The new BMI Malaysia Power Report forecasts that the country will account for 1.32% of Asia Pacific regional power generation by 2013, with a broadly balanced domestic market. The Asia Pacific power generation assumption for 2008 is 7,116 terawatt hours (TWh), an increase of 3.2% 2007. We are forecasting an increase in regional generation to 9,149TWh by 2013, representing a rise of 28.6%.

Thermal power generation in 2008 totalled an estimated 5,590TWh, accounting for 78.6% of the total electricity supplied in the Asia Pacific region. Our forecast for 2013 is 7,046TWh, implying 26.0% growth that reduces the market share of thermal generation to 77.0%. This is thanks largely to environmental concerns promoting renewable sources, hydro-electricity and nuclear generation.

Malaysia’s thermal generation in 2008 was 94TWh, or 1.68% of the regional total. By 2013, the country is expected to account for 1.59% of thermal generation.

For Malaysia, gas is the dominant fuel, accounting for 49.3% of 2008 primary energy demand (PED), followed by oil at 39.0%, coal at 9.0% and hydro with a 2.7% share of PED. Regional energy demand is forecast to reach 4,862mn tonnes of oil equivalent (toe) by 2013, representing 25.1% growth from the 2008 level. Malaysia’s 2008 market share of 1.44% is set to fall to 1.32% by 2013. Malaysia’s 6.8TWh of hydro demand in 2008 is forecast to reach 8.6TWh by 2013, with its share of the Asia Pacific hydro market falling from 0.76% to 0.63% over the period. There is no nuclear industry in Malaysia.

Malaysia is ranked equal seventh with the Philippines in the enlarged and updated Power Business Environment rating, thanks to its low level of energy import dependence and excellent power consumption growth prospects. Certain country risk factors offset some of the industry strength, but the country is in a good position in the near term to keep clear of Thailand below.

The report is now forecasting Malaysian real GDP growth averaging 2.6% per annum (pa) between 2009 and 2013, with a decline of 3.4% expected in 2009. Population is expected to expand from 27.0mn to 29.2mn over the period, with GDP per capita and electricity consumption per capita forecast to increase 33% and 5% respectively. The country’s power consumption is expected to increase from an estimated 106TWh in 2008 to 120TWh by the end of the forecast period, wiping out any theoretical generation surplus, assuming 2.5% average annual growth in electricity generation.

Between 2008 and 2018, we are forecasting an increase in Malaysian electricity generation of 35.9%, which is mid-range for the Asia Pacific region. This equates to 19.3% in the 2013-2018 period, up from 13.9% in 2008-2013. PED growth is set to ease from 14.3% in 2008-2013 to 14.0%, representing 30.3% for the entire forecast period. An increase of 81.6% in hydro-power use during 2008-2018 is a key element of generation growth. Thermal power generation is forecast to rise by 40.1% between 2008 and 2018. More details of the long-term power forecasts can be found later in this report.