Electricity demand and supply in Peninsular Malaysia: Energy efficiency, renewable energy, or nuclear? (Part 4)
This is Ir. G. Lalchand’s fourth article in his series of Malaysia’s energy challenges.
The previous part of this series showed that Malaysia may not need to add any nuclear (or other fossil-fuelled) power generation plant until after 2025 provided that the RE (renewable energy) development (even when moderated) and adoption of EE (energy efficiency) initiatives (even on a conservative basis) are pursued diligently in conjunction with the currently declared power plant capacity additions as reported by the Energy Commission (a total of about 7,300 MW of Coal and gas fired combined cycle plant).
Also as stated, this would be subject to the potential retirement of existing fossil-fuelled power plants, whether operated by IPPs (independent power producers) or TNB (Tenaga Nasional Berhad) itself. The potential retirement of existing power plants could naturally warrant an earlier planting up of the new proposed power plants. However, this topic needs to be considered from a wider perspective and it is addressed later in this episode.
Obviously, these projections also depend on the actual pace of adoption of EE practices and the rate of development of RE power generation under the RE Act and its FiT (feed-in tariffs) mechanism. SEDA (Sustainable Energy Development Authority) commenced the promotion of the “development of RE in Malaysia with a bang” with effect from 1st December 2011 under the provisions of the RE Act and its related FiT mechanism.
The development of PV (photovoltaic) Farms (PV power plants – PVPPs) later generated some negative repercussions in the local press. This “fiasco” and the uncertainty of biomass feedstock supply for RE power plants may create some “hiccups” as to the rate of overall RE capacity growth, not just for PV, during the rest of this decade. Therefore, the actual RE capacity may not match that planned under the RE Act.
This issue warrants some “caution” regarding energy generation from PV power generating systems. In fact, there appear to be serious misconceptions (and even apparently deliberate mis-representation) on the role that PV power generation can play for the nation’s future power needs and energy security, as elaborated below.
Conventional power generation meets customer demand that requires generation of about 6,000 kWh per annum for every kW of consumer demand. RE from biomass, biogas, mini-hydro and solid waste to energy power plants can generate roughly this amount of energy per unit of power capacity involved and as shown below. The yield from PV is sadly much lower, being only about 25% of that from the other RE sources as shown in KeTTHA’s (Ministry of Energy, Green Technology and Water) own presentation on RE Act & Subsidiary Legislation (on 21 April 2011) as below.
Data from the above presentation equates to energy yield as in the table below.
This shows that the PV generated electricity can only contribute about 25% of the energy that can be generated by the other RE technologies and as required by the consumers. Thus, additional fossil-fuelled power plants will be needed to satisfy the total consumers’ power and energy demand.
Even with, say, 15,000 MW of PV system capacity against the 15,000 MW of power demand, the fossil fuelled (or other) power plants will be needed to meet the energy and net power demand shortfall (of the order of 70%), which could amount to about 10,500 MW as shown in the hypothetical demand profile chart below.
Regarding EE, there is yet no legislation to mandate the adoption of EE&C (Energy Efficiency and Conservation) initiatives nor is there any dedicated agency to implement EE&C initiatives, although it is understood that KeTTHA is actively pursuing this initiative.
A previous segment (Part 2) mentioned a demand reduction potential of about 826 MW, by 2020 (which with a reserve margin of 25% equates to a reduction in the need of generating capacity by about 1,030 MW) could thus save over RM 3.0 billion in capital investment.
Electricity consumers would normally be happy to help national EE objectives if by doing so they can also save their own electricity costs. To this end, several credible and easy to implement EE initiatives that consumers can adopt were detailed in the last segment. Those examples showed that electricity consumers could derive cost savings for themselves by adopting EE initiatives for their own benefits and in the process contribute to helping to achieve the national energy savings and carbon reductions promised by our Prime Minister at the COP (Conference of Parties) 15 in Copenhagen in December 2009.
In addition to the savings from the adoption of EE consumer appliances mentioned, there is the potential of energy and demand savings from the larger industrial and commercial consumers, who actually consume almost 80% of electricity used in Peninsular Malaysia, almost 70% in Sabah and over 75% in Sarawak.
Most commercial and some industrial users have significant A/C cooling loads, using window or split-units as well as large centralised chillers and extensive lighting loads. Changing of split-unit A/C for these consumers has been included under the earlier A/C component.
Experience from some energy audits for commercial consumers show their A/C energy use share being between 50% and 60% and lighting energy use share being up to 30%. The share of A/C and lighting energy use for industries is not as well known but, on a conservative basis, may be of the order of about 10% of their total consumption for each component.
Centralised chiller-type A/C plants normally operate for 20 years or more. Hence, their operating efficiency may be compromised if they have not been adequately maintained. Moreover, technology improvement over the years makes new centralised chillers far more efficient than older plant.
That chiller efficiencies improved may warrant their replacement on purely economic grounds in view of the current electricity tariffs and their anticipated increase in line with the government’s declaration to remove fuel subsidies gradually. This is more so since such consumers can avail tax benefits (ITA – Investment Tax Allowance) that the government has provided for the adoption of EE initiatives by companies. Replacing every “refrigeration-ton” of centralised chiller plant with newer more efficient plant can provide energy cost savings of the order of RM 300 per annum (based on average operation for about 10 hours a day) for typical users such as offices, shopping malls, hospitals and the like.
So, how much additional electricity demand savings are possible if these consumers change their older chillers? The Energy Commission Statistics for 2010 show industrial and commercial use to be 29,872 GWh (1 GWh equals 1 billion kWh) and 40,071 GWh respectively.
The extracts from the BSEEP (Building Sector Energy Efficiency Project) below show the BEI (Building Energy Intensity) for EE buildings in Malaysia as well as the ways in which energy savings can be achieved. These demonstrate the tremendous energy saving potential through design of EE buildings and the EE features that can be employed.
Thus, a very conservative energy saving estimate of only 10% for the cooling load equates to about 1,494 GWh saving for commercial users and 400 GWh savings for industrial consumers, making a total saving of about 1,894 GWh per annum. This energy saving would imply a demand saving of about 309 MW, which would imply avoiding the need for power generation capacity of about 380 MW. (Note: actual savings from replacing old chillers with state-of-the-art EE chillers can be as much as 25%, without sacrificing the cooling capability required).
Similarly, energy efficient lighting for commercial and industrial users would provide additional savings. Using conservative shares of energy used (20% for commercial and 10% for industrial users) and conservative prospective savings to be achieved (only 20% compared with known savings of about 30% for T-5 fluorescent tubes against the current standard T-8 tubes, and up to 50% with LEDs but at a much higher cost), the savings from changing existing lighting to the more efficient alternatives can be about 1,996 GWh a year. This energy saving would equate to a demand saving of about 326 MW, which would imply a reduction in power generation capacity required of about 407 MW.
The total potential energy savings from using EE lighting and replacing existing older centralised chillers with new more units that are efficient can be as much as 3,890 GWh that would equate to a demand reduction of 635 MW. Allowing for a 25% reserve margin, this would equate to a reduction in required power generating capacity of 787 MW.
Thus, the total demand reduction from the various initiatives (including from those listed in Part 3) would be as follows:
The total savings from these initiatives will experience some “diversity” between their demands, so the actual demand reduction will be less than the arithmetic sum shown above.
The impact of diversity may moderate the demand reduction to between 70% and 80% of the arithmetic sum. A conservative assessment at 70% makes the potential saving between about 917 MW and 1,230 MW. Allowing for the nominal 25% reserve margin for the generating capacity would mean that the generating capacity required to meet such a load could be reduced by between about 1,146 MW and 1,538 MW.
These considerations show that the projected demand savings from energy efficiency (about 826 MW by 2020) are not exaggerated and can be realistically achieved, and in fact exceeded. These savings should therefore be duly incorporated in any long-term generation capacity planning exercise to ensure economically optimised system development to meet national electrical energy needs.
However, there is no evidence to indicate that such considerations, as well as the projected RE generating capacity development, have been taken into account in the system development as presented by KeTTHA at the National Energy Security Forum in February 2012.
The slide below shows the electric power demand and supply projection for Peninsular Malaysia up to 2031 as shown at the National Energy Security Conference 2012 (on 28 Feb. 2012) by KeTTHA.
This presentation shows the demand projection and generating plant development planned to achieve an appropriate “Reserve Margin (%)” of below 20% from the current excessive margin of the order of 40%. Sadly, it fails to show any contributions from EE (3,600 MW less generating capacity needed as stated by the Minister himself) or RE generating capacity (projected to be between 2,080 and 3,200 MW) as have been announced repeatedly in the past.
Even more critically, the KeTTHA presentation projects the development of 5,000 MW of NPP (nuclear power plants) by 2030, in spite of the “disaster” at the Fukushima plant in March 2011, and when the Malaysian public has apparently shown severe resistance to the development of NPPs in Malaysia.
Does Malaysia need 5,000 MW of NPP as projected by KeTTHA, or even the 2,000 MW as planned by PEMANDU (Performance Management Delivery Unit), with the first 1,000 MW units to be commissioned by 2021 under EPP 11 (Entry Point Project 11) of the ETP (Economic Tranformation Programme)?
Part 2 in this series attempted to demonstrate the power demand and generation capacities that will be in operation during the critical period in question. The relevant data is tabulated below for easy reference.
This table shows that the NPP capacity would not be needed until at least 2025. However, even this likelihood is debatable in the light of the potential impact of EE and RE on the generation capacity needs as presented above. These arguments against the plans for “excessive generation capacity (particularly NPP)” are further elaborated as below.
Licenses for a total of about 4,100 MW of IPP generating capacity comprising combined cycle and open cycle gas fired power plants are due to expire between 2015 and 2020. However, the Energy Commission is negotiating for the extension of these licenses for between 5 and 10 years. The power plants in question are capable of operating satisfactorily during the proposed extension period.
Besides the extension of their operating licenses, these power plants can be judicially “re-powered” with new power generating units at the current sites where the gas supply may still be available beyond the present license periods.
The combined-cycle (CC) plant that are to be retired have an average operating efficiency of about 40% to 45%, while the units being manufactured now claim a design efficiency of the order of 60%. The new CC plant may thus be able to operate at an average efficiency of about 50% to 55%, which is about 20% higher than the existing plant.
This means that new CC power plants can generate up to 20% higher output than the plants they replace from the same amount of gas supply. In addition, the existing open cycle gas turbines (OCGT) plants could be converted to CC mode, which would increase their output by about 50% compared with OC operating mode.
In addition, there appears to be no serious restriction on the quantity of gas that can become available in the future, even if it is obtained through the import of LNG (liquefied natural gas) which would need to be re-gasified (but at a higher “market price”). In fact, the first such facility, owned & operated by PETRONAS, is expected to be in operation before the end of 2012.
Thus, the judicious re-powering at the sites of the IPP plants that are to have their licenses extended before being decommissioned can provide about 800 MW to over 1,000 MW additional generating capacity through a potential re-powering exercise. This additional capacity could be realised between 2020 and 2025, to make up the potential generating capacity shortfall indicated for 2025.
Moreover, even the long-term LNG exports from Malaysia to other “East Asian” countries that were contracted in the last century are expected to expire before 2020. The capacity that has been exported so far can thus be made available for local use to power combined cycle power plants, which are considered relatively “clean” rather than to develop NPPs.
Obviously, the prospects for enhanced adoption of EE, especially for the period beyond 2020 can help to realise greater demand reduction and consequent need for additional power generating capacity, whether from gas, coal or, especially nuclear.
It must be remembered that a 1,000 MW NPP is expected to require an investment of about RM 10 billion, while a corresponding generation capacity reduction through EE can be achieved at much lower cost, probably below 20% of the cost of the NPP. This alternative would also obviate the need for operating expenses to run the NPP over its lifetime, besides obviating negative public sentiments of any potential hazards, whether perceived or otherwise.
Additionally, the impact of EE and distributed generation from RE can also reduce the need for electricity supply transmission and distribution system reinforcement, thus reducing further capital investment by the utility (TNB in Peninsular Malaysia) operating the service.
The lower the capital investment in the supply system infrastructure, the lower will be the need for higher “revenue return (profits)” for the energy supply utility. This will automatically translate to a lower need for tariff escalation in the future, thus reducing the burden of higher energy costs for the consumers.
Successful promotion of EE and its adoption by the consumers can even mitigate, to a certain extent, the government’s gradual removal of subsidies for gas supply for power generation.
So do we need nuclear power plants in Malaysia as early as 2021 or 2022?
I suggest that Malaysia can safely defer the development of NPP in Malaysia to a commissioning date beyond 2025, with the hope that more benign, “green and clean” forms of power generation can become available for Malaysia in the future. These could even be from nuclear power but based on thorium.
I reiterate that I am not anti-nuclear, but I would prefer that the nuclear option be retained as a “choice of last resort”.