R 060717Z JAN 09
FM AMEMBASSY KUALA LUMPUR
TO SECSTATE WASHDC 2194
INFO DEPT OF ENERGY WASHINGTON DC
DEPT OF COMMERCE WASHINGTON DC
NATIONAL SECURITY COUNCIL WASHINGTON DC
SECDEF WASHINGTON DC
ASEAN MEMBER COLLECTIVE
ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

UNCLAS KUALA LUMPUR 000005 
 
 
SENSITIVE BUT UNCLASSIFIED 
 
DEPT FOR EAP/RSP, EAP/MTS, AND OES 
T FOR MHUMPHREY 
EAP/MTS FOR DBISCHOF 
OES FOR BHOWARD, TSCOTT, AND WBEHN 
STATE PASS TO DEPT OF COMMERCE FOR SLOPP 
STATE PASS TO DEPT OF ENERGY FOR EMCGINNIS AND CWELLING 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP BTIO
SUBJECT: Malaysia Aims to Complete Nuclear Energy Policy by 2009 
 
REF: A. STATE 127423 
 ¶B. KUALA LUMPUR 702 (Malaysia Shows Interest in GNEP) 
 ¶C. KUALA LUMPUR 615 (Scenesetter for DOE Visit) 
 
¶1. (SBU) SUMMARY: The Government of Malaysia (GOM) plans to finalize 
a nuclear energy policy and enact legislation in 2009.  The 
government also intends to establish a nuclear energy regulatory 
agency and increase public and political support for civilian 
nuclear energy as a renewable energy source over the next few years. 
 GOM officials noted that Malaysia currently does not have the 
infrastructure to viably build a nuclear energy generator, but it is 
actively trying to build capacity to do so.  According to 
representatives from Malaysia's government-owned electric company, 
Tenaga Nasional Berhad (TNB), the company's nuclear energy taskforce 
unit has already implemented basic measures to position the country 
to construct the nation's first nuclear energy generator by 2020. 
These steps include building capacity to create a nuclear 
engineering-specific workforce, meeting with foreign electric 
companies to learn more about existing nuclear technology, and 
regularly sending staff to International Atomic Energy Agency (IAEA) 
workshops. 
 
¶2. (SBU) COMMENT: At present, given the absence of a national 
nuclear energy policy and issues related to the upcoming transition 
of the UMNO political leadership transition in March 2009, it is not 
clear that Malaysia actually has the political will to pursue 
nuclear energy.  Nonetheless, Tenaga Nasional is actively pursuing 
measures--from capacity building to a conducting a pre-feasibility 
study--to position the country to begin construction on Malaysia's 
first nuclear power generator within five years' time. Tenaga 
Nasional's stated preference of working with nuclear energy 
contractors that have been approved by the Nuclear Regulatory 
Commission places the USG and US companies in a favorable position 
to build stronger relations with both TNB representatives and GOM 
officials.  Furthermore, the existing relationship between the 
Department of Energy's Corporate and Global Partnership Development 
Division with the Malaysian Nuclear Agency and Tenaga Nasional 
provides another starting point for the USG to broaden its 
engagement with Malaysia in developing its civilian nuclear energy 
program.  The GOM needs to ensure that AELB will have sufficient 
resources and organizational structure to ensure that it can meet 
both the civilian nuclear energy regulatory tasks as well as 
technical support for Export Control law enforcement as envisioned 
in the proposed export control legislation. END SUMMARY AND COMMENT. 
 
 
Malaysia Still Drafting Nuclear Energy Policy 
--------------------------------------------- 
 
¶3. (SBU) Malaysian Prime Minister Abdullah has publicly announced 
that Malaysia will construct its first nuclear power plant by 2020, 
a declaration that has been widely quoted in the Malaysian press. 
Tenaga Nasional Berhad has been assigned the task of building the 
nuclear power generator (reftel B).  According to TNB Nuclear Energy 
Unit Executive Aznan Ezraie Ariffin, however, the company is 
hampered from actively pursuing this goal without a national nuclear 
energy development policy.  Malaysia currently does not include 
nuclear energy within its national energy mix.  Basic questions 
regarding whether Malaysia needs to pursue nuclear energy and if so, 
to what extent, still must be answered, stated Aznan, before the 
country can seriously embark on a civilian nuclear energy program. 
 
¶4. (SBU) Despite the absence of formal policy guidance, Tenaga 
Nasional has initiated four activities that will place Malaysia in a 
strong position to begin constructing a nuclear power plant as soon 
as the nuclear energy policy is approved.  These activities include 
capacity building, a site identification assessment, a 
pre-feasibility study, and a public relations campaign.  By pursuing 
the above, Tenaga Nasional aims to position Malaysia's nuclear 
energy plans "at the starting point in five year's time" stated 
Aznan.  If these pre-actions are not taken now, he explained, 
Malaysia would not have the capacity to even consider constructing a 
nuclear power generator by 2020. 
 
Capacity Building: From Knowledge to Workforce 
--------------------------------------------- - 
 
¶5. (SBU) Capacity building represents the starting point of 
Malaysia's nuclear energy ambitions.  According to MEWC Deputy 
Secretary General II Ms. Loo Took Gee, the GOM is actively seeking 
 
 
avenues for policymakers, energy regulators, and industrial players 
to learn about nuclear generator licensing regulations, human 
resources needs as well as educational requirements for nuclear 
engineers.  For instance, the Malaysia Nuclear Agency (MNA) 
regularly sends staff to attend IAEA workshops every month, with 
some staying six months at a time.  Aznan stated that Tenaga 
Nasional intends to send more employees for IAEA training on a 
regular basis as part of the company's capacity building efforts as 
well as to gain the attend of IAEA officials to demonstrate that 
Malaysia is serious in pursuing nuclear energy. (Note: IAEA 
officials will visit Malaysia in early 2009 to review the GOM's 
nuclear energy plans. End note.)  He added that other agencies such 
as MEWC, Ministry of Science, Technology and Innovation (MOSTI), 
Ministry of Natural Resources and Environment (MNRE) and the Energy 
Commission should be sending more of their staff for IAEA training 
as well. 
 
¶6. (SBU) Sending TNB employees to earn nuclear engineering degrees 
and conduct post-doctoral studies represents another capacity 
building measure the electric company has pursued, and hopes to 
expand.  TNB currently has three employees studying at the 
University of Michigan at Ann Arbor, the Korea Advance Institute for 
Science and Technology (KAIST) and Manchester University.  Aznan 
stated that while Tenaga Nasional would like to send more students 
for overseas study, it could not do so without additional funding, 
which Malaysia's nuclear energy policy will hopefully provide.  TNB 
would also like to develop "twinning programs" between the company 
and U.S. universities that have world class nuclear engineering 
programs such as the Massachusetts Institute of Technology (MIT), 
the University of California at Berkeley, and the University of 
Michigan at Ann Arbor.  (Note: Aznan studied nuclear engineering at 
UC Berkeley for one year. End note.) 
 
¶7. (SBU) Malaysia also is working to build its nuclear energy labor 
force from the policy planners to the regulators.  Aznan estimates 
that the GOM currently needs to dedicate 30 to 50 fulltime staff to 
conduct nuclear energy planning to regulatory policy-making.  MEWC 
Undersecretary for the Electricity Supply Division Mr. Soma Ramasamy 
added that constructing the nuclear power plant alone will require 
approximately 1000 laborers.  Meanwhile, running the generator will 
take 600 to 800 engineers of which 100 to 200 would need 
nuclear-related training (20% of the plant's workforce), while 400 
to 600 would be conventional engineers.  This workforce demand does 
not include the additional hiring of regulatory staff for Malaysia's 
Energy Commission and the Atomic Energy Licensing Board (AELB), the 
country's atomic regulatory body.  In addition, the Malaysian 
Nuclear Agency (MNA), the agency charged with promoting nuclear 
science and technology for national sustainable development, will 
also face additional staffing demands. 
 
Site Identification Assessment 
------------------------------ 
 
¶8. (SBU) Tenaga Nasional has already contracted a subsidiary company 
to conduct a site identification assessment to identify possible 
locations for a nuclear power plant.  TNB established the criterial 
and guildelines for the site identification assessment in 
collaboration with MEWC, MNRE, the public works department and 
several local agencies.  The guidelines adhere to international 
standards.  The site assessment will include a rank ordering of 
several locations for the Ministry of Energy, Water and 
Communications to review, which TNB executives will not share with 
MEWC officials until the national nuclear energy policy has been 
approved. 
 
Pre-feasibility Study 
--------------------- 
 
¶9. (SBU) Tenaga Nasional intends to appoint a foreign energy company 
to conduct a pre-feasibility study to review Malaysia's nuclear 
energy capabilities and needs.  The study will also include the 
information on the latest nuclear technology, justification for 
developing nuclear energy in the face of Malaysia's national energy 
plans and projected energy demand, manpower needs and capacity and a 
gap analysis.  Potential contractors include the Tokyo Electric 
Power Company (TEPCO) and the Korea Electric Power Corporation 
(KEPCO), companies with whom TNB already has memorandums of 
understanding for energy-related projects. Aznan stated that Tenaga 
Nasional's long-standing relations with both companies and their 
strong records in constructing nuclear power plants in their own 
 
 
countries led TNB officials to approach TEPCO and KEPCO for the 
task.  TEPCO officials met with TNB officials in early November, 
Aznan noted, while KEPCO representatives recently visited Malaysia 
in mid-December. 
 
Public Relations Campaign 
------------------------- 
 
¶10. (SBU) MEWC Deputy SecGen Loo admitted that without political and 
public support, Malaysia could not move forward with its nuclear 
energy ambitions.  Tenega Nasional is considering hiring local 
consultants, in a joint venture with international consultants (most 
likely from Japan or Korea), to help the GOM to promote nuclear 
power as a "safe, next generation" form of energy.  During a 
Department of Energy (DOE) visit in July 2008, TNB Nuclear Energy 
Taskforce Director Dr. Mohd Zam Zam bin Jaafar admitted that 
Malaysia's goal of developing nuclear energy depends more on 
"national will" than economic or technological resources.    MEWC 
Deputy SecGen Loo confirmed Dr. Zam Zam's assessment by  stating 
that the country will have a better indication of its nuclear energy 
plans by "early next year," after the transition of power in March 
2009 from PM Abdullah to Deputy Prime Minister Najib Tun Razak.  She 
added that the focal point for deciding Malaysia's nuclear energy 
future lies with the cabinet and that the country will have to wait 
and see. 
 
Establishing A Regulatory Framework 
----------------------------------- 
 
¶11. (SBU) Malaysia currently lacks a legal framework for assigning a 
regulatory authority to oversee nuclear power generating facilities. 
 The Atomic Energy Licensing Act of 1984, or Act 304, represents the 
closest legal guidance for nuclear material (reftel C). According to 
TNB's Aznan, the Atomic Energy Licensing Board is considering 
repealing Act 304 in its entirety to draft a more comprehensive law 
that would clearly delineate regulatory guidelines for nuclear 
energy materials and nuclear power generators.  While both the 
Malaysian Nuclear Agency and Tenaga Nasional would like to 
participate in the revision process, the separation of authority 
between the regulatory (AELB and the Energy Comission) and 
implementing agencies (MNA and TNB) prevents them from doing so. 
MEWC Undersecretary Soma admitted the many hurdles Malaysia faces in 
revising the Act, including clearly demarcating areas of 
responsibility between agencies that have conflicting roles.  For 
instance, the Energy Commission has staff that performs both 
regulatory functions through the Atomic Energy Licensing Board and 
implementing activities through Tenaga Nasional. 
 
¶12. (SBU) Given Malaysia's British-based legal system, Aznan 
explained, the GOM will most likely adopt regulatory standards used 
in other commonwealth countries such as Canada and South Africa. 
The GOM has also consulted with other ASEAN countries at nuclear 
energy subcommittee meetings regarding establishing a regional 
platform to jointly develop nuclear energy.  Malaysia also 
participates in other regional platforms such as the Forum for 
Nuclear Cooperation in Asia (FNCA) and the Asian Nuclear Safety 
Network (ANSN). 
 
Malaysia as a Potential Nuclear Energy Market 
--------------------------------------------- 
 
¶13. (SBU) Various foreign governments have already approached the 
GOM and Tenaga Nasional to secure nuclear energy contracts for their 
countries' companies.  According to Aznan, the Italian Ambassador 
has personally spoken with TNB executives regarding Italian nuclear 
energy technology.  Similarly, Deputy SecGen Loo revealed that 
Finnish officials have contacted MEWC with similar proposals. 
Russian and Korean government representatives have also offered 
their country's nuclear energy assistance capabilities to ASEAN 
member states.  On the commercial side, a torium-producing Norwegian 
company and a French electricity transport network firm, Ariba, have 
extended sales pitches to the GOM and Tenaga Nasional. 
 
Malaysia's "Benchmark": Nuclear Regulatory Commission 
--------------------------------------------- -------- 
 
¶14. (SBU) Tenaga Nasional regards the U.S. Nuclear Regulatory 
Commission's (NRC) rigorous licensing process as the "benchmark" 
that it plans to follow for its nuclear energy contracts.  Aznan 
specifically cited the NRC's approval of Westinghouse's AP 1000 
 
 
pressurized water reactor, the only Generation III+ reactor to 
receive this certification, as the standard TNB intends to seek for 
Malaysia's first nuclear power generator.  He added that TNB would 
also like to see Malaysia's Energy Commission eventually emulating 
the NRC's regulatory guidelines as well.  The GOM consequently has 
invited NRC experts to meet with officials from the Energy 
Commission, MEWC, AELB, MNA, and Tenaga Nasional to consult on how 
to restructure Malaysia's energy agencies and regulatory guidelines. 
 
 
KEITH 
 
 
NNNN 
 



End Cable Text