INGENIEUR
Figure 11 : Pricing Risk of Coal Source : TNB [ Ref . 5 ]
gas price by setting domestic gas price at cost plus level . In this way , the gas pricing formula brings benefit to the national economy and ensure security of supply .
Currently , Malaysia has an “ interim ” policy on gas pricing for the existing 12,000MW installed gas-fired power plants which require a total gas volume of 1744 mmscfd for full operation . For the first 1000 mmscfd , the Government-subsidised price is RM16.7 per mmbtu for indigenous gas . Beyond this volume , it is based on the LNG market price which is about RM40 + mmbtu . The Government subsidy for indigenous-gas power generation will be gradually removed . It is not certain at this point in time what the final gas price to be used would be after the removal of this Government subsidy . However , for the purpose of determining future energy mix and generation plant-up programme , we have assumed the expected global market price of LNG , which is about RM40 + per mmbtu .
( c ) Resource Accessibility and Pricing Risk of Coal
Malaysia started to plant-up coal-fired electricity generating units when imported coal price was very much lower , as shown in Figure11 . Coal price was stable for decades but started to increase after 2003 and has since climbed to new levels due to a surge in worldwide demand .
Malaysia fully imports its coal from Indonesia , Australia and South Africa .
In terms of resource accessibility , the steam coal export market is geopolitically concentrated . Only Indonesia and Australia are the main export countries with a combined export market share of about 80 %.
It is a known fact that there are plenty of coal in the ground in countries like US , China , India , Europe and Russia , but these countries strategically reserve this indigenous resource for their own respective domestic power generation needs . The United States holds over 25 % of known world reserves , putting it in the same position
58 VOL 86 APRIL-JUNE 2021