annual report - Tenaga Nasional Berhad

could pose environmentalissue as a result of emissionof greenhouse gas. For thesustainable development ofthe nation’s electricity andenergy sector and to mitigatethe energy supply securityissue, nuclear power plantshould be seriously consideredas a viable alternative for thefuture. TNB has been workingclosely with other stakeholdersand agencies in particular TheMalaysian Nuclear Agency(Nuclear Malaysia) on thenuclear option.Execution of Service LevelAgreements (SLA’s) withthermal power stationsoperated by GenerationDivisionIn our effort to ensure that allpower generators operate undersimilar business environment, thePlanning Division has developedand implemented SLAs on allthermal power plants operatedby the Generation Division. Alltechnical, commercial and legalterms of the Agreements areadapted from the most recentPower Purchase Agreement(PPA). To date, six individualSLAs had been duly signed.Challenges and ProspectsThe power supply industry willbe facing increasing challengesattributable to volatile fuelprices, energy supply securityissue, current global economicdownturn and deterioratingfinancial condition. In thisregard the Planning Divisionwill undertake various initiativesto mitigate the risks associatedwith these challenges:• Sustaining Long TermEnergy SecurityEnergy supply securitydue to depleting energyresources (gas), high andvolatile international energyprice (coal) and constraints inthe international coal supplychain (both the coal supplysources and infrastructure)are posing major challengesto Malaysia’s power sector.In order to ensure the sector’slong term sustainability inparticular mitigation of theenergy supply security risk,the Planning Division isentrusted to implement thefollowing initiatives:– Harness hydro power inPeninsular Malaysia andSarawak (Bakun etc)– P r o m o t e t h e u s eo f D e m a n d S i d eManagement, EnergyEfficiency, RenewableEnergy and other nonfossilpower sources.– Plan the development ofmore efficient generatingplants.– Assist in preparatorywork for possible useof nuclear energy. Theproject would demandmuch efforts in theformulation of policy,identification of sites,conduct of pre-feasibilityand feasibility studies,instituting the regulation,conduct manpowerplanning.– W o r k c l o s e l y w i t hstakeholders such asMinistry of Energy, Waterand Communications andthe Economic PlanningUnit (EPU), Prime MinisterDepartment on nationalenergy policy studiesfor sustainable energydevelopment.• Review of TNB 20 YearStrategic PlanThe Strategic Plan which wasdeveloped in 2005 sets thestrategic direction of TNB forthe period of 2006 -2025. Thefirst phase which commencedin 2006 sets to achieve ServiceExcellence by 2010. TNB hassucceeded to achieve manystrategic objectives under thisphase despite the impact ofmany external challenges andenvironmental pressures. Toalign TNB with the current andfuture business environment,the Plan will be reviewed andsuitable strategies reassessedfor implementation during itssecond phase (2011-2015)which focuses on geographicalbusiness expansion.• Addressing Major StrategicRisksIn this regard, the Divisionwill provide an active andsupporting role to addressmajor strategic risks inparticular the tariff review,fuel pass-through mechanismand pricing study, andMalaysian Electricity SupplyIndustry (ESI) structureanalysis to ensure thesuccessful implementation ofthe Identification of StrategicRisks and the AssociatedRisks Mitigation Plan.• TNB Strategic PlannersForum and TechnicalPlanners ForumThese biannual forums willinvolve discussion of strategicand technical issues impactingTNB in the medium and longterm by the Group’s strategicor technical planners andrelated executives. It alsoserves as the platform forstaff to be updated onmajor strategic and technicalissues/initiatives as well asTNB policies.• Hydro PPAs with TNBGThe Planning Divisionis currently conductingnegotiations and developmentof SLAs for TNB Hydro powerplants. These include Kenyir,Temenggor, Pergau andCameron Highlands hydroPower Stations.[ Tenaga Nasional Berhad ] [ Annual Report 2008 ]85