Powering Forward


Economic News

22 Jul 2010
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Malaysia is planning to broaden the mix of its energy sources in an effort to utilise alternative power generation processes to propel economic growth, with nuclear energy being promoted as one of the preferred solutions to the country's dependence on hydrocarbons.

Currently, plants using gas, oil or coal as their fuel source generate some 85% of Malaysia's electricity. The largest non-carbon contributor to the power grid is hydroelectricity.

This strong emphasis on hydrocarbons is set to change in little more than a decade if the government follows through with a proposal made public in early May, when Prime Minister Najib Razak unveiled plans to develop a nuclear energy programme.

Malaysia could have viable nuclear generation capacity by 2021, Najib said on his personal website on May 4. The government is already studying the possible use of nuclear energy as an efficient and cost-effective means for electricity generation, with the Ministry of Energy, Green Technology and Water having been tasked with identifying possible sites for nuclear power stations, he said.

"If we press ahead with nuclear, 12 to 15 years could elapse before energy is produced using small reactors," Najib wrote. "Our non-renewable natural resources are finite. Eventually, the supply will end. In this regard, our current fuel mix for power generation in Malaysia is skewed too much in favor of natural gas and coal."

Obviously the announcement was not a case of policy being made on the fly, with Peter Chin Fah Kui, the energy, green technology and water minister, issuing a statement the same day as the prime minister saying that his ministry was looking at potential locations for a nuclear facility and that the government might consider obtaining technology from South Korea, China, France or Japan for the plant.

The prime minister's proposal is not the first time the nuclear energy option has been put on the table. In mid-2008, as oil prices soared, state utility Tenaga Nasional said it had drawn up initial plans to develop a 1000-MW nuclear power station at a cost of $3.1bn. The question of nuclear energy has also been raised a number of times over the previous decade and before, but with Malaysia identifying increasing reserves of gas in that time, and the electricity sector focusing on using that cheap fuel, put nuclear energy was put on the backburner.

Not all agreed with the government on the need to adopt the nuclear alternative, with the opposition Democratic Action Party citing the high level of excess generation capacity Malaysia now enjoys. Pointing to the fact that production capacity currently stands at 23,000 MW – a total that is set to climb with the completion of hydroelectric projects on Borneo – while consumption is running at 14,000 MW, the party secretary-general, Lim Guan Eng, said there was no need to add further redundancy.

"Clearly Malaysia has more energy than it needs," he said in a statement issued on May 5. "Why then does Malaysia need a nuclear power plant?"

Malaysia already has a nuclear reactor, a 1-MW plant located in the state of Selangor and operated by the Malaysian Institute for Nuclear Technology Research, which is primarily used for research and training purposes. Though this small and rather dated reactor has no application for energy purposes, it has helped Malaysia train the cadre of experts needed to operate a nuclear power plant and established the country's credentials as a safe and experienced operator of such a facility.

While pushing the nuclear option, Malaysia is also keen to make use of other energy sources, and to promote measures that would encourage their implementation.

In mid-May, Najib proposed the establishment of what he called a clean energy development bank, a joint project of Muslim nations that would support the growth of clean energy-related industries.

"There is tremendous potential in the development of alternative energy resources," the prime minister told delegates attending the 6th World Islamic Economic Forum in Kuala Lumpur on May 19. "The current reality is that we all stand accused of doing too little, too late. We need to do more to develop alternative energy sources that address growing requirements and prevent further degradation of the environment."

Though the premier did not go into details over his proposal for an Islamic green energy lender, he has said Malaysia is committed to promoting environmentally friendly electricity production and slashing the country's greenhouse gas emissions. Addressing the UN climate change conference in Copenhagen in December, 2009 Najib said Malaysia would reduce its carbon dioxide emissions by up to 40% by 2020 compared to 2005 levels.

In order to do this, Malaysia will have to find an alternative to gas and coal. While wind, water and solar energy are all part of the mix, it seems the government has a warm feeling about going nuclear.

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