ELECTRICITY TARIFF HIKE: RIGHT ACTIONS FOR THE RIGHT TARGETS TO MITIGATE THE IMPACTS.

I was quite annoyed when I read statement from the YB Minister in an interview in one of the local daily newspaper on 1 December 2013 where he said that one way to mitigate the impact of the electricity tariff increase for lower income groups is through BR1M.

Why is so much attention being given to address these groups when the more reasonable solution is to redefine the meaning the low income groups with regard to electricity consumption and highlight on what exactly government will do in short and long terms to mitigate the impacts for each sector of users

When me with my EPP9 project team implemented the SAVE Rebate Program for fridge and split unit air conditioners at the ministry in 2011, the target group was consumers using between 200-400kWh per month and based on information given by TNB that time, it covered about 2.5 million domestic users in Peninsula. The rebates targeted the low middle income groups who are paying between about RM44 to RM117 per month at current tariff rates. Currently government is giving electricity for fee and spent about RM150 millions for consumers using 200kWh per month.

Now, let us look the numbers on the all types of electricity users in Peninsula in 2013 from TNB. TNB Consumers as at 2013 is about 7.8 million registered as electricity users.  The Table and Pie Chart below shows the summary based on type of users registered with TNB.

Then let’s look at the Electricity Supply Outlook Report 2013 produced by Energy Commission  for Peninsula on the demand of electricity by type of user in 2012  in the chart below.

The above charts clearly indicate that industry and commercial building users which represent only 17.5% of total registered TNB customers consumed the total of 77.7% of electricity compare to only 20.6% by domestic users which represents 82% of the total users registered with TNB.

And the above statistics from Energy Commission on the trends from 1990 and the projected demand of electricity for Peninsula until 2030 also clearly indicated, domestic users are not the biggest users of electricity and the industry and commercial building users will remain the biggest users in years to come.

The presentation by KeTTHA at the seminar on April 2013 also shared that the biggest potentials of saving is from the industrial sector compare to building and domestic sectors.

Total potential savings that will be resulted from the implementation of the much needed National Energy Efficiency Master Plan and public funds required to implement planned key energy efficiency measures is as follows:

1.  31,947 Gigawatthour and the budget required is at RM698 millions for industry sector;
2. 6,884Gigawatthour and the budget required is at RM 201 millions for building sector; and
3. 11,763 Gigawatthour and the budget required is at RM 88 millions.

These facts  clearly shows  that we should give more attention and efforts to address the right target which is definitely the industry sector to get more impacts energy savings results for the country.

By ensuring these energy guzzlers, the impact would enable us to cushion the need to increase the tariff for domestic users especially for low and medium low income groups. For the expected tariff increase, I would see it would practical and reasonable to maintain the tariff rates that cater the needs of these two groups with the ceiling quantum to be determined with consultation between relevant parties such as policy makers, TNB, regulators and consumer groups.

However I am much more saddened and disturbed just like any other stakeholders in energy efficiency 2 December 2013 at the parliament, which was also the day when the YB Minister announced the increase of electricity tariff for Peninsula and Sabah, the ministry still delayed the effort to push the National Energy Efficiency Master Plan to be considered by the cabinet. Instead  the plan has been downgrade from Master plan to just an action plan and they also claimed there are so much more inputs needed despite inputs from all stakeholders, local and international experts  and consumer groups have been gathered since 2009 until  the end of 2011. Everything just became stand still since 2012 when new officers took over the responsibilities on energy efficiency at the ministry who are now known among the industry players for their arrogance but never been brave enough  to discuss or having dialogue with others outside the ministry.

Basically, almost nothing has been done to pursue the plan by the ministry from June 2013 when the ministry made a promise at the parliament that it will presented to the cabinet by end of the 3^rd quarter of the year. And now suddenly they are telling the parliament and all Malaysians that they need more input which surely they could specify what exactly they need to complete the plan. Suddenly also they claimed that will publish the draft plan for public consultation for one month at soonest possible which has never been an issue before.

With the announcement that the electricity tariff will be increase by an average of 15% from January 2014, there is an urgent need for the government to have the energy efficiency policy with clear objectives and targets together with comprehensive plan for Malaysian users to be energy efficient as key mitigations to deal with the impacts. However, it looks like there is nothing urgent for officers in the ministry since they are still buying more and more time with delay after delay for something that is much needed by Malaysians and the country.

Whose fault that caused the delay? Not difficult to identify the root cause since on few officers in the ministry who are responsible on energy efficiency and all of them are reporting to the same boss, the Secretary General. As a Malaysian and as industry players, I am also guessing what is more to be added to the plan since it has been carefully studied, discussed and finally drafted and also evaluated and monitored by the ministry since 2009. The plan has been reviewed and also already received “endorsement” by international experts and agencies such as from Energy Conservation Centre of Japan and APEC member countries. I personally was involved in-depth with the process from the beginning from 2008 until I left the service in early 2012 and still puzzled until today when suddenly everything seems not right since the new officers took over and all seems to be blessed by the Secretary General too. What is hidden behind all this actually because I do not see credentials of these officers to review and impose their personal thoughts or agenda to the plan?

Can we just let this to continue to happen?

With the new rates will be effective from January 2014, just like few week before that and immediately after the announcement on 2 December 2013, the YB Minister, the secretary general of the ministry continue to sing the same old song by keep claiming that the new rates will not affect 70.67% of consumers in Peninsular Malaysia and 62% of consumers in Sabah and Labuan. They added that is due to no tariff increase imposed on the consumers who use electricity at a rate of, or lower than, 300kWh a month which covers 4.56 million consumers in the peninsula and 260,000 consumers in Sabah and Labuan.

They also claimed that the group most likely to be affected are those whose electricity usage is between 301 to 400 kWh and 401 to 600 kWh with the increase of bill between RM77.52 and RM128.60 and between RM129.12 to RM231.80 respectively and not including 1.6% feed in tariff).Domestic consumer with a monthly consumption of up to 200kWh will have no tariff increase.

For Commercial consumers, there will be an average increase of 16.85% and an average increase of 16.85% for industrial consumers while Special Industrial Tariff (“SIT”) consumers will face an increase of about 19%.

When the YB minister and the secretary general have been continued to give such typical and expected statements that the hike does not affect domestic users just because the rate for users using 300kWh and below remain the same, it clearly showing how much ignorance  and irresponsible they are as representative of the government. We do not need a genius or a highly qualified economist to understand the direct impacts or chain reactions due to the hike which must not be seen at the rate of electricity tariff only.

With most of industrial and building facilities in Malaysia are not energy efficient especially Malaysian owned companies, they will have to face immediate impacts from January next year the industry and commercial building sectors most likely will increase their price of goods produced and services provided to cushion the impact to sustain their businesses with profits. Finally consumers who are also domestic electricity users  will have to pay for that and therefore, such statements from the responsible ministry, it just  shows how arrogant are our policy makers and keep talking rubbish which really annoying ordinary Malaysians like most of us.

So, what need to be done?

It is crystal clear that the focus and immediate measures must be intensified for intensive energy users in industrial and building facilities instead of keep harping on domestic users to save more energy since the impact will be big enough. The priority must be right to target the right groups to ensure bigger and quicker impacts in a short term and to sustain results in a long term.

So, to the honorable YB Minister and the Secretary General, do the right thing for the people and the country within the powers given with the obligations that you need to fulfill with those powers. Do not forget the responsibilities that have been entrusted to you in the government by all tax payers.

My sincere hope is if you are not sure or do not know what to do, please be sincere to Malaysians and the country too, just ask and we are here to help with our time and expertise to work with you. But in the event of you still feel too shameful or too arrogant to admit all that or because you are incapable to take the lead and act, with due respect and to be more honorable, PLEASE RESIGN and let others who are capable to carry the torch.

Spreading energy efficiency messages at ASTRO AWANI 7.45

It was just a normal chat when I met En. Ashwad Ismail , a passionate reporter of ASTRO AWANI at  the merdeka day celebration 2012 at  Dataran Merdeka Kuala Lumpur. We exchanged HP  numbers after I briefly shared with him what I do in my career when he asked.

 

Then we met sometime this year and I shared more on what I have been doing in energy efficiency and to seek any opportunity for to send some messages to Malaysian on the importance of EE for the future. He was interested about the subject but in the same time he also could promise anything but will try to find some ways at the right moment. I was also touched with him when he keep saying that we can only do our best but Allah will decide everything finally. Anyway, may Allah bless you always in you life and career brother because you have a very good and sincere heart from my personal eyes.

 

I am happy enough with that because exploring any opportunity to raise awareness on EE need to continue to cover bigger audience. Any avenue will have to be used to keep sending key messages and having it at ASTRO could be one of them and would be good too.

 

 

I finally received the call from ASTRO Awani on 28 December when I was driving from Gemas to Kuala Lumpur after a consultancy session with my client in the whole day. I was invited to give my views and share my thoughts related to energy subsidies.

 

 

A BIG THANK YOU TO ASTRO AWANI FOR THE OPPORTUNITY GIVEN and I do hope I have managed to send some message to Malaysians who watched the live show on 29 November 2013.

 

Terima kasih daun keladi and I do hope  ASTRO Awani will have more rooms for Energy Efficiency issues and to have thoughts to be shared by more experts from other related entities and government sector in the future especially after the announcement that the electricity tariff will be increased from January 2014.

 

Below is the link to the interview and some photos on TV and at the Studio

 

1. My views on the need of clear energy efficiency policy for Malaysia

 

http://www.astroawani.com/videos/show/awani-7-45/kerajaan-perlu-tetap-dasar-kepenggunaan-tenaga-20243

2. My views on the options and electricity sector  from 20:19 second of the video 

http://www.astroawani.com/videos/show/awani-7-45/awani-7-45-29-november-2013-20244

 

With the Producer En. Suhaimi and the newscaster Nisa Kasnoon

ISO55000 AND THE FUTURE OF ASSET MANAGEMENT Asia Pacific Regional Conference & Exhibition

ISO55000 AND THE  FUTURE OF ASSET MANAGEMENT

 Asia Pacific  Regional Conference & Exhibition

TITLE OF PRESENTATION:

ENERGY MANAGEMENT : SUSTAINABLE  IMPLEMENTATION  FOR BUSINESS SUSTAINABILITY

Available for downloading at the link below.

http://www.slideshare.net/ZAINIABDULWAHAB/iso55000-conference-bali-2013-energy-management-for-business-sustainability

Date:

12-14  November 2013

Venue:

Bali Nusa Dua Convention Centre, Indonesia

THE ABSTRACT OF MY PAPER

Introduction

Energy management has become more significant as one of components in the management of resources in organizations. For organizations with assets in facilities where energy is intensively used and contributing significantly to overall operating costs, energy management has started to be seen as a strategic business move to reduce overall costs to increase profits and sustainable operation.

The combination of the system adopted and technology solutions in energy management implementation require a strong business case to get supports from decision makers to implement and to sustain desired results.

The reduction of wastage resulted from effective energy management implementation as current and future trends to create greener environment while contributing to business sustainability.

The Presentation

In the introduction for the presentation, the speaker will address on why energy management is needed by explaining some key terminologies and the importance of integrating energy management to enhance values in asset management services. The potentials to improve asset’s operational & energy performance to increase profitability for service providers and/or facilities owners will be highlighted briefly.

For the implementation of energy management, understanding on fundamentals and basic  approaches  for sustainable energy management implementation will be discussed and elaborated further which will cover basic components in energy management system, key steps in implementing effective  energy management system and  basics on measurements, monitoring and verification of key energy performance indicators for the system.

The presentation will also share and discuss on the current trends and standards in energy management practices with overview on successful cases studies with significant energy performance improvement and cost reduction. The benefits of adopting energy management standard ISO 50001:2011 - Energy management system will be explained especially on how the standard helps to achieve and sustain desired results with integration of some of its requirements with  ISO55001 standard which defines the requirements for a “management system” for asset management.

To get things moving, the speaker will emphasis on the strategies and tips to ‘sell’ energy management to get the green light from the top which includes preparing the business case of  energy management with key points to get the buy-in from decision makers/top management and business opportunities and investment potentials in sustainable energy management system implementation with other significant potentials from energy management implementation beyond energy costs reduction alone.

Then, among the highlights will be on common key requirements to implement management systems based on ISO50001 standard  for energy and ISO55001 standard for asset that will contribute and sustain cost effective operations and enhance current and future values of facilities by adopting these standards.

 

The presentation will be wrapped up with highlights on The Way Forward, for energy management based on present and future trends in energy management for sustainability/green businesses with an overview of regional market size and potentials in energy efficiency services for energy management in different categories of energy using sectors. Energy management is set to be seen as one of the strategic business tools towards business sustainability and also greener environment for our life and future generations.

PHOTOS FROM THE CONFERENCE

Waiting for my session

Taking the stage...introduction 

Presenting and sharing my thoughts on energy management with asset management

Answering questions from the floor

With the CEO of Asset Management Institute UK, David McKeown

With an old friend, exTNB and now a Senior Consultant with EA Technology UK

With Juliane Mchugh,EA Technology UK

With Asahari Utama, Director, PT. MTS

 Indonesia

With senior experts from PJB Indonesia

The official opening gambit

Mr. David McKeown

The presentation by Datuk Seri Ir. Azman Mohd, CEO of TNB Malaysia

The presentation by Rober Davis, CEO of EA Technology UK

REDUCING ENERGY COSTS WITH LITTLE INVESTMENTS FOR BUSINESS SUSTAINABILITY...A SCENARIO IN MALAYSIA

Energy costs may not be the highest cost in the overall operation of facilities for SMEs & SMIs but with the more competitive and demanding market due to changes in consumer trends  locally and globally, every cent counts especially for those who produce price sensitive products or services.

Financial barriers often being highlighted as one of the biggest obstacles in pursuing energy efficiency in the form of implementing energy saving initiatives at most energy using sector. In most cases, the bigger the investment, the more significant savings can be achieved that will make everyone involved in the process satisfied with their involvement in the initiatives that give benefits to the organization.

However, getting the approval to make the big investment is often not an easy task and process too and can resulted in ignoring initiatives that will smaller results, less costly and sometime no costs involved at all but much more practical, achievable  in shorter period and also sustainable.

This zero or less costly  initiative is a part of the bigger term called energy management and in easier definition, actions that we can take within our existing tasks in to day operations related to energy consumption that will help us to reduce energy consumption without affecting the output of the operation.

There are many successful stories where various energy using facilities did or investing in big projects involving retrofits or application of newest energy efficient technologies with big money involved too. At the same time, we can also achieve greater energy efficiency in energy performances with small budget and certainty through small improvements in daily operations.

What can be done?

Here, I would like to share some tips from my personal experiences and some reading at online materials  as energy efficiency industry practitioner for more than 15 years about implementing energy saving initiatives where no or minimal costs are involved which are the need to:

i)   Understand the energy efficiency facts of all or at least energy using equipment or system.

The energy consumption of different types of equipment can vary if we compare the actual performances against the manufacturer’s specifications or other independent energy performance ratings or standards. By knowing some basic specification related to the efficiency of our equipment, it will give us some ideas on what equipment require some proper monitoring and controls of its operation and why we  should consider energy efficiency features for future replacement of the equipment although the initial costs is generally  higher compare to standard products.

ii)  Measure energy consumption for energy using equipment/areas with permanent sub-meters.

The measurements of energy data has been proven effective in leading to produce energy cost reduction provided it is properly planned and implemented. We need to know how much electricity we use at our facilities and how much energy being used for each energy using system or equipment such as air conditioning and/or heating systems, compressed air system and lighting. The accurate information on specific energy consumption by each major equipment   will help us to focus on energy saving initiatives   and any improvement on energy to these biggest users will be most likely to give more significant results in energy cost savings. With budget constraint, the installation of sub-meters is recommended to be carried out reasonable time frame and gradually covered identified areas or equipment in stages.

iii)    Monitor the actual energy consumption trends based on real-time data gathering from sub-meters.

The gathering and analyzing of energy consumption trends and status of based real time data will enable us to make immediate decisions to prevent possible more energy waste. This often occurred when recorded  data to be checked only when waste identified after the data collected and analysed by the end of the month or week or when the equipment have operational problems. When we  can monitor our  equipment to see if it is performing optimally, we will be able  can do a much better job of providing preventive maintenance  and  may also predict a pending failure.

iv)    Benchmark energy use across the operations and to understand the effects of energy market trends.

The energy consumption data gathered from all major equipment will be useful for benchmarking  purposes  for equipment with similar characteristics that will make us better prepared to evaluate the likely effects of new equipment or processes.

We also need to be well aware of national trends in energy supply and demand. If we have been notified that the cost of electricity is likely to increase soon, it may be an important consideration as we plan what types of improvement or new technologies to be used to minimize energy wastage that will keep the cost of production to be affected at a very minimal.

v)      Understand the effects of operation and maintenance activities to energy cost for equipment.

The operation and maintenance of major energy using equipment has a huge effect on energy consumption and the rising energy consumption for every of equipment may indicate the need for maintenance. Therefore, it is important to link the data on real-time energy consumption to the maintenance records which the data will help us to see correlations that may provide opportunities to reduce energy and maintenance costs.

vi)       Use historical energy consumption data to plan and reduce future energy needs.

If the historical energy consumption data on monthly or yearly basis and analyzed, we can identify anomalies that may present opportunities for further efficiency. The data on past energy use can be used to identify anomalies in current consumption, which may present opportunities for improvement.

Challenges in the current scenario

In the wake of current energy market trends in Malaysia where the rationalization of energy subsidies has started and will continue gradually in the way forward, any price increase will definitely will hit all SMEs and SMIs in different ways financially. Petrol and diesel subsidies reduction already started recently and subsidies to gas and coal to be revised and expected to be followed by electricity tariff increase by early next year.

The increase of energy price for fuel for transportation and operations such as petrol, diesel and gas and the soon to be increased electricity tariff is something that everyone has to deal with but the way everyone has to deal with also need different type of support mechanisms.

Unlike multinational or big companies which has the resources and capacity internally or appoint external parties,  SMEs and SMIs do need  the assistance in technical and advisory  for them to identify and implement energy saving initiatives and then to sustain their energy efficient operations in a long term.

With SMEs & SMIs represent  about  99.2% of total business establishments in Malaysia that  provide employment for about 56% of the total workforce based on 2010 report, they have been and will always be the  important source of growth for the nation in. They will play a major role in Malaysia’s new economic model to transform Malaysia from a middle-income economy to a high-income economy.

What is needed?

There have been several financial assistance available for SMEs and SMIs that can be utilized with regard to improve energy performance for their facilities in the use of more energy efficient technologies and also for  human capacity buildings such as the RM200 million for Tabung Kumpulan Usaha Niaga (TEKUN), RM1.5 billion in soft loans for companies employing green technology and RM3.5 billion for basic infrastructure and amenities as well as training programs and socio economic programs to spur growth of economic corridors. However, the extent of utilization of these funds in relation to energy efficiency that will reduce their energy cost is unknown.

However, more is needed in term of the accountability of which entity will be responsible to assist and facilitate facilities operated by SMEs and SMIs technically to reduce energy costs through energy performance improvement. SMEs and SMEs require ongoing supports and guidance especially at the early stage of energy management which is to identify the potential energy saving measures, then to kick-off the implementation and later to monitor and improve their energy performance.

At present condition, the industrial energy users and energy efficiency industry players have been given run a round by the government with no clear or dedicated agency entrusted to perform the much needed assistance and guidance. What is so puzzling now, under the same ministry, there are several agencies carrying out various energy efficiency initiative namely Energy Commission, Malaysia Green Technology Corporation and SEDA Malaysia.

To make thing more confusing to the market, energy users and industry players are also often referred to other agencies or entities with regard to some procedures or processes related to energy efficiency project implementation at government or private facilities. To certain extent, some of these agencies and entities are competing with industry players to capture some shares for the same services in market despite their roles that are suppose to create and assist the industry to grow. This has created uneven playing field between them and industry players where some of these agencies and entities are funded through grants or other financial assistance under the government budget.

The results of all these fragmented approaches with almost no one centre that can be called one stop , energy users have to spend so much time and efforts just to seek answers to their queries or assistance to their applications which is clearly will be counter productive to their businesses where every minute is a cost to them.

When all these will stop?

I guess only the responsible ministry for energy could answer that and to do what are necessary to meet the plight of these SMIs and SMIs especially. Where energy costs appear likely to continue rising and energy use so central to the health of many businesses, rising energy costs will definitely pose more significant risks to SME and SMIs.

We can mitigate some of these risks by planning now to increase our energy efficiency in the coming years but we need every party to play their roles because the efficient management of energy is a system and system will subsequently fail if some of key components are not functioning. In energy efficiency, government is one of the key components in the system which is now in a malfunction mode.