Sabah Electricity Sdn Bhd (Sabah Electricity) has requested support in financing from the Malaysian federal government in efforts to ensure a sustainable power supply, as the risk of a statewide blackout might occur in the state starting January 2025.
“Imagine what would happen to security forces, the medical and healthcare system, airport operations, water supply, telecommunications, transportation systems and the entire government service network without electricity,” said Sabah Electricity chairman Datuk Seri Wilfred Madius Tangau, who is also the Tuaran MP and Upko honorary president.
He said that Sabah’s electricity tariff has remained at a subsidised rate of 34.52 sen per kilowatt-hour (kWh) since 2014, despite the rising cost of generating and purchasing power.
Meanwhile, Sabah Electricity currently produces only 20% of the state’s power and buys the remaining 80% from independent power producers (IPPs) at an average cost of 43 sen per kWh.
According to Tangau, the federal government’s fuel and tariff support subsidies covered the cost difference to ensure a sustainable power supply with a loss of about 10 sen per unit electricity.
“However, this year, the difference in cost has grown bigger as Sabah Electricity as to spend more to purchase diesel to generate power.
“This is an immediate alternative to delays in the commissioning a few generation plants to come on stream, particularly the 66 megawatt (MW) Tenom Pangi Hydro, which was affected by a landslide and mudflow in October 2022,” he said in a statement, adding that implications of a total blackout doesn’t just go beyond energy security, but it also threatens national security.
He highlighted that under the incentive-based regulation regime, any gap in cost was to be recovered from the consumer or the government by way of subsidy.
“I was made to understand that the Sabah government has sent an appeal letter to the federal government,” he said, adding that Sabah Electricity will also be sending a similar appeal letter to the Finance Ministry as the company’s cash flow is running into a deficit and without immediate support, it will not have the financial capability to pay the IPPs and fuel suppliers.
“Then the fuel supply to the power plant will be blocked and the entire system will collapse,” he warned.
Tangau also pointed out that a prolonged outage would cripple essential services, potentially grounding airport operations, interrupting hospital care and disrupting water treatment facilities, impacting every level of society in Sabah.
Integrating biomethane into Labuan’s O&G sector can help Malaysia’s ESG goals
Meanwhile, recent reports have shown that biomethane have been seen as a promising alternative fuel in Malaysia’s oil and gas (O&G) sector, underscoring the nation’s commitment to environmental sustainability.
Deputy Plantation Commodities Minister Datuk Chan Foong Hin emphasised that biomethane could play a pivotal role in helping Malaysia achieve its environmental, social and governance (ESG) goals by curbing carbon emissions within the energy industry.
“ESG has become a top priority for the country as we aim to balance economic development with environmental responsibility,” he said.
Chan highlighted that biomethane is a clean renewable resource that when integrated into Labuan’s oil and gas sector, could help reduce Malaysia’s carbon footprint while supporting sustainable energy initiatives.
“In Labuan, the island known for its oil and gas operations, introducing biomethane could address both energy needs and environmental concerns,” he added.
According to the deputy minister, biomethane burns cleaner than fossil fuels, releasing fewer pollutants and greenhouse gases, which aligns with the global shift towards cleaner energy.
As other countries worldwide adopt renewable policies, Chan believes that Labuan – with its strategic position in Malaysia’s energy landscape, could lead the way in transitioning to greener alternatives.
He said Labuan’s exploration of biomethane marks a forward-looking step in Malaysia’s sustainable energy journey and dedication to lowering carbon emissions.
“As the global energy sector evolves, Labuan could set an example for other Malaysian regions – and potentially beyond – in advancing ESG-compliant energy solutions,” he said.
