Energy and Development
Datuk Seri Ir. Azman Bin
Mohd is President and CEO
of TNB, the leading energy
provider in Southeast Asia:
“We power Malaysia. As
the nation grows, we will
be there.”
Tenaga Nasional Berhad:
New Ways to Power Malaysia’s Future
Malaysia’s rapid economic development
­requires reliable and efficient power supply.
Datuk Seri Ir. Azman Bin Mohd, President and
CEO of the country’s main energy provider
TNB, is striving for new standards of efficiency,
reliability, and cost-effectiveness.
Text: Glenn van Zutphen Photos: Sha Ying
T
he weight of 8 million customers rests on the shoulders of
Datuk Seri Ir. Azman Bin Mohd,
President and CEO of Malaysia’s energy giant Tenaga Nasional Berhad
(TNB). In line with the corporate
­motto of “Powering the Nation,” he
approaches the heavy load with a
clear sense of mission and the steady
calm of someone who’s worked at
TNB for 35 years: “Every day, I feel responsible to our customers. We exist
because they exist, and we work very
hard to meet their expectations.” This
clarity and focus appears to be working, as TNB posted its best-ever profit
in 2014 of RM6.4 billion (US$1.84 billion), with over 99 percent coverage
across the country.
Even with those impressive numbers,
Azman knows that energy use across
26 Living Energy · No. 12 | July 2015
his country is on the rise; as of September 2014, TNB recorded a peak
­demand of 16,901 megawatts, which
is expected to grow by some 4 percent
each year. He knows that his team
will need to look forward and devise
creative solutions to ensure longterm, sustainable supply. To deal with
­future growth and the expiration of
existing generators in the system, the
federal government introduced an
­international competitive bidding
process for new power plants. “TNB
believes that bidding is crucial to the
electricity supply sector, as it keeps
prices at reasonable levels and
­encourages healthy competition,”
Azman says with confidence. He further believes that TNB’s participation
in bidding on power plants ensures
that successful bidders will make
reasonable returns and customers
will pay competitive electricity prices – a scenario that he says is good
for everyone.
Future Flexibility at Prai
In fact, as part of the bidding process,
TNB is partnering with S
­ iemens to
­realize the Prai Combined Cycle Power Plant (CCPP) project in the northern part of Malaysia, which will boost
productivity, efficiency, and reliability. Prai will help TNB face challenges
over the next two decades across a
landscape where local natural gas is
depleting and fuel prices are volatile.
The company must also face the implementation challenges of alternative
fuels like nuclear power, hydropower,
and renewable energy (RE), as well
as increasingly stringent emission
standards imposed by the regulators
who are addressing climate change
and emissions from burning fossil
fuels. He believes these issues will be
even more pressing in the years to
come. “Due to a lack of alternatives,
we have to capitalize on hydropotential, RE, and other power sources to
develop our future generation capacity,” says Azman. “We need to manage
the “Not in My Back Yard” (NIMBY)
syndrome for everything from greenfield power plants to the building of
transmission lines – all with a view to
serving our customers.”
Currently, fossil fuels like coal and
gas still account for about 94 percent
of the energy mix for electricity generation in Peninsular Malaysia, while
hydro makes up the other 6 percent.
Other clean sources such as solar,
biomass, or mini-hydro are emerging, but are still a very small part of
the total. One reason why the new
Prai CCPP is so important to Malaysia’s
future is that it offers great flexibility
in incorporating RE into the energy
mix. Renewable sources are in line
with the national agenda on climate
change to reduce carbon emission
­intensity (per GDP) by up to 40 percent by 2020 from 2005 levels.
Azman notes: “Since we are blessed
with abundant renewable resources,
we want to encourage their development. Our government is fully committed to stimulating such development through policies such as the
National Renewable Energy Policy,
the Action Plan 2010, and the Renewable Energy Act 2011. The feed-in
­tariff (FiT) scheme introduced in
u
Living Energy · No. 12 | July 2015 27
Energy and Development
2011 encourages new and significant
­investment from the private and public sectors to enable RE to be integrated
into the power grid, complementing
conventional sources such as liquefied
natural gas, coal, and hydro.”
Energy and Development
Datuk Seri Ir. Azman Bin Mohd: at the Helm of
Southeast Asia’s Largest Power Company
“The smart grid and
advanced metering​infrastructure will help
customers better understand and manage
their energy use.”
Record-Setting Power and
Efficiency
While the obligation to “keep the
lights on” is the obvious priority,
Azman says TNB is constantly
­expanding its business strategy and
practice toward sustainable development across its value chain. These
­developments are divided into two
straightforward categories familiar
to any utility company: supply and
­demand. The supply side comprises
generation, transmission, and distribution of the electricity business –
such as smart grid projects and lowcarbon generation technologies. The
demand side is made up of electricity
end users and customers who are
looking toward demand-side management and energy efficiency.
To help address supply-side manage­ iemens
ment at the Prai CCPP, two S
SGT5-8000H gas turbines will help
make it the most powerful (1,000 megawatts) and efficient (60 percent efficiency rating) gas-powered plant
in Southeast Asia. TNB chose this
­pioneering ­Siemens technology –
first proven in 2011 at Irsching near
­Munich, Germany – because of the
8000H’s technical specifications in
terms of efficiency, fast start-up, and
low emissions, and also because its
flexible design can accommodate the
introduction of RE into the plant
while producing the lowest levelized
cost of ectricity. “Since the gas price is
expected to increase in the future,
highly efficient and flexible CCPPs
are important to ensure lower generation costs and competitive electricity
prices for our customers,” says
Azman. “Moreover, the system operating regime will change, with CCPPs
no longer serving as base-load plants,
but operated in cycling mode; they
should be able to perform frequent
start-stop operations and fast loading and deloading to meet demand.”
TNB is exploring alternative fuel
sources to feed into CCPPs. Potential
28 Living Energy · No. 12 | July 2015
Background and Education
Professional Experience
BEng (Electrical Engineering), University
of Liverpool; MBA, University of Malaya
Has been working at TNB in various
­capacities for the past 35 years
Appointed Chief Operating Officer
of TNB in 2010
President and CEO of TNB since
July 1, 2012
solutions include importing energy
from Sarawak, nuclear power, and
measures to be developed under the
ASEAN Interconnection Master Plan
Study, which looks at how a regional
transmission network can link ASEAN
power systems. All could help to diversify Malaysia’s future generation
mix. Azman anticipates that by 2030,
that mix will include 76 percent fossil
fuel, 4 percent hydro, 2 percent RE,
and 8 percent imported energy from
Sarawak and ASEAN countries.
Time for a Smart Grid
To meet these new standards of
­efficiency, reliability, and cost-effectiveness, TNB is starting a smartgrid ­pilot project to deploy more
­automation and ICT technology in
the Bukit Bintang commercial zone,
Melaka, Putrajaya/Cyberjaya, and
Medini ­areas of the country. While
smart grids make sense for a lot of
reasons, Azman knows that the
implementation costs are significant,
and the case has to be made to customers as to how such technology
will benefit them. “The p
­ ilot project is
designed to help us understand the
technical, customer-related, and regulatory challenges in applying new
smart-grid technologies to our existing system,” Azman says. “If we can
successfully implement the smart
grid and advanced metering infrastructure, customers can better understand and manage their energy
use, and TNB can deliver better customer service when it comes to supply-related ­issues like outages, remote connections, choice of
prepayment, and o
­ ther issues.”
Azman notes that it’s “­absolutely
­important” to have intelligent power
distribution together with transmission networks to ­increase reliability,
response, and restoration time as
well as offer new and more efficient
services.
While coal and gas will remain important fuel sources, the vision of decentralizing power generation and
­harnessing RE through various
­government policies (the Fuel Policy
in 2001, FiT in 2011, and the creation
of the Sustainable Energy Development Authority) are all about planning for the future. The FiT scheme,
for example, will help accelerate
the development of renewable technologies such as solar, biomass, biogas, mini-hydro, and municipal solid
waste projects. This orchestrated
­effort across Malaysia, it is hoped,
will give the country energy security
while allowing it to lower its carbon
emissions. “Malaysia is treading the
path toward becoming a developed
nation that emphasizes RE technology,
competency development, and investment in renewables; TNB is committed
to supporting and fulfilling these
­government plans,” Azman asserts.
Decentralizing and Islanding
TNB is also trying to ensure operational efficiency by decentralizing
and “islanding” its operation by
zones. Currently, large power plants
are planned to ensure the stability
and security of the national grid. But
decentralization through microgrids
is another option being explored in
remote areas, far from the established grid.
While Malaysia has put strong
­emphasis on energy self-sufficiency,
­decision makers also see the advantages of being linked to other ASEAN
countries, and realize that power
sharing could benefit the domestic
market as well as neighboring Thailand and Indonesia. The 2003 ASEAN
Interconnection Master Plan study
(AIMS) looked at how to “develop the
ASEAN Power Grid (APG), promote
power interconnection and trade and
increase transmission capacity of
­interconnection among and between
ASEAN member countries.” A revised
version of that study (AIMS 2) was
completed in 2010.
Interconnected ASEAN
One important element of the APG
is to establish an interconnected,
­reliable electricity supply across
In 2014, TNB Reported …
6.4 billion
Malaysian ringgit (RM) in profits
≈ US$1.84 billion
RM110.7 billion
in assets (US$30.1 billion)
RM10 billion
in CAPEX (US$2.8 billion)
36,146 employees
nationwide
8,636 MW
installed capacity
8.6 million customers
Generation mix
Hydro
10.3 %
Coal
35.3 %
Distillates
0.6 %
neighboring countries. Doing it
t­ ogether spreads the burden of the
large infrastructure investment
that is necessary for generating capacity and building transmission
lines. One project, the HVDC link between ­Thailand and Malaysia, has
been in operation for nearly a decade; ­Siemens supplied part of that
infrastructure.
The Malaysian government also wants
to import power from Sarawak to
boost power generation capacity in
Peninsular Malaysia. Thus, TNB and
the Sarawak Energy Berhad (SEB) are
now reviewing what’s known as the
Sarawak-Peninsular Malaysia HVDC
interconnection project, with a view
toward harnessing the SEB’s hydroresources.
Looking to neighboring Indonesia,
TNB and Perusahaan Listrik Negara,
the Indonesian government-owned
corporation that controls ­electricity
distribution, are planning an HVDC
link between Sumatra and ­Peninsular
Malaysia. “The interconnection,
power transfer, and purchase between
Malaysia and Sumatra would enable
each system to optimize its power
generation development ­program in
the future,” states Azman. In addition
to the HVDC’s ability to ­provide power
between countries during emergencies, it also makes sense for power supply management, notes Azman, because Malaysia uses most of its power
during the day and Thailand and
­Sumatra have heavier usage at night.
Whether working on the domestic
grid or building partnerships among
its neighbors, Malaysia is striving for
new and innovative ways to power its
future. “When I drive down the road
and see TNB transmission lines,” says
Azman, “I think of security, stability.
We power Malaysia. As the nation
grows, we will be there.” p
Glenn van Zutphen has been working as a
journalist for 28 years for the likes of CNN
­International, CNBC Asia, and ABC News Radio.
He is based in Singapore.­
Gas
53.8%
Living Energy · No. 12 | July 2015 29