Serba Dinamik Annual Report 2019

107 We also operate within the power generation industry, especially in Malaysia and most recently in Laos. As such, our business is, to a certain degree, driven by developments in the power generation industry in these countries. GLOBAL Power generation activities generally involves equipment and/or facilities which require maintenance services. As such, a positive outlook on the installed power generating capacity is likely to drive demand for power generation plant maintenance services, thus benefiting our business. Between 2018 and 2030, total installed power generating capacity of the Asia regions, Middle East and global market are forecasted to grow at a CAGR of 3.7%, 3.0%, and 2.6% respectively. MALAYSIA We are involved in the power generation industry inMalaysia through our acquisition of minority interest in several small hydropower plants in Sabah, as well as in a biogas power plant company. Therefore, any positive demand and outlook of the power generation industry, most particularly renewable energy in Malaysia would be in our favour. Electricity generation in Malaysia grew in line with consumption level and is sufficient to cater to local electricity demand. Electricity consumed in Malaysia is locally generated and do not rely on import from other countries. Between 2015 and 2019, electricity generation and consumptiongrewwithaCAGRof 4.4%and4.2%respectively (Figure 4-20) . As at 2019, electricity generation stood at 167.5 Terawatt hours ("TWh"), exceeding total consumption by approximately 17.8 TWh. According to the Energy Commission Malaysia, demand for electricity is projected to grow by 1.8% per annum between 2020 to 2030. Over the same period, 9,321 megawatt ("MW") of additional capacity is required to meet demand growth, replacing retiring plants and ensuring system reliability, with the electricity reserve margin projected to reach below 25% by 2030. Based on the approved Generation Development Plan (2020-2030), power generation plants with total capacity of 11,610 MW will retire, whereas new power generation plants (combined cycle gas turbine, open cycle gas turbine and renewable energy) with total capacity of 17,732 MW will come on stream by 2030. DEVELOPMENT OF THE POWER INDUSTRY INMALAYSIA The power industry in Malaysia is shifting towards liberalisation phase to encourage participation from the private sector. Deregulation of the power industry began with the permission of independent power producers ("IPP") to cater to the growing power demand through entering a Power Purchase Agreement ("PPA") with the utility companies including Tenaga Nasional Berhad ("TNB"), Sabah Electricity Sdn Bhd ("SESB") and Sarawak Electricity Berhad ("SEB"). The PPA allows IPPs to sell electricity generated to utility companies at an agreed rate throughout the agreed period. Malaysia Electricity Supply Industry 2.0 ("MESI 2.0") masterplan launched in 2019 promoted renewable energy as well as liberalisation of the power sector. The plan to introduce non-government participants in the power industry included, among others, peer-to-peer ("P2P") trading which allow third party access to the power grid for trading of renewable energy to any power consumers. The Budget 2020 also liberalises the electricity market by shifting from the current power purchase system to an open market system. (Source: Department of Statistics, Malaysia) Figure 4-20: Electricity Generation and Consumption in Malaysia 0 4 4 . 5 P OWE R G E N E R A T I O N I N D U S T R Y C H A P T E R Terawatt Hours (TWh) 2019 2018 2015 2016 2017 Electric Generation Electric Consumption 149.8 141.5 127.1 137.9 146.3 167.5 156.0 141.1 152.5 162.0