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Malaysia’s Green Energy Path

The Asia-Pacific region will play a pivotal role in realizing the goals of the Paris Climate Change Agreement. In this vein, I am presenting here select excerpts of an annotated interview with one of Malaysia’s leading technology advisors, Prof. G. Lalchand that was conducted by the Institution of Engineers of Malaysia (IEM). Malaysia is often heralded as a success story of rapid development with a relatively manageable ecological footprint. The country’ environmental performance ranks third in the Asia-Pacific region (63rd globally out of 180 countries) according to the Yale Environmental Performance Index.

The Energy Commission Building in Kuala Lampur, Malaysia
The Energy Commission Building in Putrajaya, Malaysia. Courtesy, Asia Green Buildings Online

Malaysia was a leading negotiator for the group of developing nations at the 21st session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP 21) in Paris.  Seven years ago at the COP 15  meeting in Copenhagen Malaysia had agreed to reduce its “carbon intensity” (CO2eq emissions to GDP) by 40% from its 2005 value by 2020. Its commitment was enhanced to 45% carbon intensity reduction by 2030 at the COP 21 in Paris, France in 2015, subject to conditions regarding financing assistance and transfer of technology.

So what has Malaysia done so far, is doing now, and can do in the future to ensure that it can ‘honor’ its commitment at COP 21? According to Prof Ir. G. Lalchand (or Lal as he prefers to be called), Malaysian government policies for energy, especially electricity, supply have traditionally been based on “supply-side” considerations. Malaysia plans for adequate energy supply to to meet the projected energy demand, with enough reserve capacity to cater for plant breakdowns and other utility emergencies. Most of the electricity supply (over 90% nationally) still comes from fossil fuels and a little bit from RE resources like hydro, biomass from oil palm plantations and biogas from palm oil mills. However, as feedstock for power generation waste, especially from plantations has now become a valuable commodity and is too costly to burn for power generation due to its several alternative uses.

National RE development plans have changed over the last few Malaysia Plans from year 2000, under the auspices of the Sustainable Energy Development Authority (SEDA) as shown in Figure 1.  SEDA’s Renewable Energy (RE) capacity development, including the Economic Transformation Programme (ETP) target of about 1.25 GW from PV by 2020, is difficult to achieve with the present size of the RE Fund based on the RE levy of 1.6% on electricity bills of the affected consumers.  Although SEDA has attempted to promote overall development of electricity generating capacity from all the designated RE sources, its efforts have not seen much success, except for the PV sector. This has been caused partly by some external influences such as the high cost of biomass feedstock as a commodity with alternative uses, highly “convoluted approval” processes for small hydro projects, lack of successful examples of municipal waste to energy conversion projects and remoteness from the power supply grid of projects to use biogas from Palm Oil Mill Effluent (POME).

Malaysia's Energy Development Planning Path. Courtesy of Malaysian Sustainable Energy Development Agency
Figure 1: Malaysia’s Energy Development Planning Path. Courtesy of Malaysian Sustainable Energy Development Agency. RE = Renewable Energy; FiT = Feed-in-Tarrif

Policies promoting “green energy” really started to take root in Malaysia from 2006 when the National Bio-fuel policy was formulated to encourage the use of bio-diesel (mixed with mineral diesel) for the transport sector. This was followed by the formulation of the National Green Technology Policy in 2009 and the Renewable Energy Policy and Action Plan (REPAP) which led to the enactment of the RE Act in 2011 to develop RE powered electricity generation for supply to the national electricity supply network.

Numerous other initiatives in this arena include the following:

  • Energy efficiency awards for different categories of the larger consumers (early 1990s),
  • Japanese  and French government projects to conduct and inculcate energy audit practices and programs (mid 1990s),
  • Feasibility study for an Energy Efficiency policy (by Danish consultants in 1999/2000),
  • Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP, a UNDP/GEF project from 1999 to 2007),
  • Capacity Building in EE (Danish consultants from 2002 to 2005), which started the appliance EE labeling scheme for refrigerators and electric motors.

All these initiatives had varying degrees of success during the periods that the foreign consultants executed the programs, usually as joint-ventures with local consultants (as partners and “under-studys”). Unfortunately there was little or no follow-up to continue with those initiatives after the projects ended. In addition, the “EE equipment rebate scheme” mentioned in the list above was the SAVE (Sustainability Achieved Via Energy Efficiency) program, which was a part of EPP-9 (Oil, Gas and Energy Lab) of the Economic Transformation Program (ETP) to catalyze EE adoption via purchase of EE appliances such as five-star refrigerators and EE air-conditioners. This program was an unmitigated success as its end result achievements went well beyond its planned targets. Sadly, it was not continued after its “one-off” implementation. Nevertheless, the targets for renewable energy installation remain ambitious as exemplified in Figure 2.

RE_Plan for Malaysia
Figure 2: Malaysia’s Renewable Energy Planning Targets. Figure: Academy of Sciences, Malaysia

Prof. Lal laments that one of the most promising government initiatives on EE by the Ministry of Energy, Green Technology and Water ( the acronym in Malay is KeTTHA), the National Energy Efficiency Master Plan (NEEMP) that was formulated from mid 2008 to 2010 has not been “allowed to see the light of day”. The Plan was peer-reviewed by an Asia Pacific Economic Cooperation (APEC) team of industry experts at the end of 2010, and was basically endorsed as good policy, but the Malaysian government has not implemented it. Prof. Lal further noted that “KeTTHA had also been formulating an Energy Efficiency & Conservation (EE&C) Act, which was scheduled to be implemented by 2014 (as a part of the NEEMP), to enable adoption of EE in Malaysia”. However, KeTTHA later came out with a “watered down” version (as an NEEAP, i.e. an Action Plan) in January 2014, which removed any reference to the need for legislation for EE. The “watered down” NEEAP failed to get the stakeholders’ support that KeTTHA sought for it towards the end of the year.

It may be argued that JKR (Public Works Department) has done a lot more in EE by improving building designs to become more energy efficient. JKR  has also retro-fitted some large government buildings in Putrajaya to achieve energy savings of up to 14% (about RM2 million to RM2.5 million) a year. In the private sector, Prof. Lal noted, the Malaysia Association of Energy Service Companies (MAESCO) is doing retrofits to help companies save energy. Some of these activities have been conducted under an Energy Performance Contracting (EPC) concept, where the ESCOs invest in the energy saving installations for their clients. MAESCO members have been active but their success is limited because energy is cheap so companies are less keen on investing to be more energy efficient. Companies are also not getting as many incentives and EE support the government should be giving as in some other countries.

The Efficient Management of Electrical Energy Regulations (EMEER) which came into force in December 2008 require large electricity consumers using more than an average of 500,000 kWh a month to practice formal energy management. MAESCO has been approaching them to start saving energy with its energy performance contracting (EPC) system. It’s a form of financing energy equipment upgrades from cost reductions, as being practiced at the Serdang Hospital. Prof. Lal notes: “It now remains for us to see whether the adoption of EE&C initiatives will be implemented effectively and according to realistic time-lines. We would have to see if the targets and time-lines set are realistic and to make sure that adequate resources are made available for effective implementation.”

Prof. Lal also strongly supports the need to encourage widespread adoption of co-generation, as it can be easily and quickly adopted with minimal public investment. Co-generation can achieve energy conversion efficiency of up to 85% compared with “only power generation” efficiency of 60% at best. This issue has been raised by potential consumers (who would also be the investors) for many years, but the administrative hurdles, which have been partly “lowered” still remain.

Overall, Malaysia has exemplified considerable alacrity in moving forward with meeting climate change impact mitigation targets through green technology and sound energy policy. How far this performance can be maintained and transferred to other nations in need deserves to be carefully monitored through international support and connectivity.