57.0% of the generation mix, followed by gas at 36.7%, hydro at 4.6%, solar at 1.5% and distillates at 0.2%. In 2023, the global energy landscape, particularly in the coal sector, experienced significant dynamics shaped by fluctuating demand, geopolitical tensions, and the gradual shift towards cleaner energy sources. Despite challenges, global coal demand remained robust, with consumption hitting new all-time highs, driven by various factors including the economic recovery post-pandemic and the energy needs of emerging economies. Coal prices, after soaring to unprecedented levels in 2022 due to a tight global supply and increased demand, particularly from Europe’s shift back to coal amid the Russia-Ukraine conflict and supply chain disruptions, began to stabilise in 2023. This stabilisation was influenced by factors such as mild weather conditions in Europe, amplestockpiles at coal-fired power plants, and a gradual convergence of coal prices across different regions. NAVIGATING THE FUEL PRICE HEADWINDS In FY2023, the average market coal price moderated to USD 134/MT reflecting a significant decrease from the all-time high above USD 415/MT in May 2022, yet still substantially higher than the base coal price of USD 79/MT set for Regulatory Period 3 (RP3). While coal prices were not as high as 2022, it still posed a challenge to the system’s financial stability as generation costs make up 65% of the electricity costs in the tariff. TNB’s cash flow continued to be pressured due to the high payment obligations to ensure security of supply to customers. Nevertheless, the industry was able to navigate these headwinds with the implementation of the Imbalance Cost Pass-Through (ICPT) mechanism that reflected the government’s response to fluctuating global fuel prices and its commitment to energy sustainability. The ICPT mechanism, under the Incentive Based Regulation (IBR) framework, reflects changes in fuel and generation-related costs in the electricity tariff, aiming to manage these fluctuations effectively. With the