KUALA LUMPUR: Malaysian Industrial Development Finance Research Bhd (MIDF) has maintained a positive outlook on the power sector this year, following a reform plan and a few projects announced by the government.
In a note yesterday, MIDF said the Malaysian Electricity Supply Industry (MESI) Reform Plan, which is expected to be finalised in second quarter of 2019, would increase industry efficiency, reduce government intervention, adopt more cost-reflective and time-based tariff, embrace new technologies, and empower consumers.
The research house said in the near future, sector opportunities could tilt heavily towards renewable energy (RE) project awards and face a dearth of future fossil fuel plants.
“The government is of the view that the country has already attained abundant reserve capacity of 30 percent, much higher than most countries.
“This inflates the sector’s cost (as the non-utilised independent power producers still need to be paid capacity payments) which, in turn, is passed on to consumers’ via electricity tariffs,” it said.
MIDF said the abundance of reserve capacity would give the industry a decent time to build up RE capacity within the next three to seven years, without the need for much more major new plant-ups system in the near-term. – Bernama
