MALAYSIA ENERGY POLICYFocusing on Sustainable Energy

Development and The Way Forward

CHRONOLOGY OF ENERGY POLICIES IN MALAYSIA

CURRENT ENERGY LANDSCAPE

SUSTAINABLE ENERGY

● Supply Side Management

● Demand Side Management

KEY CHALLENGES

WAY FORWARD

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OUTLINE PRESENTATION

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ENERGY POLICIES

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• Efficient utilization of petroleum resources

• Ensuring the nation exercises majority control inthe management and operation of the industry

National Petroleum Policy (1975)

• Supply Objective: Ensure adequate, secure &cost-effective energy supply

• Utilization Objective: Promote efficientutilization of energy and eliminate wasteful andnon-productive usage

• Environmental Objective : Minimize negativeimpacts to the environment

National Energy Policy (1979)

• To prolong the life span of the nation’s oil andgas reserves

National DepletionPolicy (1980)

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• Aimed at ensuring reliability and security ofsupply through diversification of fuel (oil, gas,hydro and coal)

Four-fuel Policy (1981)

• Encourage the utilization of renewable resourcessuch as biomass, solar, mini hydro etc

• Efficient utilization of energy

Five-fuel Policy (2001)

• To prolong the life span of the nation’s oil andgas reserves

National Renewable Energy (RE) Policy + Action Plan (2010)

ENERGY POLICIES

ENERGY EFFICIENCY IS EMBEDDED IN ENERGY POLICY

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• To ensure adequacy, security and cost-effectiveness of energy supply

• To promote efficient utilization of energy

• To minimize negative environmental impacts in the energy supply chain

Five-FuelDiversification Strategy 2001

Four-FuelDiversification Strategy 1981

National DepletionPolicy 1980

NationalEnergyPolicy 1979

National PetroleumPolicy 1975

PetroleumDevelopment

Act 1974

• Vested on PETRONAS the exclusive rights to explore, develop and produce petroleum resources of Malaysia

• To regulate downstream oil & gas industry via the Petroleum Regulations 1974

• To prolong lifespan of Malaysia’s oil reserves for future security & stability of oil supply

• To pursue balanced utilization of oil, gas, hydro and coal

• Renewable Energy included as the “fifth fuel” in energy supply mix

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POLICY STATEMENT

GreenTechnology shall be a driver to accelerate the national

economy and promote sustainable development

NATIONAL GREEN TECHNOLOGY POLICY

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As of 2016 INSTALLED CAPACITY (MW)

PEAK DEMAND

(MW)

RESERVE MARGIN

(%)

Pen. Malaysia 23,249 17,788 28.7%

Sabah 1,567 944.9 37.9%

Sarawak 4,437 3,315 34%

Total installed capacity is 29,253 MW

GDP: 4.5% (Q4-2016)

Electricity penetration: 93.7%

Electricity penetration: 95%

Electricity penetration: 99.83%

Source: KeTTHA Electricity Info Feb 2017

MALAYSIA : STATISTICS

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The flow of energy which is represented by the following equation

Primary Energy

Energy Consumption(Gross inland consumption)

Production+

Import-

Export-

Bunkers+ / -

Stock Change

Final Energy consumption+

Consumption of the energy transformation sector

+Distribution losses

+Non - Energy Consumption

Tra

ns

form

ati

on

pro

ce

ss

Primary Energy vs Energy Consumption

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MALAYSIA’s COMMITMENT TO PARIS AGREEMENT 2015

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GREENHOUSE GAS EMISSIONS

Percentages of Greenhouse Gas Emissions by Sector in 2011

Percentage Emissions According To Greenhouse Gas in 2011

Source: Biennial Update Report Malaysia 2011

Strengthening stakeholder coordination and collaboration in the energy sector

Ensuring the security of supply and reliability for the oil and gas subsectorwithin a market-based approach

Enabling the growth in the oil and gas subsector

Managing supply diversity for security of electricity subsector

Improving the sustainability, efficiency and reliability of the electricitysubsector

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11TH MALAYSIA PLAN : ENCOURAGING

SUSTAINABLE ENERGY USE TO SUPPORT GROWTH

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Source:RMKe-11 Document

STRATEGIC THRUST 4 : PURSUING GREEN GROWTH

FOR SUSTAINABILITY AND RESILIENCE

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"Effectively, the provision of energy such that it

meets the needs of the present without

compromising the ability of future generations

to meet their own needs

Two key components of Sustainable Energy:

Renewable energy and Energy efficiency

What Is

Source:https://en.wikipedia.org/wiki/Sustainable_energy

SUSTAINABLE ENERGY

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WHY IS SUSTAINABLE ENERGY IMPORTANT ?

Environmental Impact

- Reduce emissions of greenhouse gasses and mitigate the impact of global warming.

Sustainable Development

- Reduce dependence on rapidly depleting fossil fuels.

Energy Security

- Ensure the resilience of Malaysia’s energy supply by reducing dependence on imported

sources of fuel

Economic Development

- Tap Malaysia’s tremendous potential and develop a competitive Sustainable Energy

industry

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SUPPLY SIDE MANAGEMENT

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MALAYSIA : POWER MIX

Source: KeTTHA Electricity Info Feb 2017

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2014 2020

DEVELOPING THE POTENTIAL OF RENEWABLE ENERGY

vs

Source: RMKe-11 Document

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LSS is implemented by the Energy Commission (EC)

Quota allocation

1000 MW for 2017-2020 (250 MW/year)

o 800 MW for Peninsular Malaysia

o 200 MW for Sabah

LARGE SCALE SOLAR

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NET ENERGY METERING

FiT for Solar PV to cease post 2017 due to limited RE Fund.

NEM & LSS introduced to continue development of thesolar PV market.

Announced by YAB PM during Budget 2016

SEDA as implementing agency for NEM

Quota allocation for NEM;

500 MW for 2016-2020 (100 MW per year)

o 450 MW for Peninsular Malaysia

o 50 MW for Sabah

2020

DEMAND SIDE MANAGEMENT

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Low Energy Office - LEO

Green Energy Office - GEO

Diamond Building

1st showcase model completed in 2004 (GBI-Silver) Demonstrate the feasibility of EE design standards as implied

in MS1525 :2001 Code of Practice on EE & Use of RE for Non-Residential Buildings

BEI – 100 kWh/m2 annually CO2 reduction 56%

1st certified green building in Malaysia (GBI-Certified) Demonstrate advance EE and RE design for commercial

building- 2007 BEI - 65kWh/m2 annually Solar Energy - 35kWh generated CO2 reduction 86%.

Improved from both LEO & GEO building experience. Completed in 2010 Platinum certificate, from Malaysia’s Green Building Index

(GBI) and Singapore’s Green Mark. Building Energy Index- 85 kWh/m2 annually

PROMOTION OF EE BUILDINGS IN MALAYSIA

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EFFICIENT MANAGEMENT OF ELECTRICAL ENERGY

REGULATIONS (EMEER) 2008

Efficient Management of Electrical Energy Regulations(EMEER) 2008 has been gazetted on 15th December 2008

Key Provisions:• Applied to big energy users 3mil kWh/6months• Requires appointment of Electrical Energy Manager• Electrical Energy Management Policy• Energy audit recommendations for electrical energy

management• Monitoring &nd keeping of records• Periodical reporting

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SAVE PROGRAM ACHIVEMENTS

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SAVE PROGRAM

• Sustainability Achieved via Energy Efficiency (SAVE) Programme, 2011-2013 resulted in :

reduction of domesticelectricity consumption of306.9 GWh

savings of RM78.4 million

Greenhouse Gases (GHGs)emission reduction of208,705tCO2eq

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STANDARDS AND LABELLING

least energy efficient products are labelled with “2 Star”

the most efficient products are labelled “5 Stars”.

An Endorsement label will be issued by the Energy Commission

labels would be affixed on energy efficient products by the manufacturers.

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MINIMUM ENERGY PERFORMANCE STANDARD (MEPS)

Introduced Minimum Energy Performance Standard (MEPS) that willset minimum energy performance for energy consuming equipmentsold in the market. Currently MEPS has been introduced for 5domestic electrical appliances :

Refrigerators

Air-conditioners

Televisions

Fans

Lightings (Fluorescent, CFL, LED

and Incandescent)

gazetted in 2013 resulted in reduced electricity consumption and savings.MEPS Value 2 Stars

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SAVE PROGRAM ACHIVEMENTS

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ENERGY PERFORMANCE CONTRACTING (EPC)

Initiative started in January 2013 to promote EE in government buildings.

Effective mechanism to implement energy saving measures to promoteenergy conservation in government buildings by market mechanism-private investments

Urgent requirements to cultivate new strategic industries with activeinvolvement and investments from private sectors as outlined inEconomic Transformation Program

Under the EPC concept government buildings are allowed to engageESCOs to improve EE

The cost of investment to implement EE improvement will be provided bythe ESCO, while the owner of government buildings are allowed to paythe cost of investments by the ESCOs from the savings made

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OVERVIEW OF NATIONAL ENERGY EFFICIENCY

ACTION PLAN (NEEAP)

Industrial BuildingsEnergy Audit

(2016-2018)

Commercial BuildingsEnergy Audit

(2016-2018)

Shared cost of Energy Audit

between Government & Private

Sectors as an incentive for

Private Sectors to pursue

retrofit program

Energy Audit And Energy Management in :

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WAY FORWARD :11th MALAYSIA PLAN (2016-2020)RMK-11 : ENERGY AUDIT CONDITIONAL GRANT

EPC FINANCING THROUGH EPC FUND BY MDV

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MALAYSIA’S KEY CHALLENGES

Transparency

Industry Structure Optimizing Resources

Economic Growth Depleting Resources

Governance/Regulatory Price Volatility

Demand Management Subsidies

Realizing Regional Cooperation

Meeting Demand

Energy Security

Real Price

Strong Policy Needed to tackle the challenges…

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RESOLUTION – WAY FORWARD

RENEWABLE ENERGY Alternative mechanisms to deploy Renewable Energy capacity is

urgently required through: Large Scale Solar PV, Net-Metering Other mechanisms RPS, Green certificates? New RE Resources Wind, Geothermal, OTEC etc

DEMAND SIDE MANAGEMENT Comprehensive Demand Side Management Policy Urgently

Required Covering Total Energy Landscape – Electrical, Thermal& Transport EPU Undertaking The Effort and taken over by KeTTHA for final

comprehensive Policy

Buildings•Achieve 700 Registered Electrical Energy Manager(REEM)•Extend Energy Performance Contracting (EPC) to othergovernment buildings•All new government buildings to adopt energyefficient design•Retrofit 100 government buildingsIndustries•Introduce Enhanced Time of Use (EToU) with threedifferent time zones•Abolish Special Industrial Tariff (SIT)•Install 4 million smart meters•Increase on-grid co-generation capacity of 100 MW ormore by reviewing utility standby charges

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WAY FORWARD :11th MALAYSIA PLAN (2016-2020)

RESOLUTION – WAY FORWARD

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