Kota Kinabalu: Sabah Electricity Sdn Bhd (SESB) Chairman Datuk Seri Wilfred Madius Tangau said steps are being taken to ensure the firm is ready to become a full-fledged utility company that does not rely on subsidies by 2030.
His comments came in reaction to the Malaysia Madani Budget 2024 announced by Prime Minister Datuk Seri Anwar Ibrahim regarding subsidy to SESB.
Anwar was quoted as saying that, while regulatory authority has been transferred to the state government, the federal government will continue to assist the state government in strengthening the Sabah electricity industry by providing subsidies to Sabah Electricity Sdn Bhd (SESB) until the SESB Transformation Plan is successfully implemented by 2030.
“What the Prime Minister announced is exactly what SESB has planned. It is also what the government has planned through the Energy Commission,” Madius said Saturday after officiating at the ground breaking ceremony for SESB’s Darau 33/11KV Main Substation in Inanam.
He said SESB is already taking steps to ensure that it is ready to become a fully-fledged utility company that does not rely on subsidies by 2030.
“In order to do so, SESB must improve its generation ownership even further. We currently have only about 20 percent of the generation.
The others were provided by Independent Power Producers (IPP) with SESB acting as a middleman.
“At the moment, we do not have complete control over generation costs. As such, the main key in this regard is tariff. We’re moving in that direction,” he said.
When asked if this would result in a tariff hike, he said, “No.”
“When SESB was privatised from the Sabah Electricity Board in 1998, the tariff arrangement was agreed upon.
“Because SESB is now privatised, the government owns it completely, but it operates privately.
This means we get no government funding for our operations.
“Since we are not included in the government budget, we have to find our own finances through the business of supplying electricity,” he added.
He said the tariff had only increased twice since 1998, when it was 25 sen.
“Our tariff is now 34 sen, a 10 sen increase after more than 20 years. This is the money we utilise to ensure the long-term viability of SESB operations.
However, it is insufficient because the cost of generation is enormous.
“If we stick to the tariff schedule, we’re already at 47 sen. But we are still at 34 sen since we understand the people’s plight.
This is what we want to talk about with the public, consumers, the utilities, and the government. At the end of the day, the government makes the decision, not SESB,” he said.
He added that SESB is actively campaigning for more control over electricity supply by January 2024 under the direct governance of the Sabah government via the regulatory mechanism of the Energy Commission of Sabah (ECoS), which aligns with the vision of a more empowered Sabah.
“The Sabah Electricity Supply Act will be tabled in the State Legislative Assembly. The Electricity Supply Act, which is currently in use across Malaysia, would no longer be used in Sabah after January,” he said of the collaboration between SESB and ECoS.
In terms of solar hybrid solar power generation, Madius said there are plans for renewable energy development, but there are constraints.
“Renewable energy transition is one of the paths we are taking. It means that we are on our way to achieving net-zero emissions.
We’re all aiming for net-zero emissions by 2050,” Madius said.
“Our challenge, though, is the intermittent nature of the energy. That is, the solar energy that creates power comes from God.
There will be no solar, and consequently no electricity, if there are clouds. So our challenge is to ensure that we have consistent solar generation.
“One possibility is to attach a battery. However, the battery is too pricey. “If we install it, the cost is passed on to the consumers,” he said.
He said SESB now has 200 megawatts of solar capacity, indicating that solar power is not new to SESB.
