Kota Kinabalu: The Energy Commission of Sabah (ECoS) aims to position Sabah at the forefront of Ocean Thermal Energy Conversion (OTEC) technology in Malaysia while working towards a sustainable and green energy future.
“Three local companies have been selected to conduct feasibility studies over the next two years,” said ECoS Chief Executive Officer Datuk Abdul Nasser Abdul Wahid providing an update on OTEC.
“These studies are expected to pave the way for a small-scale pilot project before advancing to full commercial operations,” he said this after the launching ceremony of the ECos Energy Information System (EEISY) and Talk2ECoS web application held at the Hyatt Centric Hotel, here, Wednesday.
The ceremony was officiated by ECoS Chairman Datuk Seri Dr Maximus Ongkili.
SPONSORED CONTENT Sinyi Group Founder, Chou Chun-Chi, Wins 2024 Asia Pacific Enterprise Award and Expands Sustainable Tourism Ventures in Sabah, Malaysia Kota Kinabalu: The 2024 Asia Pacific Enterprise Awards, hosted by Enterprise Asia, aims to recognize the most outstanding business leaders and organizations in the Asia-Pacific region. Read more For the record, the OTEC Enactment 2024 was approved by the State Legislative Assembly in April and ECoS has been tasked with regulating OTEC activities.
“OTEC is basically technology of utilising the vast ocean that we have surrounding Sabah via the hot surface of the sea water and cold deep water and turn that into electricity through scientific means,” said Nasser.
“We recently in the Sabah Energy Council meeting headed by our Chief Minister, we have forwarded three local companies to conduct a feasibility study and upon successful completion of the feasibility study, which is given about two years for them to do there will be a subsequent decision on award of concession,” he said.
Nasser said the primary area of focus for OTEC development lies near Tawau and Semporna, some 30 kilometres offshore.
“This location was chosen for its proximity to shore and favourable conditions for OTEC implementation,” he said, adding that this will be the first in Malaysia.
He said based on a marine study by Universiti Teknologi Malaysia, Sabah has potential in this field with an estimated OTEC potential of 20,000 megawatts, the highest in Malaysia.
The project timeline aims for exploration and development to kick off within five years.
“OTEC is actually a source of energy for the future of Sabah. At the moment, for the current source of energy, we have sufficient source of energy through natural gas, through hydro, solar and all that. This (OTEC) is already in our plan. Within 10 years horizon, it is already sufficient to drive Sabah for the current need and the future needs.
“This is also to be aligned with the State Industrialisation Agenda, where energy will be even more than what it used to be now. This is our future endeavour and that will be updated from time to time.
Nasser said while OTEC’s initial costs may be high for direct electricity supply, the technology shows promise for producing green hydrogen as a premium product.
He said this approach could make the business case more viable and potentially lead to hydrogen exports or domestic use.
On the funding for OTEC, he provided a rough cost estimate, suggesting that a 100-megawatt OTEC plant could cost about twice as much as a hydroelectric plant of similar capacity.
“If it is a 100-megawatt gas power plant it will probably cost RM1 billion plus and if it is hydro it will cost twice of that, probably between RM2 – RM3 billion.
“If it is OTEC, it will be double of the hydro. So, definitely it is more expensive than hydro, but the hydro is for selling electricity at a cheap rate, while OTEC is selling premium product, green hydrogen. It is a different business case. So, even though it is expensive for now, but it is meant to sell expensive product,” he said.
Despite the high initial investment, the focus on premium products like green hydrogen is expected to make the project economically viable.
He also noted growing international interest in Sabah’s OTEC potential with companies from Australia and the UK already presenting proposals.
On another matter, he reassured the public that there is no immediate plans for electricity tariff rate hikes.
However, he indicated that future cost corrections may be necessary to align production and supply costs with consumer tariffs.
The timeline for these adjustments remains fluid, pending thorough assessment and approval from the Sabah Government.
“Electricity tariff is definitely something that we need to get approval from the Sabah Government and all that. And due diligence on assessment, when to do it. At the moment, there is no plan to increase tariff.
“There is a plan in the future to eventually have subsidy rationalisation in place. But the actual date and when is not being determined yet. But definitely, there will be cost correction as we call it.
“Cost correction in terms of cost of producing and supplying electricity versus the actual selling tariff to the consumer. That will be basically based on further assessment. We will announce it when it happens. But definitely, there will be possible potential things that will happen in the future,” he said.
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