Energy is a key driver for economic growth, constituting about 20% of the Gross Domestic Product (GDP). In 2010, the total primary energy supply was 3127.7 petajoules. The main energy sources of commercial energy supply were crude oil, which accounted 44.7% and natural gas which accounted 41.6%. These sources remain major ones. However, the share of coal and coke increased from 9.1% in 2005 to 11.2 % in these years and only 2.5% came from the non-fossil source of hydro power in 2010.
From the statistics, it shown that there were a slightly fall for the average annual growth rate (%) of crude oil from 3.6% to 3.5%, and coal from 17.2% to 8.8%. Nonetheless, there were and increased in the natural gas from 4.3% to 4.5 % as well as the hydro from 1.7% to 1.8% (Ninth Malaysia Plan, 2005-2010).
The demand for electricity in Malaysia is growing tandem with GDP growth. In terms of demand in 2010, 41.1% was for transportation, 38.8% for industrial purposes and 12.8% for residential use, and the non-energy and agriculture were accounted 6.5% and 0.8% respectively. By 2010, the average demand in all sectors showing an increase from 5.6% to 6.3%. According to Tenaga Berhad, the forecasted growth for electricity has shown an increases of 3.7% in 2012 compared to 3.1% in 2011 (KeTTHA, 2012).
This growth has been driven by strong demand from the commercial and domestic sectors. For the period till 2020, the average projected demand for the electricity is expected to grow 3.1% (KeTTHA, 2012). Based on this forecast, in order to grow towards a high income economy, Malaysia is going to need even more energy to strive towards its goal. By 2010, an estimated 10.8 gigawatts of new generation capacity will be needed given that 7.7 gigawatts of existing capacity are due to retirement. By 2020, there will be an increase of 16% over the total installed capacity in 2012(KeTTHA, 2012).
In terms of energy security, the 10th Malaysia Plan outlines...