The Energy Regulation and Markets Review - Stikeman Elliott

Malaysia
network, which is wholly owned, controlled and operated by TNB, except in certain
privatised or franchise areas. The other is the Sabah network, which is owned, controlled
and operated by the SESB and the third is the Sarawak network, owned, controlled
and operated by SESCO. As a result, Malaysia has three grid codes: the Malaysian Grid
Code, the Labuan and Sabah Grid Codes, and the Sarawak Grid Code. In addition, there
is a Malaysian Distribution Code.
IV
ENERGY MARKETS
i Development of energy markets
There is no wholesale electricity market in Malaysia. It has only liberalised certain parts
of the generation market and even then the supply of electricity from TNB, SESB and
SESCO forms the main portion of the supply chain. Each generation company enters
into a power purchase agreement expressly stipulating the manner of supply of electricity
to the grid. The grid system operator determines the order of priority for despatch of the
plant.
ii Energy market rules and regulation
There have been no new market rules and regulations for the past year except for the new
laws and regulations on renewable energy, which will be discussed in Section V, infra.
iii Contracts for sale of energy
Three major power purchase agreements were executed or awarded in the past year,
the largest being the purchase of electricity by Sarawak Energy Berhad from Sarawak
Hidro Sdn Bhd’s Bakun hydroelectric generating facility, which has a nominal capacity
of 2,400MW.
The second power project was awarded to TNB’s wholly owned subsidiary, TNB
Janamanjung and the third to Malakoff Berhad. Both plants are coal-fired plants, each
with a nominal generating capacity of 1,000MW. For the latter two projects, the Energy
Commission for the first time carried out a tender process.
iv Market developments
There has been a hive of activity in the energy market for the past year, mainly due to
the ambitious plans of Sarawak to turn itself into a power-producing state, meeting the
electricity demand in the peninsular Malaysia.
For the past few years, the state of Sarawak has embarked on a massive regional
development known as the Sarawak Corridor of Renewable Energy (‘SCORE’). Under
SCORE, the state had planned to produce of up to 28,000MW of electricity to supply
to various new high electricity consumption industries in Sarawak. The plan was to have
a mixture of 20,000MW energy from hydroelectric generating facilities, 5,000MW from
coal-fired plants and 3,000MW from other types of generating plant. Electricity from
the Bakun 2,400MW generating facility forms part of the supply chain under SCORE.
Apart from the Bakun dam, the Murum hydroelectric dam is expected to be completed
by end of 2013, adding another additional installed capacity of 944MW. It was also
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