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Energising the region with hydropower

Energising the region with hydropower

21 Sep 2021

According to a report by management consulting firm McKinsey, the world’s global power consumption is set to double by 2050. As electrification rates increase in tandem with new developments and a growing population, the need for power will grow exponentially in the decades ahead. 

But meeting the increasing energy demand is more than just providing additional power. How we produce and consume energy will also shape the future of our planet. Now more than ever, there is an important call to reduce our carbon impact in order to mitigate climate change.

With this new green vision, the world is looking towards sustainable, renewable energy to fulfil its needs, and Sarawak Energy is in a prime position to meet this need at the regional level with hydropower.

Sarawak’s hydropower journey began with the commissioning of the Batang Ai Hydroelectric Powerplant (HEP) in 1985.

Today, the state has an installed capacity of 3,452mw of renewable energy from its large hydropower plants, compared with Malaysia’s total large hydro generation capacity of 5,684mw. This is from the Batang Ai HEP (108mw), Bakun HEP (2,400mw) and Murum HEP (944mw), all of which are operated by Sarawak Energy.

The dominance of renewable energy from large hydropower in its generation mix enables Sarawak to become a key contributor to Malaysia’s targets for the Paris Agreement by helping the country meet its Nationally Determined Contributions to reduce carbon emissions, following the federal government’s recognition of large hydropower as renewable in 2021. Malaysia previously included only run-of-river or smaller hydropower plants of less than 5mw in its COP21 commitments.

Its renewable energy generation capacity will increase by 1,285mw when the Baleh ­Hydroelectric Project comes on stream. Targeted for completion in 2026, the project is being developed in accordance with the International Hydropower Association (IHA) Sustainability Assessment Protocol. This will eventually be counted in Malaysia’s renewable energy target of 31% of renewable capacity by 2025 and the ramp-up to 40% by 2035.

The benefits of hydropower and the electricity Sarawak Energy’s power plants are producing have benefits that stretch beyond just powering households and businesses. 

The electricity produced has the lowest average unsubsidised tariff in Malaysia and among the most competitive tariffs in the region. The plants have also helped decarbonise the Sarawak power system by as much as 68% from 2011 to 2019. 

The hydropower plants offer flood-­mitigating capacities, holding back the inflow of floodwaters during the wet season, releasing it downstream in a well-regulated and controlled manner. 

At the inaugural Sustainability and Renewable Energy Forum or SAREF in 2019, Sarawak Energy launched its first Renewable Energy Certificate, allowing the corporate purchase of renewable energy generated in Sarawak. Each certificate represents the environmental benefits of 1mwh of renewable energy generated in the state and allows corporations to offset carbon emissions while participating in a more sustainable energy future.

Most importantly, hydropower is not just meeting the state and the region’s need for a sustainable energy future but is also helping Sarawak achieve its developed status by 2030, by transforming Sarawak Energy into the renewable energy powerhouse of Southeast Asia.

By harnessing the abundant hydro potential of the state’s vast network of rivers, the company’s development strategy is in line with the United Nations Sustainable Development Goal of Affordable and Clean Energy for all. 

Century of experience 

In its mission to light up homes and businesses in communities across the state over the past century, Sarawak Energy has grown and evolved, transforming itself from a traditional utility into a modern, vertically integrated energy developer and power provider. It is a remarkable achievement for a company that began as a small unit in the Public Works Department in 1921.

However, while joining the century club is a big achievement, Sarawak Energy is marking its milestone quietly this year due to the Covid-19 pandemic. The management cancelled plans for a gala celebration and channelled the allocation towards the less fortunate through Sarawak’s Disaster Fund as a gesture of respect for the millions affected by the pandemic. 

Despite Covid-19 affecting its operations and customers, the company is still focused on its goals. Today, it provides affordable, reliable and predominantly renewable electricity for Sarawak’s population of almost three million, 45% of whom are rural residents. 

Working with Sarawak’s Ministry of Utilities, it is delivering the state government’s ambition for full electrification by 2025. The corporation is focused on the final few percentage points of rural households that need to be connected to electricity supply, from a low of 56% rural electrification in 2009.

The jump in rural electrification was boosted in 2019 with a RM2.37 billion injection by the Sarawak government to extend grid connections as well as providing off-grid solutions for the remote highland, riverine or coastal communities. Sarawak Energy also continues to fulfil its supply commitments reached with pioneer investors in the Sarawak Corridor of Renewable Energy (SCORE), the first crop of Borneo’s bulk power customers that now serve as the model for future hydro-industrialisation initiatives.

To ensure it is able to meet the growing demand for electricity, the company continues to invest in developing hydropower with the project in Baleh, a tributary of the Rajang, Malaysia’s longest river, which is next to come on stream. 

Upon commencing operations, the plant’s additional 1,285mw capacity will complement the present installed capacity of 5,204mw generated by its hydro and thermal plants throughout Sarawak. 

Beyond energy provision

Sarawak Energy, the largest renewable energy developer in the country, has been open about its regional ambitions, including its intention to spearhead the Borneo Grid. This began with a power exchange agreement with Indonesian national utility Perusahaan Listrik Negara, under which power was first exported to residents of West Kalimantan, Indonesia, in 2016.

Sarawak Energy’s continued development of hydroelectric projects has positioned the state as a potential central provider of power in the proposed expansion of the Asean Power Grid, which is an initiative by the Association of Southeast Asian Nations to strengthen the electricity infrastructure in the region. 

The Northern Grid Extension, connecting areas north of Miri to the State Power Grid while accelerating rural electrification in those areas, also supports power exports to the state’s northern neighbours.

Scheduled for completion in 2024, the project will extend the transmission grid across the length of the state while also catering for injection points for power export to Sabah and Brunei. In August, Sabah Electricity Sdn Bhd and Syarikat SESCO Bhd, a subsidiary of Sarawak Energy, inked a power exchange agreement and an interconnection agreement to pave the way for an initial export of 30mw for a 15-year term. 

The agreement marks a milestone in the journey towards the materialisation of the Borneo Grid and the wider Asean Power Grid, building upon Sarawak’s first power export to West Kalimantan. 

As the world progresses towards building a more sustainable energy future, Sarawak Energy aims to be a leader at the national and regional level through its role as a renewable hydropower developer and sustainability champion.

It achieved a major national milestone when it became the first corporation in Malaysia to commit to the Business Ambition for 1.5°C under the United Nations Global Compact.

By signing the pledge, Sarawak Energy has committed to setting a science-based emission reduction target across relevant scopes, in line with the Paris Agreement to pursue efforts to limit the global temperature increase to 1.5°C above pre-industrial levels by 2030 and work towards net-zero carbon emissions by 2050.

Since 2010, the company has been a sustainable member of IHA, the world’s most extensive and active hydropower network created under the auspices of the United Nations Educational, Scientific and Cultural Organisation (Unesco) in 1995 as the voice of sustainable hydropower. Members of the IHA are active in more than 100 countries and include organisations engaged as hydropower owners and operators, developers, designers, suppliers and consultants.

Sarawak Energy’s group CEO Datu Haji Sharbini Suhaili was recently re-elected to the board of IHA, representing Asia, East and Pacific, on a two-year mandate beginning October 2021 to guide IHA’s work and priorities in clean energy transition.

Recently, a report released by IHA researchers identified that in order to achieve net-zero emissions and limit global warming to 1.5°C, there is a gap of 600gw or 600,000mw to be filled by hydropower.

Renewable energy remains a significant pillar for Sarawak Energy and, as such, it is presently engaged with energy leaders to explore more sustainable options. In recent months, IHA has been seeking public feedback on a new manifesto for hydropower development to be announced at the World Hydropower Congress 2021 (WHC 2021), called the San Jose Declaration on Sustainable Hydropower. 

In November 2020, the company signed a memorandum of understanding with ­Petronas to collaborate on green hydrogen commercial production, marking another milestone for Sarawak in venturing into energy export with hydrogen as an energy carrier. It also has the potential of positioning the state as a key hub for the hydrogen value chain.

This builds on Sarawak’s bold venture into a hydrogen economy when Sarawak Energy built Southeast Asia’s first integrated hydrogen production plant and refuelling station in Kuching to serve one of the region’s first hydrogen fleets.

An agreement to collaborate with Pestech inked in July will also explore clean alternative energy solutions. This is focused on replacing diesel generators or other chemical-based energy storage solutions with cleaner and more sustainable energy resources to power microgrids in remote areas.

More than just an energy provider, Sarawak Energy remains an important cornerstone of the state of Sarawak, powering the state with electricity, and driving its continued development as well as its economy. The company’s workforce of 5,400 is building on the strong foundation of the last 100 years and ensuring that its vision for reliable, renewable and affordable energy for the region is realised in the near future.      

Source: The Edge Markets