Proposal to Allocate Regulatory Powers to the Energy Commission in relation to the Import and Export of Electricity Outside the Borders of Malaysia

1. The Energy Commission of Malaysia ("EC") has recently issued a public consultation paper (in Bahasa Malaysia) to collect feedback from the public to be used as a basis of consideration by the Ministry of Natural Resources, Environment and Climate Change to propose regulations for off-border electricity exportation and importation activities (the "Import and Export of Electricity").

2. In brief, the public consultation paper highlights the absence of regulatory authority under the written law to regulate the Import and Export of Electricity which can have some serious implications, including:

1. negatively impacting the market price of electricity in Malaysia;
2. threatening the safety and stability of the national grid; and
3. causing a shortage of supply of electricity and renewable energy in Malaysia.

3. To address the lacuna, amendments to the Electricity Supply Act 1990 and the Energy Commission Act 2001 are being proposed, which are intended to be implemented through drafting of the Electricity Supply (Amendment) Bill 2023 and the Energy Commission (Amendment) Bill 2023 (hereinafter known as the "Proposed Amendments").

4. The essence of the Proposed Amendments are as of below:

1. to insert new clauses relating to the Import and Export of Electricity;
2. to clarify the functions and duties of the EC in respect to the Import and Export of Electricity; and
3. to provide clear authority for the EC to issue guidelines to regulate the Import and Export of Electricity and to provide for offences for any violation of the guidelines.

5. The Proposed Amendments are essential to enable the Government to control and monitor the number of industry players involved in the Import and Export of Electricity and to ensure that the use of national grid in the process will not affect the stability and quality of electric supply in Malaysia.

Public Feedback

6. In furtherance to the above, the EC has posed the following questions for feedback in the public consultation paper:

1. In your view, what are the effective methods to regulate the Import and Export of Electricity that are being carried out by the industry players?
2. What is the method to ensure the Import and Export of Electricity does not affect the supply of electricity in the country?
3. Should the Import and Export of Electricity be carried out in accordance to the methods self-determined by the industry players?
4. Should the price for sale and purchase of electricity be self-determined by industry players without the Government's intervention and based on market price? 
5. Should electricity generated in Malaysia be exported abroad or imported into the country without the control or supervision of any party, especially the Government?
6. Should regulations be established for the purpose of regulating industry players who wish to participate in the Import and Export of Electricity?
7. Is licensing the best method to regulate industry players who wish to participate in the Import and Export of Electricity?
8. Is the involvement of the Government in determining the mechanism of exportation and importation of electricity perceived as the best measure to regulate the said activity for the purpose of providing assurance to the safety and stability of the electricity grid in Malaysia?
9. What, if any, are the steps of improvement or other initiatives that can be implemented to ensure that the Import and Export of Electricity is well regulated? Please provide any examples or suggestions.
10. In your view, is the energy industry in Malaysia, especially the electricity industry and the existing infrastructure, ready and capable to execute and/or carry out the Import and Export of Electricity effectively? Why?

The EC will continue to accept feedback on the public consultation paper on or before 5:00pm, 31 May 2023 via email to urkuu@st.gov.my. Given the significant impact of the Proposed Amendments, stakeholders who will be impacted by the Proposed Amendments as well as industry players who are interested to participate in the Import and Export of Electricity should contribute to the feedback so that a proper and robust regulation that is beneficial to everyone can be developed.  

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Source: Public Consultation Paper, "Proposal to Allocate Regulatory Powers to the Energy Commission in relation to the Import and Export of Electricity Outside the Borders of Malaysia Under the Electricity Supply Act [Act 447] and the Energy Commission Act [Act 610]", 17 May 2023

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