In The News

KOTA KINABALU (April 24): The Sabah State Legislative Assembly approved the new Ocean Thermal Energy Conversion (OTEC) Enactment 2024 and Energy Commission of Sabah Enactment (Amendment No. 2) 2024 on Thursday.

Chief Minister Datuk Seri Panglima Hajiji Noor said this will pave the way for the development of OTEC as a new source of renewable energy and as one of the main initiatives under the Blue Economy.

“The Enactment will enable the state through the Energy Commission of Sabah (ECoS) to regulate the activities of exploration, construction and operation of OTEC facilities.

“The OTEC technology aims to harness the temperature difference between warm surface waters and cold ocean depths to generate electricity in an environmentally friendly manner,” he added.

The Chief Minister said Sabah boasts vast ocean resources with the right characteristics, making it a prime territory for exploring OTEC.

“Research findings have indicated that certain areas in the state have the potential to generate up to 20,000MW of electric power which could be used to produce green hydrogen, a highly sought-after energy source to achieve net zero carbon emissions goals.

“This industry will create jobs and attract foreign direct investments to Sabah,” he said.

In addition, the Chief Minister said secondary products such as mariculture products and drinking water will further generate economic development in the local surrounding areas.

“By positioning ourselves as the first in the ASEAN region for OTEC development, the State can also attract skilled professionals and foster innovation for the development of Sabah,” he added.

Datuk Ir Abdul Nasser Abdul Wahid, Chief Executive Officer of ECoS stressed that the development of this new technology aligns with the Sabah Energy Roadmap and Master Plan 2040 (SE-RAMP 2040) launched last September to increase renewable energy mix and identify new energy sources and technologies for the long term.

“ECoS, as the regulatory body, welcomes proposals in this regard to conduct exploration and feasibility studies to obtain the best development for Sabah,” he added.

The Ocean Thermal Energy Conversion Development Act 2024 received support from assemblymen at the State Assembly on Thursday.

When debating the bill, Sindumin assemblyman Datuk Dr Yusof Yacob emphasised the significant benefits of the OTEC bill for Sabah’s future.

“The OTEC bill has significant benefits for the state’s future, stimulating the economy with investor attraction and creating new jobs. This sustainable energy is a necessity,” he told the August House.

Yusof also commented on Section 3 of the bill concerning licensing, where he suggested that licenses be issued to Sabah-owned companies and government-linked companies (GLCs) by ECoS.

He highlighted the importance of Sabah retaining control over its energy resources.

He also underscored the potential financial benefits for Sabah if energy exports were managed locally, pointing out the positive impact on share prices seen in other companies involved in the production of energy in Sabah such as Ranhill and Powertron.

Yusof emphasised that outside companies could be employed as consultants, but licenses should only be issued to Sabah-owned companies and GLCs.

Meanwhile, nominated assemblyman Datuk Seri Panglima Yong Teck Lee, who also gave his support to the Bill, said that once it was passed, the definition of Sabah waters will be clear, since this was the stance of the Sabah legislature on its territorial waters, as outlined in the North Borneo Order in Council 1954.

Yong added that the Order in Council 1954 had never been challenged by any country.

He also shared that his study has found two viable locations for OTEC in Sabah: the west coast, located in the South China Sea, and Balung, near Tawau, which is closer and accessible, albeit approximately 15 kilometers from the coastline.

Yong also addressed potential challenges related to territorial sea boundaries, citing concerns that opponents may argue that Sabah is bound by the Territorial Sea Act, which limits Sabah’s territorial waters to only three nautical miles or 5.5 km from the coastline.

However, he emphasised that the definition of Sabah’s territorial waters under the North Borneo Order in Council 1954, approved by Queen Elizabeth, has never been challenged.

He urged the importance of asserting Sabah’s territorial waters and urged against compromise, insisting that Sabah’s territorial waters should not be subject to federal interference.

Yong emphasised the need to resolve any overlaps or disputes regarding territorial waters to ensure clarity and sovereignty.

“Let’s make a stand, don’t bring it to negotiations because this is finalised. If negotiated, they will bring us round and round and at the meantime, we won’t be able to implement the law … Let’s just do it. Let’s start small in Balung with 5000 MW, let’s start now. That’s it,” he said.

“We hope the Chief Minister and State Cabinet know that the people of Sabah and all in this August House, support them fully in demanding for this,” he said.

Moyog assemblyman Datuk Darell Leiking warned that the law may become redundant unless the 21-points in the Malaysia Agreement 1963 (MA63) is addressed, along with the Territorial Sea Act.

Senallang assemblyman Datuk Seri Panglima Shafie Apdal also agreed with Yong that Sabah cannot wait for the agreement in MA63, and agreed that the Bill must be approved.

He also urged the Chief Minister to bring the matter from streamlining since we are one country.

“We don’t want duplication in administration. There must be a streamline,” he said.

Pantai Dalit assemblyman Datuk Jasnih Daya said the Bill was in favour of everyone.

“It is important for the public to understand the significance of exploring renewable energy as existing energy sources decline. The Bill is aligned with the federal direction and the state government’s desire to drive economic growth and generate electricity sources in Sabah in the future,” said Jasnih.

He also said that OTEC will instill more confidence and attract more investors while exploring new technologies in the state.

“This will create opportunities for locals to work and learn about these new technologies, ultimately improving the standard of living here,” he said.

Jasnih also said he believed the Bill can help the economy of Sabah and ensure a stable electricity supply.

Additionally, the potential of OTEC, such as green hydrogen, will open up additional revenue opportunities for the state through sales tax, royalties, licensing fees and GLC joint ventures, which will benefit the people of this state.

“OTEC is also seen as a solution to basic infrastructure challenges such as water and electricity supply to remote islands, overcoming technical challenges and high cost constraints so that the people of Sabah can enjoy basic amenities regardless of their location,” said Jasnih.

Lamag assemblyman Datuk Seri Panglima Bung Moktar Radin, who also supported the Bill, said that with control over this sector, Sabah will control the direction of the energy resources compared to the bitter experience with oil and gas which are placed under the supervision of the federal government’s Petroleum Development Act 1974 (PDA 1974).

Bung said the PDA 1974 has consistently sparked disputes between the people of Sabah and federal.

“Certainly, this law is in line with the wishes of Sabahans who seek control and priority in managing their own energy interests,” he said.

Bung also mentioned that there are suitable waters in Sabah to implement OTEC such as the waters off Semporna, Tawau, Layang-Layang and Banggi, with a potential area of 135,120 square kilometres capable of producing 5,000 Mw.

Bung also advised the State Government to appoint an agency to explore the technology prior to granting license to any companies or concessions.