More power plants needed

More power plants needed (The Star)

After years of talking about over supply of power, high reserve margin of more than 40%, finally Malaysia realizes that our power generation capacity is not as high as earlier thought. In fact, our reserve margin will dip below 20% in a couple of years time, particularly when the first generation IPPs have their PPAs coming to an end.

There is no doubt, that planting up of new plants would be a necessity soon. But given the high cost (we are talking about billions), the planning required, issues of subsidy and the messy power industry setup, I wonder how long will it take for new plants to come online. That gas supply in Malaysia is insufficient is another cause of concern. Gas curtailments are almost becoming a normal affair - ask anyone who's familiar the gas industry especially in the southern region. And it all stems from the government's poor response to the gas subsidy issues and prolonged artificial suppression of the real cost of generating electricity. This has put Malaysians in a precarious situation and put TNB in a fix. We are simply not selling electricity at the real cost of producing it! On the other hand, with Malaysia caught in the 'middle income trap' (I'd rather call it low-income trap), how can the real cost be passed through without a political backlash?

So I think, the government has to really think about how it wants to restructure the energy industry for the long-term sustainability of it. Enough of politicking, short-term solutions and vote-buying tactics. If the government doesn't act soon, the reserve margin will drop to 20% and below. And in case you don't know what that means... revisit the days of nationwide black-outs in the 1990s! And I don't know where I'm going to hide if that happens again cause I've been quite confidently telling people that the days of national blackout is quite over coz TNB has in place a much more sophisticated system to handle such emergencies! Lets see....