The Future of Utility driving Malaysia’s Industry 4.0

As urbanisation and industrialisation in ASEAN increases, the region’s energy demand is expected to grow by more than 67% by 2040, according to the International Energy Agency (IEA), where almost 80% is supplied by fossil fuels. Of which, electricity demand in ASEAN is forecasted to grow by 250%, In 2016, the IEA estimated that around $2.5 trillion of investment is needed to supply ASEAN’s forecasted energy demand between then and 2040. The power sector takes up approximately half of the amount, while the remaining is split between fuel supply and energy efficiency.

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. 

At Asia IoT Business Platform (AIBP) Malaysia in 2019, we had the opportunity to host a panel of leaders within the industry including Energy Commission (ST), Tenaga Nasional Berhad (TNB), Gas Malaysia, Sarawak Energy. 

The panel noted that there is much room to grow in Malaysia in terms of obtaining the benefits of better energy efficiency with electrification, and agreed on three key aims for utility firms to prepare for the future:

  1. Security and reliability of energy 
  2. Affordability of energy (equilibrium supply and demand)
  3. Environmental sustainability

Being the biggest power utility company in peninsular Malaysia, providing energy services such as electrical generation and supply as well as operating transmission grids, TNB has expressed commitments to ensure a more reliable and efficient supply network for consumers and aims to be among the top 10 utility firms globally by 2025. The utility firm has secured US$4.54 billion in funding to upgrade its transmission grids and supply infrastructure up till 2020.

Smart Grid

Of the US$4.54 billion, US$650 million will be invested in smart grid technologies to achieve what TNB claims as the “grid of the future”. Their vision is for a smart and automated grid which will increase the reliability and efficiency of its transmissions to meet growing demands. The company also plans to deploy a total of 1.54 million smart meters throughout the Melaka and Klang Valley region with investments in advanced metering infrastructure and grid automation to support the integration of smart features into the company’s operations.

The company is also installing a network of EV charging stations throughout the country. In 2018, TNB installed 1000 stations and aims to add another 2000 more by the end of 2019. The project is in response to rising interest as well as demands from vehicle owners. Malaysia expects EV to be more popular in the next few years with car manufacturing giant, BMW, reporting increasing sales from their new hybrid car series in 2018. The project is being implemented by a tripartite alliance between Petronas Dagangan Bhd, GreenTech Malaysia and TNB.

Renewable & Sustainability

As disconnected sources of energy such as solar panels are gaining popularity in Malaysia owing to the abundance of land and as a more reliable source of electricity compared to grid transmission in the rural areas, TNB is looking at adopting blockchain as one of the methods to deal with disruptions to the traditional energy distribution and generation industry, by providing secured online platforms for consumers with excess production to sell energy to other consumers in their vicinity. Using blockchain technology, TNB aims to drive competition and encourage faster adoption of renewable energy. The open ledger system gives a transparent view of the energy generation methods, providers and allows consumers to choose their preferred sources.

Consumers moving online

Since the enforcement of Movement Control Order (MCO) in Malaysia, newly registered accounts on myTNB, TNB’s online portal and mobile application, doubled as customers stay home for their various TNB- related transactions. Physical meter reading and delivery of its bills to premises has been suspended and at the same time, the company plans to expand the installation of smart meters nationwide with a target of 1.2 million units in the Klang Valley following its success in fitting 340,000 units in Melaka.

In East Malaysia, Sarawak Energy also embarked on enterprise-modernisation initiatives to achieve more efficient and cost-effective work processes as part of their digitalisation of its power generation, transmission, distribution and retail network. This included the introduction of integrated payrolls through the Sarawak Energy People System (SEPS) and systematic contract and procurement processes through Sarawak Energy e-Procurement (SEPRO) in 2019.

Securing Critical Infrastructure

As utilities digitally transform themselves to increase efficiency, deliver better service to their customers and enable new use cases, they also need to ensure that they are delivering robust security. As the future becomes increasingly digital, and the number of connections (smart meters and microgrids) increase, utilities need to ensure that the confidentiality, integrity or availability of their services and network are not disrupted, as such events will prove to be extremely costly (monetary and reputation). 

Digital transformation might result in utilities choosing increasingly complex technology solutions and if they choose to manage their technology infrastructure in house, they would need to ensure that their solution can securely develop, manage, provision and connect devices from the chip to the cloud. 

Alternatively, they can consider outsourcing part of their instructure utilising a managed services delivery model, to help diversify risks, minimize costs and make their business processes more flexible, while maintaining service delivery to their end customers.

Preparing Malaysia for Industry 4.0

Beyond utilities, we are seeing manufacturing plants, industrial firms leveraging similar technologies for operational efficiencies and remote workforce management, especially today where safe distancing measures are imposed. It is important for utility and industrial companies to have a reliable network, managing nationwide assets in scale. We look forward to hearing from local industry stakeholders on their upcoming plans and experiences navigating this period at the upcoming AIBP Insights focus group on October 5. For more information, download brochure here.

Asia IoT Business Platform

28 August 2020

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