SUSTAINABLE ENERGY

INITIATIVES AND

CHALLENGES IN MALAYSIA

By

Ir. Ahmad Fauzi Hasan

Energy Commission

Malaysia

29 Sept. 2011

Malaysia’s Oil And Gas Resources

CRUDE OIL : 5.8 billion barrels NATURAL GAS : 79.18 trillion standard cubic feet

RESERVE LIFE : Oil – 24 years, Gas – 36 years

(source: PETRONAS (as at 1st January 2010)

Hydropower : 22,000 MW

Mini-hydro : 490 MW

Biomass : 1,340 MW

Biogas : 410 MW

Municipal solid waste : 360 MW

Solar : Unlimited

Wind : Limited wind speed

Malaysia’s Renewable Energy Potential

Electricity Supply Industry Structure

Generation

Transmission

Distribution

Supply

Generation

Supply

consumers

Co-generators

IPPs

TNB

Local Distribution

Mini Utilities

(with generation)

Peninsular

Malaysia

Co-generators

IPPs

SESB

or

SESCO

Local Distribution

Transmission

Distribution

consumers consumers

consumers

Sabah

&

Sarawak

consumers

Legal And Regulatory Framework

Acts of Parliament

Regulations – Power of the Minister to make regulations

Licences – Issued by Energy Commission and approved by Minister

Licence Conditions

1. Energy Commission Act 2001

2. Electricity Supply Act, 1990

3. Electricity Regulations, 1994

4. Licensee Supply Regulations, 1990

5. Electricity Supply (Exemption) Notification 1994

6. Efficient Management Of Electrical Energy Regulations 2008

7. Licences issued to generators, distributors and suppliers

8. Prescribes mandatory standards for licensees’ activities

Agreements – Between Industry Players

10. Power Purchase Agreements

11. Fuel Supply Agreements

9. Grid Code, Distribution Code, Guidelines provide guidance for industry

Industry Codes and guidelines – Issued By Energy Commission

Electricity Generation Mix for Sarawak in 2010 (GWh)

Electricity Generation Fuel Mix for Malaysia in 2010 (GWh)

Electricity Generation Fuel Mix

Renewable Energy Installations

Category Mini-

hydro

Biomass

& biogas Solar PV Wind Total

Grid-

connected

(MW)

44.3 49.9 1.5 - 95.7

Off-grid

(MW) - 454.0 13.1 0.2 467.3

Total

(MW) 44.3 503.9 14.6 0.2 563.0*

*RE Capacity as of June 2011: Connected to power utility grid: 95.7MW

The Small Renewable Energy Programme (SREP) was

launched in the 8th Malaysia Plan (2001-2005) to

develop small grid-connected, renewable energy power

plants of not more than 10 MW capacity

SREP was targeted to contribute 5% (600 MW) of the

country’s electricity demand by 2005.

A new SREP target of 350 MW was set in the 9th

Malaysia Plan (2006-2010)

Despite various fiscal incentives, to-date only about

95.25 MW total capacity are in operation

Limited Progress In Renewable Energy

Development

Pricing and financing

Fuel supply contracts and availability

Technology

Awareness

REPPA terms and process

Policy and institutional issues

Barriers To Renewable Energy Development

National RE Policy and Action Plan

Subsidy rationalization programme

New Generation Capacity Competitive Bidding

Green Technology Financing Scheme

Renewable Energy Fund

Enhancement of legal and institutional

frameworks

Recent Renewable Energy Initiatives

Enhancement Of Legal And Institutional Frameworks

Legal framework

Enactment of Renewable Energy Act 2011

Sustainable Energy Development Authority

Malaysia (SEDA Malaysia) Act 2011

New distribution code

Electricity Supply Act review

Institutional framework

Green Technology Corporation

MyPower Corporation

Sustainable Energy Development Authority

(SEDA)

R & D Institutions

Sustainable Energy RD&D Institutions

Institutions Focus Areas

Malaysian Palm Oil Board (MPOB) Biomass, Biogas, Biofuel

Nuclear Malaysia Nuclear energy

University Research Centres Solar, Fuel Cell, Hydrogen, Wind

Petronas, TNB, PROTON Gas, Renewables, Hybrid/Electric

vehicles, Energy efficiency, Smart Grid

Malaysia Green Technology Corporation Green technology RD&D Promotion

Policy Approaches To Catalyse Renewable Energy Development

Fiscal incentives

Capital grants

Direct subsidies

Debt financing

Government procurement

Loan guarantees

Guaranteed grid access

Feed-in tariffs

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

2010* 2015 2020 2030

5.0% 4.3% 3.9% 4.6%

53.0% 53.0% 49.6% 41.3%

42.0% 39.3% 40.6%

28.9%

17.8%

3.5% 5.9% 7.3%

Hidro Gas Coal Nuclear REGas Volume 1350 1350 1350 1350 (mmscfd)

Towards A More Balanced And Diversified Generation Fuel Mix*

Peak Demand

(MW) 15,072 17,963 21,227 25,817

Energy

Generated

(GWh) 100,991 119,902 142,254 173,008

* Peninsular Malaysia

Trends in GDP and Electricity Consumption

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

RM Million

(at 2000 prices)

18,000

28,000

38,000

48,000

58,000

68,000

78,000

88,000

98,000

108,000

GWh

GDP (RM million) 189,059 205,312 221,319 239,792 261,951 283,645 312,017 335,556 310,381 328,194 356,401 358,246 377,559 399,414 426,508 449,250 475,526 505,919 528,311 521,096 558,382

Electricity Consumption (GWh) 19,932 22,373 25,778 28,474 34,076 39,225 43,897 50,952 53,195 55,961 61,168 65,015 68,827 73,371 77,206 80,705 84,575 89,294 92,815 96,313 104,519

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: National Energy Balance

Final Energy Intensity

Notes: Intensity=Quantity of energy required per unit output or activity

*Final Energy Demand/GDP at 2000 prices

**Industrial Energy Demand/Industrial GDP at 2000 prices

***Electricity Demand (toe)/Industrial GDP at 2000 prices

source: National Energy Balance

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Final Energy Intensity* 70 71 73 73 74 78 77 78 82 83 83 88 88 87 88 85 85 88 85 78 75

Industrial Energy Intensity** 57 63 69 73 71 60 65 62 78 72 72 76 79 76 77 77 83 90 85 78 65

Electricity Intensity*** 9 9 10 10 11 12 12 13 15 15 15 16 16 16 16 16 15 15 15 15.9 16.1

Final Energy Intensity-9th Malaysia Plan (at 2000 Prices) 83.3 87.0 88.3

0

10

20

30

40

50

60

70

80

90

100

toe/RM million (at 2000 Prices)

`

0

20

40

60

80

100

120

140

0 5000 10000 15000 20000 25000 30000 35000 40000 45000

GDP / Capita (US$)

En

erg

y C

on

su

mp

tio

n

(‘000 k

Wh

/ C

ap

ita)

Energy Consumption per Capita vs. GDP per Capita

Source: EIA

Ukraine

Russia

US

Kazakhstan Czech Republic

Malaysia

Turkey Brazil

Romania Thailand

China Egypt

Philippines Indonesia

India

Italy

France Germany

UK

Japan

Canada

Status of Malaysia’s Energy Efficiency

Source: Wikipedia

Initiatives To Enhance Energy Efficiency In Electricity

Utilization

• Enhancing industrial, commercial and domestic consumers’

energy efficiency through MIDA incentives scheme

• Improving energy management by large consumers through

implementation of Efficient Management of Electrical Energy

Regulations

• Improving electrical equipment energy efficiency through

implementation of minimum energy performance standards and

energy rating / labelling scheme

• Inculcating energy efficiency culture through more efficient

electricity pricing and public acceptance programmes

Implementing new generation capacity bidding

mechanism

Gradual phasing-out of fuel subsidies to reach market

pricing in 2015

Implementing fuel cost pass-through with stabilization

mechanism and selective subsidization

Accounting unbundling of national utility’s

generation/transmission/distribution divisions

Enhancing governance in grid system operations

through ring-fencing mechanism

Strengthening and streamlining legal and institutional

frameworks

Gaining stakeholders’ acceptance for reforms

Initiatives To Enhance Economic Efficiency

In Electricity Supply Industry

The Challenge Is To Decouple Electricity Demand

From Economic Growth

The Trans-Asean Gas Pipeline Project Challenge

Bakun

Bt. Assam

Batam

K. Ngae

Gurun

Mae Moh

Hongsa

Nam

Theun

Ha Tinh

Pleicu

Ban Sok

Udon

Nabong

Savannakhet

Roi Et

Ubol

Ratchathani

THAILAND

M A L A Y S I A

PHILIPPINES

SINGAPORE

LAOS

VIETNAM

MYANMAR

Jambi

Bintan

I N D O N E S I A

BRUNEI

DARUSSALAM

Asamera

Natua

Samarinda

Phnom

Penh

Yadana

Yetagun

Mae Sot Bago

CAMBODIA Siem Reap

Watthana

Nakhon

The ASEAN Power Grid Challenge

1. Peninsular Malaysia – Singapore

2. Thailand – Peninsular Malaysia

3. Sarawak – Peninsular Malaysia

4. Sumatra – Peninsular Malaysia

5. Batam – Bintan – Singapore

6. Sarawak – West Kalimantan

7. Philippines – Sabah

8. Sarawak – Sabah – Brunei

9. Thailand – Lao PDR

10. Lao PDR – Cambodia

11. Thailand – Myanmar

12. Vietnam – Cambodia

13. Lao PDR – Vietnam

14. Thailand – Cambodia

15. Sabah – East Kalimantan

THANK YOU