How Malaysia’s Tenaga plans to cope with disruption

By Medha Basu

The utility’s Chief Strategy Officer discusses his three key priorities to renew its business.

Malaysia is hugely dependent on oil - both to run the government and economy. More than three quarters of energy consumed in Malaysia is sourced from fossil fuels, and the government gets between 15% to 20% of its revenue from petroleum.

While the government has been gradually decreasing its reliance on oil over the last decade, the energy market is just starting out. “There is much room to grow in Malaysia in terms of obtaining the benefits of better energy efficiency with electrification,” says Datuk Fazlur Rahman Bin Zainuddin, Chief Strategy and Regulatory Officer of Tenaga Nasional Berhad, the country’s dominant electric utility.

At the opening of Asian Utility Week 2019, Fazlur Rahman set out the utility’s three key priorities to cope with these and other changes in the industry.

1. Leading renewables player

The first is to secure future sources of energy generation, he said. “We will actively diversify into energy sources that are able to meet the needs of the future in a sustainable, reliable and affordable manner.” The utility wants to create more energy from renewable sources, he said. “The ultimate aim to position TNB as a renewables player in the region.”

About 2% of the country’s energy demand is supplied by renewables and the government plans to set a target of 20% for 2025. “We have diversified TNB's generation portfolio via the 80 megawatt of large scale solar facilities in Malaysia, and 365 megawatts of solar PV and 26.1 megawatts of wind power Internationally”, Fazlur Rahman said.

2. Grid of the future

The second key priority is to strengthen and modernise its grid infrastructure. TNB wants its power transmission system to be “amongst the most technologically advanced and reliable in the world”, he said. The utility will need these “to meet future challenges and growing demand in an increasingly liberalized generation market”. Malaysia plans to break up Malaysia’s electricity oligopoly and allow new companies to supply electricity.

A more resilient and reliable grid will be critical for many of the country’s other energy goals, including growing renewable energy generation, electric vehicles, battery storage and distributed energy networks. TNB plans to invest RM18.8 billion between January 2018 and December 2020 to expand and improve the grid.

This will involve connecting the grid with smart meters that the company is installing, he said. “1.5 million smart meters will be rolled out by end 2020.” Data on energy use combined with the grid’s capacity and reliability will allow the utility to manage the rollout of new services like microgrids and electric vehicle charging.

3. Winning over customers

The third area of focus will be to improve customer experience, Fazlur Rahman said. The business has about 9 million customers across the country, but like with many other state-owned utilities, customer engagement has not always been a priority. The utility is launching digital services, which will “increase the customers’ interaction with the utility which in the past probably has been lacking”, added TNB’s Chief Retail Officer Megat Jalaluddin Bin Megat Hassan.

The company has launched its first app that allows customers to subscribe to and pay for services, he said. In the backend, it has linked up CRM and billing platforms so that customers can access services from a single platform.

It is also building advanced analytics engines to understand consumption patterns. The mobile app will be a new source of data to get more precise insights. It will use the analytics to send personalised alerts to help them manage energy consumption, Megat Jalaluddin added.

It has a raft of other digital platforms coming up. It is testing a peer-to-peer solar trading platform with its regulator, the Energy Commission of Malaysia. “We're also introducing renewable energy certificates for the customers who would like to buy green energy direct from the market,” he added.

In the future, it wants to add an e-commerce service where customers will be able to buy home automation and energy-related products online. “We hope that the utility digital marketplace will be the next Lazada of Tenaga,” Megat Jalaluddin said.