Malaysia to Boost Hydropower Capacity

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Researched by Industrial Info Resources (Sugar Land, Texas)--Malaysia's energy policy is determined by the country's Ministry of Energy. The Green Technology and Water Energy Commission controls the renewable energy sector by ensuring that supply, utilization and environmental issues are looked after. Although biomass promises to become a significant source of energy in Southeast Asia, countries in the region are not forgetting their most valuable resources: rivers.

Tenaga Nasional Berhad (MYX:5347) (Kuala Lumpur, Malaysia) is preparing to embark on a new hydropower scheme to comply with its own renewable energy ideals, as well as with those of Malaysia. Tenaga, the largest power company in Southeast Asia, is looking to increase its hydropower capacity to 30% by 2030, although the company hopes to meet this goal earlier.

In 2001, the Ministry of Energy implemented the Fuel Diversification Policy that aimed at generating about 5% of electricity from hydropower by 2005. Hydropower currently generated by Tengaga makes up about 10% of the company's total generated capacity, and natural gas and coal account for about 80%. Industry accounts for more than half of the electricity consumption in Malaysia, and Tenaga, which controls generation, transmission, and distribution on Peninsular Malaysia, had an installed capacity of almost 20,000 megawatts (MW) in 2007. Domestic demand now accounts for about 15,000 MW, up 5.8% from 2009.

Tenaga operates three hydroelectric power schemes in Peninsular Malaysia and supplies about 2,000 MW to the regional grid. Peninsular hydropower capacity will be boosted again by the end of next year, when the Bakun hydropower station comes online in Sarawak. The Peninsular grid will receive 1,600 MW of the 2,400 MW generated by the station. Between now and the next quarter, Tenaga will begin construction on two hydroelectric power stations and plans to invest more than $1 billion in the projects. Both projects are scheduled for completion in 2014 and will boost the Peninsular grid by about 600 MW.

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