May 302011
Just so that you know, TNB’s revenue and net profit for the last five years.
Source: TNB Annual Report 2010
TNB incurred RM12.5bn for power purchased from external independent power producers (IPPs) in the 2010 financial year compared with RM11.8bn in 2009.
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This is clear sign of Nanny state “natural monopoly” （AKA legal monopoly) hurting the country economy and productivity. Whether head or tail, profit or loss, the people are the one that losing the game.
Today, there is no such things ANY utilities services are “too big” that out of reach of private funding. When US government deregulate the electricity market in various state, Retail Electric Providers are very alive and stay competitive.
When some politicians inside the government become smart-alecks and try to be show he know how on utilities infrastructure, it will destroy the natural competitive edge and efficiency. Heavy regulated government always use one screw up to “fix” another screw up. TNB screw up in 80′s and cause major electricity outage, give Mahathir excuses and promote his EPU propaganda to enact and support the idea of cronies Independent power provider(IPP). In fact, Malaysia IPP are NEVER independent. Government has a strong visible hand inside IPP, EPF and various funds has a HUGE share inside IPP. And IPP tariff and price are heavily regulated , the IPP electricity selling price are just Mahathir government “price fixing”, in order to hide huge hidden cost and bad efficiency of IPP.
In fact, although TNB are “more efficient” than IPP, it is no way near the real world competitive edge. The “1996 west Malaysia major blackout”, is actually TNB own making. The centralise electricity grid idea are indeed stupid. But there is always government propaganda come to rescue and tell you centralise grid are “good things”, thus justify the move on spending hundred billions (to date) to support IPP to fit into the centralise grid, to “prevent” a major blackout.
No country can build a electricity infrastructure that huge enough to compensate a centralise grid failure, e.g. when a major power plant out of the grid, getting plan trying to compensate it will make the situation worst, it just trigger a domino effect , overload existing electricity plant and shutdown more grid. While in fact, the real world solution are isolate the “shared grid”, in order to prevent the domino effect.
Alas, when problem come to smart-alecks politician like Mahathir Muhammad, he try to be smart, and play he know the utilities services. Thus, Mahathir cronies come out the idea of IPP, and then the rest are history.
Unlike many infrastructure needs, generated electricity cannot be stored. If you generate too much electricity, it is just wasting the fuel that generating it (except regeneration power such as water,wind and solar ). And the electricity generation process are not ASAP, it took time to increase/decrease the power on fuel feeding. Thus, , movement such as “earth hour”, are IRRELEVANT to Malaysia, because TNB and IPP still feeding the generator with same amount of coal and gas running their turbine. While in US and Europe, utilities company has start adjusting the fuel during such event, thus saving them money and reduce carbon.
The same amount of fuel for Earth hour, are more profitable when use in day time. In many 1st world country, multiple tariff meter are used, day time electricity are more expensive than night time. Thus by joining the Earth hour, same amount of coal/gas saved, can be used for day time higher tariff electricity generation. So in fact, efficient electricity company know how to harvest the benefit of Earth hour. This is a huge contrast when compare to “legal monopoly” TNB .
Leveraging infrastructure are actually something that Malaysia suppose to familiar with , e.g. cheaper phone tariff during off-peak hour. Thus, when fax invented , business practice to send bulk fax during night time. And this spark invention of various fax machine to cater for such needs till internet era. Simple day/night multiple tariff help besides shaping the usage pattern, it also help provider recover peak usage capital expenses in more realistic way, and also help reduce peak usage and leverage the utilisation to off peak hour. It is a win-win situation for providers, consumer and the overall economy.
By heavily regulated and legal monopoly electricity industry, Malaysia are behind the real world 20 years on the more efficient multi-tier electricity tariff. It killed innovation and stale the economy. Real player can never join the power generation business in Malaysia, it is a field for political cronies to reap profit, rather than bringing down the price, increase efficiency.
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Just some correction, electricity can be stored, into battery, except it is not economy feasible for country like Malaysia. Due to heavy subsidies, TNB and IPP has no reason to use load balancing methodology or need to think about “smart grid”.
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electricity can be stored, into battery ???
Even at the capacity of a whole country like us ???
Unbelievable !!! Or are you trying to out do tunglang’s oldies with your own fairy-tale ???
Show me the proof, please.
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I think perhaps he might be referring to a fairly popular electric car theme where everyone’s car battery works as grid storage when the car is stationary. I also think it’s slightly pie-in-the-skyey (if you use the stored energy for shortfalls on the grid, does everybody have to walk?), but the maths might be reasonably close. Without the hypothetical ubiquitous electric car, you’re quite right.
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Gerakan K,
There are still people loving things oldies (not only in Malaysia lah). This is a universal fact of anthropology.
Anyway, thanks for free advertising of Tunglang.
You see, one can achieve fame or notoriety @ anilnetto.com!
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The rakyat are questioning why the government finds it easy to withdraw subsidies from ordinary people and not IPPs. This double standard raises concerns that the government is protecting the IPPs, which incidentally were created during Dr Mahathir’s watch.
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Hi Anil,
It is good if someone can display the profits for the past 5 years or so of the IPPs.
The public should demand the contracts made between the govt and the IPPs be open to public scrutiny to examine the alleged lop-sided sweet-heart deals given to rent-seekers and BN/UMNO cronies! The public has a right to know as it is the public who has to pay for such lop-sided deals. UMNO Baru is trying to hide such deals under the guise of the OSA!!?
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We all know why BN dare not reveal IPP contracts using OSA as an excuse for the self interests of their cronies in the privatisation of essential utilities.
Why then should we contineu to pay taxes to the government when we still have to pay market price for essential services, which in the first place should be provided at minimum cost to us by the government from taxes collected from us.
BN subsidises these privatised operators of essential services at an escalating pre-determined price (profit) over the privatised period and pass the price increase to us, the end-users. The end-users must stand up to such abuses and vote the BN (Barang Naik) out in GE13.
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Could it be that PM Najib dare not offend Mahathir in disclosing the contract between IPPs and TNB because people will get extremely mad at BN when they come to know how little Mahathir had cared for the rakyat?
The situation is like asking all the BN MPs to declare their assets publicly and that include all the business connections they have with the GLCs or other crony linked mega projects. If they are reluctant or rather refuse to do so, it can only mean one thing i.e they are sharing a piece each of the pie. So, do you think they will allow all these to be disclosed?
The government can then no longer hide behind the legal jargons to deny full public disclosure. If the government still insist it cannot make the disclosure, the public should contribute money to a public fund to engage the Bar Council to take the the Government to court (can we hope the court to be impartial) to ensure future generations do not have to bear the new cost of living – as we know , once the cost of every thing has gone up due to increase of tariffs,the cost will just keep going higher.
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on the latest issue of the federal people wanting to build a dam in penang — urgh… i smell a big, big stinking, rotting rat — and they couldn’t have chosen a bigger rat to be the spokesperson…
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Another Satu Lagi Projek?
My hunch is this dam projek will be another Penang ‘damned problem-after-hand-over’ for LGE to shoulder.
And damn leaking / leeching projek it will be.
Any Penangite want to sell PBA water?
Singaporeans really love it for enhancing their food!
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Frog under the coconut shell can never understand how the real world work.
Google Electric Storage, it reveal USA are the pioneer. The largest lead-acid electric storage located in Chino, California, 40 MWh. Commission in year 1988. Yupe, 1988, not 2008.
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40MWh when a typical power station output is measured in GW is 40h/1000 = 40x3600s/1000 = 144s or just over 2 minutes of power backup at 100% efficiency.
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Be realistic, we all know the purpose of battery. Electricity storage are never mean to replace power plant.
Take Japan nuclear crisis as examples. If Tokyo Electric has such battery in the first place, it will buy them extra time restoring the power, avoid the current meltdown SNAFU .
When carefully plan, the extra battery power may compensate a temporary surge of usage, leverage the power plant fuel usage, rather than burning more fuel.
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I think you’re missing the point. The largest (I haven’t checked your claim) battery storage system in the world provides for 2 minutes of backup for one 1GW power station. If you were to backup one 1GW power station with installations of “the world’s largest battery pile” (at 40MWh, which sounds very impressive to me, for what it is) and set a target of 24 hours backup, you would need 720 such installations.
I don’t want to pee too much on your bonfire. It’s not that it’s impossible, it’s just that it’s really, really not as straightforward as you’re suggesting. We could have an energy policy that aims to guarantee replacement energy for one 1GW outage nationally, and spread copies of “the worlds largest battery pile” throughout Malaysia – say about 70 such installations per state, but it’s still a colossal undertaking. It’s close enough to totally unlikely as to be literally fantastic.
That’s why I mentioned the vehicle battery proposition – because there’s no credible prospective future in which we have so many reasonably large electrical storage batteries as the one in which nearly all of us have one or two really quite respectably large batteries connected via charging equipment to the grid. That future is by no means certain.
The Fukushima plant was a 4.7GW power station and hasn’t produced power for 81 days. For Japan to have employed your solution to replace the missing power generation with electricity storage batteries would have required them to have built and charged (which would have used the full output of Fukushima 1 for 81 days / charging efficiency) 720 x 4.7 x 81 = over a quarter of a million copies of the world’s largest electrical storage system.
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I think we are both talking apple vs orange here.
I am talking how electricity storage COMPENSATE the grid,etc facilities. I assume you are more interested on storing electricity into electric driven appliances.
I read my comment again, I don’t see where did you get the hint that I say the electric storage can REPLACE power plant , such as Fukushima gigawatt power output. What I am talking about is how the battery provide some sort electricity current during emergency/sudden surge.
Indeed, the damaged Fukushima plant already rely on its BATTERY to cool down the radioactive fuel. Because the backup generator already destroyed by the tsunami wave during earthquake.
Nevertheless, Tokyo electricity has drag its own feet and hide the severity of the plant. They know the dire situation (of no backup generator) on 11st, and only start tapping cooling system to the grid on 15th. The battery already buy them crucial time, but Tokyo electric management still screw up the whole crisis control.
Battery power vehicle are noble idea. It is reality , the lighter and simple electricity bicycle in China has proof the concept. However, Malaysia government has enact a bill and killed it.
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The BN government is slowly but surely dimininishing our purchasing power with its different stages of barang naik strategy so as not to create a ‘sudden impact’ to poor consumers.
But the cumulative effect those individual hikes (BN’s euphemism as ‘subsidy rationalisation’) over the years has made food prices going up, up, up, even in small towns and villages.
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All PPAs and other PPAs should be disclosed and it could be determined once and for all whether the government has been equitable in its energy subsidy cuts for end consumers while maintaining lopsided arrangements with the IPPs that supply power to utility firm TNB.
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