September 2010
PF 10-12
Profiles
Prospects for coal and clean coal
technologies in Malaysia
‘Coal demand is more
than 30 Mt/y’
‘Coal-fired capacity could
double to 15 GWe by
2030’
‘The economy is
migrating to market-led
forces, albeit slowly’
Malaysia is a regular participant in
world coal trade although production is
a modest 1 Mt/y. Coal reserves are
concentrated in the coalfields in
Sarawak in the north of the island of
Borneo (while the south of Borneo is
occupied by the Indonesian Kalimantan
provinces). In Sarawak, coal reserves
contain subbituminous rank coals which
are higher in moisture and lower in
energy content than the average
bituminous coal that is traded
internationally. The coals in Sarawak
are therefore not too dissimilar to some
coal types found in Indonesia.
The region of Sarawak is unusually
well endowed with energy reserves, yet
the demand centre remains the
mainland Peninsular which has little or
no coal. While Sarawak contains most
of the coal reserves, there is also
considerable hydroelectric potential.
Offshore, Sarawak is the base for the
country’s large gas reserves.
As one of ASEAN’s most
prosperous economies, the expected
growth in electricity demand is
inevitable. For many years the country
has been dependent on gas-fired power,
much of which is in the form of the
more expensive single cycle gas
turbines (compared to combined cycle
gas turbines). However, coal-fired
power has emerged as an important
provider of power in a country
desperate to improve its energy
security. This report looks at how
coal-fired power has developed in the
country, the current technologies
deployed, and progress towards cleaner
coal technologies. This is one of a
series of reports by the IEA Clean Coal
Centre on ASEAN countries, and
follows reports on Indonesia, Thailand
and Vietnam.
Malaysia is gradually moving
towards a western style energy policy
with a concerted effort to increase the
role of renewable electricity and energy
efficiency. Malaysia was present at the
World Climate Change summit in
Copenhagen in 2009 and is also a
signatory to the Kyoto Protocol which
expires in 2012, but Malaysia has no
legally binding targets for CO2
emissions.
Historically, Malaysia has been
dependent on oil- and gas-fired power,
both of which are expensive fuels.
Reserves of liquid fuels are sufficient
for 20–40 years based on current
production. Malaysia does not have a
large domestic resource of coal
compared with countries like Indonesia,
although its coal demand is more than
30 Mt/y. Coal-fired power plays an
important role in the power generation
sector. The relatively secure supply
chain for internationally traded coal,
notably from Indonesia offers a
reasonably reliable source of primary
energy for Malaysia, at least for now.
Hydroelectricity is being pursued is
being pursued more than any other
form of renewable in terms of overall
generating capacity. One emerging
alternative to hydropower is biomass
combustion power, but current
generating units are small and are built
to complement rather than replace
natural gas fired, coal, or hydro stations
at this time. Malaysia and Indonesia are
massive producers of palm oil which
supplies the world vegetable oil market.
The ample waste product availability
(from palm oil production) could
disrupt future coal-fired power projects
as biomass would be perceived as
environmentally more friendly than any
coal plant. Yet, the Copenhagen
Summit called for a halting of the
expansion of palm oil production under
a deforestation programme which
Malaysia and Indonesia opposed. The
situation for sustainable electricity
production is therefore far from
straightforward and in this case highly
controversial.
Malaysia therefore faces a policy
dilemma, especially the energy
deficient regions in the northern parts
of Borneo. The focus of new capacity
turns to hydroelectricity for
forthcoming years. Eastern Malaysia’s
hydro corridor is being developed
around a number of river basins in the
state of Sarawak in Borneo, and will
add a considerable amount of
hydropower to the demand centres on
the mainland Peninsular. However, a
significant amount of the hydropower
could be destined for the mainland
peninsular to the west, while the
regions in the east of the country could
face severe shortages.
Malaysia currently has some 8 GWe
of coal-fired power capacity, most of
which is owned and operated by
independent power producers. The last
major power station to be built was
commissioned in 2009. The Jimah IPP
power plant has a capacity of
1200 MWe, and could be the last
coal-fired station to be completed for
some years. Coal-fired power in some
parts of the country has faced
considerable opposition especially if
projects encourage opencast mining in
environmentally sensitive areas. No
140
thermal coal for power stations
120
non-metalic minerals (mainly cement)
100
Mtce
80
60
40
20
0
1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Malaysian coal demand trends in Mtce
new plants are expected, except for
possibly a 300 MWe plant in Sabah
state which is currently facing
considerable resistance by lobby
groups. However, according to recent
IEA analysis, coal-fired capacity could
rise to 14.6 GWe, compared with the
current 8 GWe.
The current coal-fired technology
consists of subcritical stations equipped
with flue gas desulphurisation,
particulate control and many with low
NOx facilities. Carbon capture and
storage is not yet on the agenda.
Climate change issues are being tackled
through a greater role of renewables,
but most of this is conventional
hydroelectricity, along with a number
of small biomass plants which could
qualify for credits under the clean
development mechanism.
Coal supplies will probably come
from the international seaborne market.
As an importer, the country trades some
30 Mt/y of mainly steam coal and so
any further growth in coal-fired
capacity could place Malaysia as a
major importer of steam coal in the
world market, at least by today’s
standards.
Energy prices are regulated by the
government. While the state utility,
TNB, retains considerable power in the
downstream power supply market, in
the generating market, TNB has
relinquished market share to the
independent producers. So the level of
regulation of tariffs will remain
questionable if private sector
participation is to be encouraged to
build capital intensive generating
projects.
Tariff increases are being
implemented for power and gas, but
coal prices have been subject to
favourable and below market level
agreements, even with Indonesian
suppliers. However, the situation is
changing. The economy is migrating to
market led forces, albeit extremely
slowly.
Each issue of Profiles is based on a
detailed study undertaken by IEA
Clean Coal Centre, the full report of
which is available separately. This
particular issue of Profiles is based on
the report:
Prospects for coal and clean coal
technologies in Malaysia
Paul Baruya
CCC/171, ISBN 978-92-9029-491-7,
38 pp, July 2010,
£255*/£85†/£42.50‡
*
†
‡
non-member countries
member countries
educational establishments within member
countries
IEA Clean Coal Centre is a
collaborative project of member
countries of the International
Energy Agency (IEA) to provide
information about and analysis of
coal technology, supply and use.
IEA Clean Coal Centre has
contracting parties and sponsors
from: Australia, Austria, Brazil,
Canada, China, Denmark, the
European Commission, Germany
India, Italy, Japan, Republic of
South Korea, the Netherlands,
New Zealand, Poland, Russia,
South Africa, Sweden, Spain,
Thailand, the UK and the USA.
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