Published on: Tuesday, July 30, 2024
By: Mohd Izham Bin Hashim
Harun commended the passing of the Otec Bill which reflected the State Government’s commitment towards renewable energy and sustainability, and awareness towards energy transition.
KOTA KINABALU: Sabah is taking steps to transition its oil, gas and energy sector to meet targets set in the Paris Climate Agreement, as part of the global effort to reduce carbon emissions.
“The State government remains firmly committed in its role towards energy transition through the Sabah Energy Commission (ECoS), the Sabah Energy Roadmap and Masterplan (SE-RAMP 2024) launched back in September 2023,”said Managing Director of Sabah Oil & Gas Corporation Sdn Bhd (SOGDC), Datuk Harun Ismail.
He noted that the industry continues to evolve in response to changing demands and trends, with one of the biggest changes affecting the industry being the race to reduce carbon intensity to meet the targets set out in the Paris climate agreement.
“Part of the strategy to combat climate change is energy transition and digitalisation, while human capital is necessary for the implementation of this strategy,” he told participants at the Sabah Oil, Gas & Energy Conference and Exhibition (SOGCE 2024), recently.
In line with efforts towards energy transition, Harun pointed the State Legislative Assembly approved the new Ocean Thermal Energy Conversion (Otec) Enactment 2024 on 25 April 2024, noting the passing of the bill reaffirms Sabah’s territorial water and aligns with Sabah’s Blue Economy initiatives.
Sabah will host the Sabah International Blue Economy Conference (SIBEC) 24 on the first week of September 2024.
Harun said Sabah has numerous locations with ideal conditions for Otec technology with the potential power generation of an estimated 20,000 megawatts (MW). Potential areas for Otec technology is the South China Sea and the sea off Balung, Tawau.
Otec is a technology for producing renewable energy by harnessing the temperature differences (thermal gradients) between the hot surface waters of the ocean and the cold deep ocean waters.
“Otec is a form of renewable energy which can also pave the way for green hydrogen production, generate job opportunities, attract foreign investment and spur economic growth,” he said.
Harun commended the passing of the Otec Bill which reflected the State Government’s commitment towards renewable energy and sustainability, and awareness towards energy transition.
“Sabah is quite unique with regards to energy transition,” he said, noting gas represent 90 per cent of the generation mix while the balance is diesel and renewables.
As comparison, he noted the generation mix in the peninsula leans more towards coal at 60 per cent, while renewables represent six per cent.
“No coal is utilised in Sabah’s generation mix. For Sabah, it will not make sense to use gas as a transition mix as it already represent 90 per cent of the State’s generation mix,” he said
Furthermore, Harun underlined the need to reduce gas utilisation in Sabah’s generation mix because gas is an energy source that is subsidised by the government. “It’s a lot of subsides at 90 per cent and as an energy source, it is not the optimal way to monetise gas,” he added.
Harun pointed the transition provides both challenges and opportunities to Sabah which needs a unique approach for its energy transition.
“The energy transition represent a fundamental shift in how we produce, consume and think about energy which goes beyond just replacing fossil fuels with renewables,” he said.
According to Harun, such measures encompasses a broader transformation that include energy efficiency, electrification and the development of new energy carriers and technology.
“While renewables are crucial, the transition will take time and require a diverse mix of energy sources,” he said. Harun also noted that balancing energy security, economic stability and environmental sustainability is a complex task that requires careful planning and implementation.
“It is, therefore, imperative to implement inclusive and equitable transition strategies that support affected workers and communities, including retraining programmes, social safety nets and economic diversification initiatives.
“Developing countries, including Malaysia, face unique challenges in transitioning to clean energy due to financial constraints and technological gaps,” he said.
He noted international cooperation and financial support are essential to ensure that all countries can participate in and benefit from the global energy transition.
Harun also emphasised the importance of human capital development, which is essential to the success of the energy transition, as well as the oil and petrochemical sector, which depends on the skills, knowledge and adaptability of its workforce.
Meanwhile, Malaysian Oil, Gas & Energy Services Council (MOGSC) President, Syed Saggaf Syed Aman said the MOGSC is committed to play its role in fostering strategic collaborations to ensure Sabah companies continue upskilling their capabilities and upskilling their resources.
“At MOGSC, we believe and fully support Sabah’s aspirations, which is why we have spent our efforts in the last year, collaborating with our counterparts in Sabah, especially SOGSC and Persatuan Kontraktor Petroleum Bersatu Sabah (PKPBS) and other stakeholders to ensure we can play our role in enhancing the OGSCE sector in Sabah via strategic collaborations and partnerships,” he said.
During his speech, Syed Saggaf noted the MOGSC established 4 key focus areas which include continuing stakeholder engagement in efforts to elevate pain points and recommendations to stakeholders to ensure equitable contracting, drive industry proposed terms and conditions to ensure proper risks and liabilities management.
Also, it includes efforts on ensuring proper compensation for services and products provided by industry players to customers that reflect current market scenarios and continuing advocacy role with the stakeholders to propose award of contracts to technically acceptable and commercially efficient players that considers local content, investment undertaken and track record.