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Energy trilemma — ongoing challenge for power supply industry

Energy trilemma — ongoing challenge for power supply industry

14 Jun 2021

The energy trilemma, which is a challenge to balance environmental sustainability, energy security and energy equity, has been the ongoing challenge for the electricity supply industry, as moves to implement renewable energy (RE) should take those aspects into consideration.

Energy Commission CEO Abdul Razib Dawood (picture) said in 2020, Malaysia was ranked 33rd out of 108 nations in the World Energy Trilemma Index 2020 by World Energy Council.

“In managing the energy trilemma under the long-term supply outlook, the government has set several policies and planning criteria.

“(Following which) the planning of power generation took into consideration this trilemma through the implementation and adoption of the government’s policies and planning criteria,” he said during a media briefing on the Peninsular Malaysia Generation Development Plan 2020 (2021 to 2030).

However, the Covid-19 pandemic has also provided an additional challenge to the planning for the electricity supply industry as it has impacted the overall demand growth.

According to the Generation Development Plan 2020, net demand is projected to grow by 0.6% per annum for 2021 to 2030 and 1.8% per annum for 2031 to 2039.

By 2030, 6,077 megawatt (MW) of new capacity is required to meet demand growth, with the reserve margin projected to reach below 25% by 2039.

Abdul Razib said this new capacity will be generated through competitive bidding in order to achieve optimum cost which will translate to a more affordable tariff rate to consumers.

“The new capacity requirement is projected to increase post-2030 to 9,924MW with an additional 500MW of battery energy storage system for the 2031 to 2039 period, while reserve margin is expected to reduce further to 21% by 2039,” he said.

In support to Malaysia’s commitment towards a sustainable energy pathway, supply capacity mix in Peninsular Malaysia will see an increase in RE share from 17% to 31%, while the thermal capacity share will reduce from 82% to 69% by the end of the horizon.

“As a result, carbon emission intensity per GDP for Peninsular Malaysia’s power sector is projected to be on the downward trend with a 45% reduction by 2030 compared to 2005 level, in line with Malaysia’s commitment in COP21 (21st Conference of the Parties), and a further 65% reduction by 2039,” he said.

He added that in the interest of achieving the 30% solar penetration target by 2039, the government has taken into consideration the energy trilemma and its impact on the consumers.

“The government has tasked the Grid System Operator to conduct a study to assess the solar penetration limits and possible impacts on the grid stability due to excessive supply of solar energy, in terms of infrastructure and associated costs.

“The government will then analyse the findings from the study in the interest of cushioning the associated costs that may be borne by consumers and decide further in accordance with recommendations made,” Abdul Razib said.

Finally, in order to strike the right balance in the energy trilemma, the annual system cost is estimated to be in the range between RM28.79 billion in 2021 to RM41.96 billion in 2030, and RM52.53 billion by 2039.

Abdul Razib noted that these figures are based on the optimal generation expansion plan along with the least cost dispatch simulation.

“While addressing the energy sustainability and security pillars, the other key priority is in ensuring the public has access to affordable energy. The focus is to ensure that a reasonable tariff is charged to the consumers,” he said.

Source: The Malaysian Reserve