Tenaga chief says nuclear energy option as coal price spikes up

Tenaga chief says nuclear energy option as coal price spikes up
Written by Bernama
Saturday, 15 January 2011 20:31

KUALA LUMPUR: The recent flooding catastrophe in Australia that pushed up the coal price, further justifies the need for Malaysia to seriously consider nuclear power to generate electricity, TENAGA NASIONAL BHD [] (TNB)president and chief executive officer, Datuk Seri Che Khalib Mohamad Noh said.

"Due to the shortage of gas in the country, we have diversified our electricity generation to include coal. Now that there is bad whether in Australia and Kalimantan, as well as severe cold in the Northern hemisphere, the demand for coal, has suddenly shot up but supply is limited.

"There is also a lot of expansion of coal plants elsewhere and all this has combined to cause coal price to spike up by more than 50% over the last six months," he said on Satursday, Jan 15.

Coal accounts for 40% of Tenaga's power generation source.

AmResearch in its recent report said, based on the current price that is hovering above US$100 per tonne and the US/RM exchange rate, Tenaga's net profit for financial years 2011 to 2013, could drop by between 28% to 29%.

Tenaga purchased 17% of its annual coal requirement of 18 million tonnes in financial year 2010 from Australia, 71% from Indonesia and 11% from South Africa, said the research house.

Coal accounted for 48% of Tenaga's 2010 financial year fuel cost.

"We estimate that a US$10 increase per tonne in coal costs above our average coal cost projection, could shave Tenaga's 2011 financial net profit by 18%," it explained.

Hence, Che Khalib said, it is timely for the government to seriously look into generating electricty from nuclear power.

"The safety measures, record and TECHNOLOGY [] for nuclear power plants today are far better than that 30 years ago," he added.

He also said that, as the country’s largest power producer, TNB supports the government’s initiative to establish the Nuclear Power Corporation, as the country can now seriously look into an alternative avenue.

"It is not that we are forcing the country to accept the alternative but we seriously need to look at it and if suitable, be implemented as soon as possible," said Che Khalib.

He also said TNB as an utility company has an interest in supporting the government as the plan is to have the first nuclear plant by year 2021.

"TNB wants secure power generation within the next 10 years and it has to have nuclear power as part of the mix," he added. - Bernama