TNB inks US$3b coal import deal with Indonesia

MELAKA (May 31): Tenaga Nasional Bhd (TNB) has inked a coal import agreement with Indonesia’s coal exporters, involving imports worth US$3 billion (about RM13.14 billion) for three years.

Energy and Natural Resources Minister Datuk Seri Takiyuddin Hassan said the agreement is aimed at ensuring sufficient coal supply, so that TNB’s electricity supply to the country is not disrupted.

He said the contract value had increased from US$2.3 billion last year due to a sharp increase in the price of coal.

“In January this year, the Indonesian government announced the temporary suspension of coal exports to meet its domestic demand, but about 65% of TNB’s coal requirement is imported from Indonesia.

“Last week, TNB’s top management and I went to Indonesia to meet with the coal exporters and signed an agreement to import coal from there for the next three years because we have good relations with them,” he said.

He told reporters this after the opening ceremony of TNB’s Melaka Tower, held at the Ayer Keroh International Trade Centre here on Tuesday (May 31).

The event was officiated by Yang di-Pertua Negeri Melaka Tun Mohd Ali Rustam. Also present was Melaka Chief Minister Datuk Seri Sulaiman Md Ali.

Takiyuddin said apart from Indonesia, TNB also imports coal from other countries such as Russia and South Africa but in a much smaller amount.

He said in an effort to reduce the country’s dependence on coal to generate electricity, TNB is gradually transitioning to incorporate renewable energy such as solar and hydro as well as exploring the use of hydrogen for the same purpose.

“So this is part of TNB’s action plan to ensure that our country's electricity supply is stable, reliable, affordable and does not burden the people.

“So far, electricity consumers in our country enjoy a fairly stable billing because the government still provides a rebate of two sen per kilowatt-hour, while some countries would apply a surcharge," he said.

Earlier in his speech, Takiyuddin said TNB's continuous efforts to modernise the national grid had been successful as the country's System Average Interruption Duration Index was reduced from 150 minutes in 2002 to 45.25 minutes in 2021.

He said these improvements had made Malaysia's electricity grid one of the best in the region, putting TNB on a par with utility providers in developed countries, adding that the achievement was underpinned by high generation reserve margins and a reliable grid system.

“This transmission network also enables efficient energy supply to all load centres and further reduces the risk of blackouts," he said.