Boston, MA -- (SBWIRE) -- 06/02/2014 -- We have revised up our 2014 electricity generation growth forecast for Malaysia from 4.6% to 4.9% this quarter. This upward revision was due to strong performance by the Malaysian economy in the last quarter of 2014 and new data on the project pipeline for renewable energy. We retain our modest longterm outlook for the sector as we expect economic growth, positive demographics, and an improving business environment to drive growth beyond 2014. We note that recent developments in the renewable energy sector could pose an upside risk to our forecasts.
We have revised up our 2014 electricity generation growth forecast for Malaysia from 4.6% to 4.9% this quarter. This revision can be attributed to strong performance by the Malaysian economy in Q413 (October- December), as well as the incorporation of new data on the project pipeline for renewable energy. We have maintained our long-term forecasts for electricity generation in Malaysia this quarter, and are forecasting growth to average 4.5% per annum between 2014 and 2023. This is because the development of major power projects in the country remains on schedule, and our key assumptions remain relevant.
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Key Trends And Developments
- On January 1 2014, Malaysian state-owned utility Tenaga Nasional hiked retail electricity prices in Peninsular Malaysia by 15% and prices in the state of Sabah and the territory of Labuan by 16.9%. The revision only affects customers using more than 300kWh per month and they represent around 30% of electricity users in the country.
- The first liquefied natural gas regasification (LNG) terminal commenced operations in Melaka LNG near Sungai Udang in early 2013 and received its first cargo in April. The government has introduced a number of policies and incentives for renewable energy producers. The country's Sustainable Energy Development Agency (SEDA) is responsible for a number of these programmes and regularly releases new data on capacity approvals.
- The country's energy sector is set to become more competitive, following the Electricity Commission's decision to hold a new power generation tender exercise to replace Power Purchase Agreements (PPAs) with first generation Independent Power Producers expiring in 2016/17. The PPAs would be awarded and renewed based on the lowest cost of electricity generation, with only 50% of existing PPAs to be renewed.
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