annual report - Tenaga Nasional Berhad

Chairman’s Letter To ShareholdersIn the year under review, the Groupposted an Unplanned Outage Rateof 3.3%, once again surpassing theglobal industry benchmark of 4.0% andreduced our gearing to 46.9% (FY2007:49.9%). We brought Transmission& Distribution Losses down to 9.5%(FY2007: 10%) and trimmed down ourTransmission System Minutes time to 6.6minutes (FY2007: 9.3 minutes). We alsosuccessfully reduced our DistributionSystem Average Interruption DurationIndex (SAIDI) to 78.0 minutes against83.0 minutes previously.New technologies to automate, enhanceand simplify various customer-relatedprocesses, systems and applicationscontinued to be introduced in FY2008to ensure better service and forcustomer convenience. All divisions inTNB successfully renewed their relevantISO certifications and were focused onfollowing through with their respectivecontinual improvement plans. The Groupwill continue to work hard to improveon the high standards of operationalperformance and service excellencethat are already in place at TNB.[ Tenaga Nasional Berhad ] [ Annual Report 2008 ]Fulfilling our customers’ demand andexpectations for service excellenceand a secure and reliable supply ofelectricity remains our priority. TheBoard encourages efforts to furtherengage our customers and stakeholdersthrough various mediums and channelsof communications in order to creategoodwill and understanding towardsservice excellence.Industry Issues And ChallengesEnergy Supply SecurityEnergy supply security is a challenge forthe Malaysian Electricity Supply Industry(ESI). Currently, the power sector isfaced with limitations on natural gasavailability, which have increasedour reliance on imported coal. Thisconcern on the country’s fuel sourceand fuel mix, coupled with the presentimbalance in the ESI structure and theincreasing demand for fuel from Chinaand India, underlined the urgent needfor a comprehensive energy strategy soas not to compromise on our energysupply security.TNB is working aggressively to identifyrealistic alternative fuel sources and todiversify our generation mix. We areexploring several options to ensureMalaysia’s electricity supply security issustained in the long run. Hydroelectricpower will feature more prominently inthe country in the future. In PeninsularMalaysia, approximately 600 MW of thetotal 1,700 MW hydropower potential isbeing initiated for development, whilethe Sarawak Corridor of RenewableEnergy (SCORE) has the potential togenerate 28,000 MW of electricity forthe country. Other options includetapping renewable energy sources suchas solar and biomass. We are alsoseriously looking at nuclear energy asa source for power generation in thefuture.TNB is also committed to increasingenergy efficiency in order to reducewastage. We will continue to engageand educate our customers on theimportance of using electricity wiselyand efficiently. On the industrial front, weare constantly educating our customerson the intelligent use of energy throughthe adoption of smart energy systems.30