Monday 29 May 2023
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KUALA LUMPUR (Oct 5): Malaysia is not facing an energy crisis as is experienced in Europe, China and India amid a spike in prices of natural gas and coal ahead of the winter season, Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed told the Dewan Rakyat on Tuesday.

Mustapa cited coal as an example and pointed at how the commodity that was priced at US$80/tonne at the start of 2021 has now reached US$200/tonne as at October 2021, but did not elaborate on why the country would be safe from a similar crisis despite the surge in the price of coal, which makes up a big part of the country's energy mix.

According to Mustapa, Malaysia's energy mix is led by natural gas (41%), crude oil (25.8%), coal (22.3%) and hydro (6.2%), with renewable energy making up the balance.

The electricity supply industry or power industry generation mix, meanwhile, is led by coal (47%), natural gas (41%) and renewables including hydro (12%). The power industry's installed capacity stood at around 27,000MW, against peak demand of around 19,000MW, Mustapa said.

Prices of commodities have been on the rise this year amid rising demand post Covid-19. A drop in crude oil inventories pushed crude oil prices higher, while demand for natural gas and even coal supply jumped ahead of the winter season amid hiccups in renewable energy generation in countries like the UK.

From its November 2020 low of US$37 (about RM154.62)/bbl, the Brent crude oil price has more than doubled to US$81.60/bbl as of Tuesday.

Similarly, the Henry Hub natural gas price, which tracks the commodity in the US, has risen by some 150% to US$5.82/MMBtu, from US$2.33/MMBtu in December 2020.

Malaysia's natural gas supply for the electricity supply industry is domestically sourced from Petroliam Nasional Bhd (Petronas) with prices slightly discounted to international market prices. However, coal is entirely imported from markets like Indonesia and Australia.

"Energy security is important for a country. As such, the government through the Economic Planning Unit (EPU), the Prime Minister's Department, the Ministry of Energy and Natural Resources and agencies like Petronas, the Energy Commission and Tenaga Nasional Bhd continues to undertake relevant steps to ensure national energy security at all times," Mustapa said.

The minister was responding to a question from Wong Hon Wai (Pakatan Harapan-Bukit Bendera) about the situation of Malaysia's energy security amid rising global energy prices.

At this time, the EPU, the Ministry of Environment and Water, as well as the Ministry of Energy and Natural Resources together with key stakeholders are forming the National Energy Policy 2021-2040, he added.

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Edited BySurin Murugiah & Tan Choe Choe
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