Waste more, spend moree
Energy consumption in Malaysia is high. RM14.5 billion was spent to buy fossil fuels in 2011. Energy, Green Technology and Water Ministry secretary-general Datuk Seri Ir Dr Zaini Ujang discusses on Astro Awani’s ‘Agenda Awani’ show how electricity can be
compared with our neighbours Indonesia and the Philippines.
They may impose a higher tariff, double ours, on their customers. But, the issue is, why is it cheaper in Sweden? Because they depend more on renewable energy. Primarily, they use hydro electricity, nuclear, wind turbines and they also use a lot of biomass, which is solid waste.
Indirectly, we have to shift our focus now from depending on fossil fuel to a more sustainable source of energy. And the transition must be done well. Otherwise, it will cause a lot of problems in terms of reliability and the quality of our electricity supply. So, I would like to state a few things from the pricing aspect.
The average electricity price in Peninsular Malaysia is 38.53 sen. The cheapest that we can supply electricity at is by generating it through the use of coal, which costs 25 sen.
So, if at this price, we can sell at 38 sen and make a profit.
Gas is around 34 sen, 33 sen, 35 sen, 36 sen and lately, 37 sen. At 37 sen to 38 sen, the difference is just 1 sen. But, if we go for other fuel or sources, it will be more expensive. For example, if we go for solar energy on a large scale, the cheapest price is 40 sen.
So, even then we have to ensure that the tariff level stays at 38.53 sen. This is specific, as at more than 38.53 sen, it will cause a steep rise or surge in our price.
A lot of people have asked me, or the ministry, why they cannot manufacture or install solar energy in their areas or factories and, more often, their shops.
By using the feed-in-tariff (FIT) mechanism, it is an incentive tariff and not a real tariff. So, how do we get this tariff, for example, solar, to start from 52 sen and through FIT, it reaches 74 sen? So, we produce and sell to the utility company. If in the peninsula, TNB, and then we use at 38 sen only.
The profit is huge. So, many people are of the opinion that this is a good method for a new source of income, a new business.
It needs to be clarified that this is an incentive tariff. To get this incentive tariff, we must secure the money from other consumers or domestic consumers using more than 300 kw/h monthly. They will be levied a 1.6 per cent charge that is channelled to our renewable energy fund. Commercial and industrial consumers will be charged 1.6 per cent, even if the usage is small.
Why are we making a fuss about sustainable energy? There are two things. One, we cannot fully depend on fossil fuel. The whole world is shifting from fossil fuel to environmentally-friendly fuel.
And, the most suitable is gas, and gas is more expensive. If we depend on gas, it will cost 37 sen and we sell at 38.53 sen for a small profit of one sen.
There are two things that I mentioned earlier. One, if we depend on gas in Malaysia, we have to pay at a rate that is profitable to Petronas.
Yes, it is our homegrown company. The royalty from Petronas will be paid to the government for various purposes. Secondly, we have to find other methods on how to address the issue of cheaper energy and find a replacement to coal. Coal is cheapest, at 24 sen.
In the current situation, our tariff is fixed at 38 sen, coal 24 (sen). Whatever is above 24 (sen) should be balanced so that we get 38 sen.
The more expensive the energy, the more coal we are forced to use to generate electricity. And, this is what we use everyday. The balancing happens daily.
There are sustainable energy sources that are cheap and are not dependent on the entry of foreign products and attract foreign exchange.
For example, small hydro, not big hydro, which needs huge dams. Where there's a river, you can generate at any part of the river.
And, I have been informed by