Malaysia is in the midst of a fivefold increase in coal-fired generating capacity within the space of three years, from 700 MW at the beginning of 2001 to 3,800 MW by the end of 2003. Another 3,500 MW of coal-fired IPP capacity is slated to come into commercial operation commencing 2006. This is expected to result in Malaysian coal imports increasing from less than 2 Mt in 2000 to 17 Mt in 2010. Australian and Indonesian coal exporters will benefit most from the surge in demand.
Malaysia has historically imported around 60% of its coal from Australia, 30% from Indonesia, and 5% from China and South Africa. But Indonesia will take a larger slice of the Malaysian market in future as it has secured the lion’s share of longterm supply contracts with the new power stations.
Electricity Demand
Historical growth in Malaysian electricity demand has been breathtaking. Between 1990 and 2000 electricity consumption increased by 211% - an average compound rate of 12.0% per year (tabulated below). Over the same period, real GDP increased by ‘only’ 88%, or an average compound rate of 6.5% - this despite the setback of the East Asian financial crisis in 1998. In 2001, growth in demand for electricity was reportedly 5.7%, although official data is not yet available.
The 1990’s was period of massive development of infrastructure in Malaysia, so the rate of growth in electricity demand is expected to be significantly lower in future, both in absolute terms and in terms of GDP intensity. Nevertheless, the Malaysian government is forecasting another 5% increase in electricity demand this year, and annual growth rates approaching 10% can be expected when the economy is restored to full health.
On top of high growth of electricity demand, coal is expected to increase its share of the market from 7.9% in 2000 30.3% in 2005. Malaysia has two operating coal-fired power plants, Kapar and Kuching, one under construction, Janamanjung, and two in the process of obtaining permits, Tanjung Bin and Jimah. Malaysia’s coal-fired power plants and projects are tabulated below.
Kapar
Use of coal for electricity generation commenced in Malaysia when 2 x 300 MW units of the Kapar power station (or more correctly the Sultan Salahuddin Abdul Aziz power station) were commissioned in 1988. These two units are dual fuel, capable of burning coal or gas. After the commissioning of these two 300 MW units there was a ten-year break before development of the Kuching power plant (see below) increased Malaysian coal-fired generating capacity to a total of 700 MW in 1998.
Malaysian coal-fired generating capacity more than doubled to 1,700 MW in 2001 with the commissioning of two new 500 MW units at the Kapar power station. Kapar is now capable of consuming up to 4.5 Mtpy of coal.
The Kapar power station is located west of KL on the coast of peninsular Malaysia - near Port Klang in the state of Selangor. State utility Tenaga Nasional Bhd (TNB) is in the process of finalizing a deal to sell 40% of Kapar to Malaysian company Malakoff Bhd.
Kuching
Kuching is a small 2 x 50 MW power plant located at Sejinkat in the state of Sarawak on the island of Borneo. Kuching is expected to remain the only coal-fired plant outside peninsular Malaysia for the foreseeable future, with future electricity demand in Sabah and Sarawak likely to be catered for by the 2,400 MW Bakun hydroelectric scheme. Coal for Kuching is mostly supplied from a domestic coal mine.
