of government in business Developing SMEs as an engine of growth and innovation Competing globally Putting in place the infrastructure for growth Focusing on key engines of growth Modernise business regulation and liberalise the services sector Remove market distortions by rationalising subsidies Introduce Competition Law to govern all firms and improve interface between government and business 5
New Approaches in Development Planning 2-year Rolling Plan Tabled in Mid 2010 Value Management Logical Framework & Project Cycle Management 1 st Rolling Plan 2011-2012 6 months earlier from plan cycle Project planning and implementation Complement the rolling plan concept 6
+ Development of the 10MP Implementation Plan & Templates Identify 85 initiatives in 10MP Prioritise initiatives Categories initiatives Develop implementation plan Summarise all initiatives in 10MP by chapter Prioritise initiatives based on: Criticality of initiative to the nation's development Complexity of the implementation of initiative Initiatives prioritised and bucketed into 3 categories Lead ministry/agency required to complete templates and submit to EPU Input from relevant ministries / agencies to be incorporated into implementation plan 2 Illustrative For discussion only Backup Implementation plan Talent Corporation (I) Capture existing projects and detail areas not covered by existing plans SAMPLE Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 24 initiatives 14 initiatives 10 initiatives 23 initiatives 14 initiatives Prioritisation of initiatives by chapter 5 4 3 2 1 1 Alignment with lead ministry/ agency 3 Templates for lead ministry/agency to fill 2 2 11 10 8 5 18 17 13 12 16 15 14 + 3 2 23 7 21 9 19 3 Completed by project team 1 4 22 4 20 1 6 24 5 EPU-supported: 11 initiatives Centrallyguided: 32 initiatives Ministry-led: 42 initiatives Milestone Define roles and responsibilities of the Talent Corporation Define organization structure and key positions Captured in existing plans Owner Prime Minister's Department Prime Minister's Department Plan owners 275442-01-Presentation to NPDC 10Aug2010-JL-Draft-v4-RR.ppt 1. Set initiative milestones Target date Dec 2010 Feb 2011 Action plan Define the mission, vision and strategic goals of the Talent Corporation Define the specific role of the Talent Corporation in public sector enablement and private sector development support Design the organization structure and define the role mandates and KPIs for key positions PMO PMO Expected outcomes Operating model of the Talent Corporation defined 2. Highlight responsible owner Organization structure, key positions, and KPIs defined 3. Agree on target deadlines 10 5. Determine target outcomes 4. Develop detailed action plans 7 7
Economic Performance 10 th Malaysia Plan Target Q1 2011 Status Target for 2011 GDP Growth : 5.0 6.0 % 4.6% GNI per capita : RM 28,175 (US 9,204) Private Investment : RM87 billion RM27,780 (US$9,101) RM 28 billion Current Account (BOP) : 12.5% of GNI 15.3% Inflation (CPI) : 2.5% - 3.5% 2.8% Unemployment Rate : 3.2% 3.1% Source : Economic Planning Unit 8
Outline of Presentation Policy Direction Energy Policy Shifts Key Energy Projects Way Forward 9
Energy Demand-Supply Balance Energy Increasing Energy Demand EE Initiatives Net Exporter Demand-Supply Gap Net Importer New Energy Sources Declining Energy Reserves 2019 2025 Year Energy demand is projected to increase from 2,000 PJ in 2009 to 4,013 PJ in 2030 Average rate of 3.6% p.a.
The New Energy Policy addresses economic efficiency, security of supply & social and environmental objectives FIVE PILLARS Energy Pricing Energy Supply Energy Efficiency Governance Change Management 11
12 Similar Initiative 10MP & New Economic Model Gas Price Revision Initiative 3 under the 10 th MP Removing Market Distortions by Rationalising Subsidies
Energy Pricing Revision of gas prices for power and non-power sectors effective 1 June 2011 Resource Allocation Increase in gas price by RM3/MMBtu every 6 months Energy Efficiency Renewable Energy Effectively gas price on average is still subsidised by almost 70% Environment Entrance of New Players Market price by 2016 13
Energy Pricing Decoupling Approach for Market Pricing Itemising subsidy in consumers bill Educate consumers De-link subsidy from energy use End goal is to remove subsidy 14
Governance Restricted tender for new power plants in brown fields Establishment of MyPower Liberalisation of gas supply Enhancing roles and functions of regulators 15
Change Management Policy as a strategic package Phased implementation of change 16
Energy Efficiency SAVE programme - rebate for selected energy efficient electrical appliances Formulation of Energy Efficiency Masterplan Energy Labeling and Minimum Energy Performance Standards (MEPS) Green Building Index (GBI) 17
Outline of Presentation Policy Direction Energy Policy Shifts Key Energy Projects Way Forward 18
Supply Side Initiatives : Oil & Gas Development LNG Regasification Terminals Regasification Terminal in Malacca to operate by August 2012 Regasification Terminal in Lahad Datu to operate by 2015 Tanjung Pengerang, Johor to operate by 2016 Refinery and Petrochemical Development RAPID to operate by 2016 19
Supply Side Initiatives : Generation Capacity Gas Plants 300MW Kimanis Power Plant to be commissioned by 2013 100MW SPR Power Plant (Kimanis) to be commissioned by 2013 300 MW Lahat Datu to be commissioned by 2016 Coal Plants Ultra Super Critical Technology 1000MW Janamanjung to be commissioned by 2015 1000MW Coal Plant to be commissioned by 2016 Hydro Plants Bakun 2400MW [to be commissioned by August 2011 for 300MW] Ulu Terengganu 250MW to be commissioned by 2016 Ulu Jelai 372 MW to be commissioned by 2017 20
Supply Side Initiatives : Electricity Coverage Transmission & Distribution Peninsular Malaysia network expansion (allocation of RM4-5 billion annually by TNB) Sabah Transmission line expanded by 93km in 2012 To maintain the System Average Interruption Duration Index (SAIDI) in Sabah at 700 minutes/customer- RM200 mil. allocated for 2011 Rural Electrification Projects 66,000 rural homes will have access to electricity by 2012 Electricity coverage by 2012 :- Peninsular 99.9 % Sabah & Sarawak 95 % 21
Supply Side Initiatives : Renewable Energy Renewable Energy Biomass, biogas, mini hydro, solar and solid waste Target of RE in the Energy Mix 985MW or 5.5% of generation mix by 2015 RE Act 2011 passed in April 2011 Sustainable Energy Development Authority (SEDA) to be established by September 2011 Feed-in-Tariff (FiT) 1% of consumers monthly bill beginning September 2011 22
Other Initiatives : Renewable Energy B5 Programme (Blended bio-fuel 5%) Government Agencies used B5 since February 2009 B5 Programme to be implemented in Central Region of Peninsular Malaysia by 1 st November 2011 Green Technology Financing Scheme (GTFS) RM 1.5 billion incentive for 10 MP Clean Development Mechanism Projects include biomass, biogas and landfill projects Certified Emission Reduction issued to 10 companies totaling to 1,231,655 tonne of CO 2 equivalent 23
Outline of Presentation Policy Direction under 10th Malaysia Plan The New Energy Policy Key Energy Projects Way Forward 24
Vision for the Future Efficient use of energy Diversified & responsive energy supply Efficient resource allocation High value economic development 25
THANK YOU 26