Malaysia energy strategy towards sustainability: A panoramic overview of the benefits and challenges
Abstract
Sustainable energy supply is essential for actualizing Malaysia׳s vision to become a high-income country. The current power production and demand trends show that Malaysia has a reserve margin that will only last for the next few years. This calls for further investment, research and development in the country׳s power sector in order to meet the ever increasing energy demand. The government׳s diversification policy and power sector expansion plan emphasizes on the incorporation of renewable energy sources (RESs) and other less CO2 emitting sources like nuclear into the national energy mix. However, the environmental ramifications of this policy should be part of any future expansion plan of national grid. This paper presents a panoramic overview of the Malaysian energy sector, the energy policy revolution and the power sector expansion strategy towards secure sustainability. We want to bring into focus the benefits and challenges of Malaysia׳s power sector expansion plan with the aim of stimulating further discussion and research on the environmental ramifications of the plan.
Keywords
- Malaysia electricity sector;
- Energy outlook;
- Power expansion plan;
- Diversification policy
1. Introduction
Malaysia is one of the fast growing economies in South-East Asia. The country׳s economic development is partially driven by government׳s policy on industrialization which welcomes both local and foreign investments. As one of the rapidly developing countries in Southeast Asia, Malaysia is committed to becoming a developed nation by the year 2020. To realize this vision, economic growth was propelled from being an agricultural and commodity-based to manufacturing and service-based [1].
In the last two decades, Malaysia׳s gross domestic product (GDP) grew steadily at an average of 5.8% per year from 1990 until 2011 [2]. Between the years, Ong et al. [2] note that sluggish economy growth were experienced in 1998, 2001 and 2009 and the slow growth in economy has been noted to be due to the following factors; Asian Financial Crisis, slow growth in export demand for electronic products and the economic downturn from the slow growth in manufacturing industry [1], [2], [3] and [4].
Human development and economic growth are the key drivers of global energy demand. Conversely, diverse, reliable, affordable and sustainable energy sources are needed as foundation to enhance the economic and societal advancements [5] and [6]. Since energy demand is expected to grow proportionally with GDP and economic growth, Malaysia has to prepare strategies to ensure sustainable and affordable power supply in the future.
Fossil-based energy sources; in particular coal and natural gas has been the major contributing fuels for the power sector in Malaysia. The challenging issue is how to achieve sustainability, i.e. to ensure the security and reliability of energy supply; while taking the environmental consequences of energy production into account. Globally, the power sector has been a major contributor of greenhouse gas (GHG) emissions and this has been noted to be due to the dependence of most electricity generating plants on coal and oil [7]. In Malaysia for instance, the power sector is expected to depend more on imported coal in order to meet it׳s rising energy demand and this has been predicted to result in a situation where the carbon emission profile will be tripled by 2030 compared to its magnitude in 2004 [8].
In order to reduce Malaysia׳s overdependence on fossil fuels and maintain stability in power supply, various diversification programs and policies were introduced. Four-fuel Diversification Strategy was introduced in 1981 as an extension of the 1979 National Energy Policy to decrease dependency on oil. Subsequently, the Five-fuel Diversification Strategy was introduced in 1999 [1] and renewable energy (RE) was made the fifth fuel in the energy supply mix through the fifth fuel policy under the Eighth Malaysia Plan (2001–2005) [9]. The electricity production from renewable energy sources (REs) in Malaysia has been improving in the last two decades as depicted in Fig. 1.
- Fig. 1.Electricity production from REs in MY, TH and SG [10].
Fig. 1 compares the total electricity production from REs between three southeast Asian countries (namely, Malaysia (MY), Singapore (SG) and Thailand (TH)). In 2009, the electricity production from REs in Malaysia was about 8400 kWh, which is twice the value in 1990 [10].
Apart from diversification plan, the government have facilitated a more pragmatic and environment-friendly policy under the tenth Malaysia plan [11]. The tenth Malaysia plan (2011–2015) emphasizes national commitment towards green technology by aiding research institutions׳ activities on green technology towards commercialization through appropriate mechanisms [9] and [12].
Malaysia is a one of the signatories of the Kyoto Protocol; and the country has been working towards a low carbon economy and community with the aim of reducing greenhouse gases (GHGs) emissions and ultimately the effects of global warming [13]. Malaysia׳s Prime Minister pledged to reduce 40% of the country׳s CO2 emissions intensity per unit GDP by 2020 against a 2005 baseline to show Malaysia׳s commitment towards greener energy at the United Nations Framework on Climate Change Convention in Denmark [14]. This pledge needs a lot of commitments in the part of the government, especially when one considers the quest of industrialization which is almost totally energy depended.
This paper presents an overview of the Malaysia energy sector, the energy policy revolution and the power sector expansion strategy towards secure sustainability. The aim of this paper is to bring into focus some of the challenging issues of Malaysia׳s power sector expansion plan which aims at reliability, sustainability and security of energy supply in order to stimulate further discussion and research on the subject matter. The contradiction between the realization of Malaysia׳s targets of low carbon community and its power expansion strategies is highlighted. Recommendations are provided on how to resolve this difference and on the ways to strive towards greener energy mix which is the sole goal of the tenth Malaysia plan.
2. Malaysia energy mix
From 2010 to 2012, the total primary energy supply in Malaysia has increased by 8.49% from 76,809 ktoe to 83,939 ktoe respectively. The total final energy demand has increased by 11.21% from 41,476 ktoe to 46,710 ktoe in the same years [6], [15] and [16].
Malaysia׳s total installed electricity generation capacity was 24,361 MW in 2010 and 29,143 MW in 2012. The total electricity generation has increased by 19.50% from 108,175 GWh to 134,375 GWh from 2010 to 2012, while electricity consumption has increased by 10.17% from 104,521 GWh to 116,354 GWh in the same duration [15] and [16].
Natural gas, coal and hydro are the primary fuels for power generation. The contribution of individual fuel source for electricity generation in 2012 was as follows; coal for 48.3%, followed by natural gas accounted for 39.4%, hydropower for 7.4%, diesel and fuel oil for 4.7% and RE at 0.2% (See Fig. 2) [6], [15] and [16].
- Fig. 2.Energy input in power station 2012 [16].
2.1. Natural gas
Natural gas was discovered in the year 1983; Malaysia natural gas proven reserve stands at 58 trillion cubic feet (Tcf) in 2006 [17], 88 Tcf in 2008 [13] and 83 Tcf in 2010 [18]. The reserves are mainly found offshore east Malaysia (Sabah and Sarawak) and some location in the east Coast of Peninsular Malaysia[18]. Management of natural gas resources was the responsibility of Petroliam Nasional Berhad(PETRONAS), who manages the exports and distribution to national sectors including power sector [19]. The, natural gas supply comes from Kerteh, Terengganu and Malaysia–Thailand joint development area through the Peninsula gas utilization (PGU) pipelines ( Fig. 3). The PGU pipeline is one of the most extensive natural gas pipelines in Asia. It spans more than 880 miles with capacity to transport 2 billion cubic feet every day [13]. The PGU pipeline initiative helped to expand regional natural gas trade, especially with neighboring countries like Thailand, Singapore and Indonesia [20].
- Fig. 3.Natural gas supply network in Malaysia [22].
Natural gas reserves in Malaysia are the second largest in South East Asia and the 12th largest in the world[17] and [21]. A study in 2010 indicates that the natural gas could contribute as the main source of energy in Malaysia׳s energy mix for the next 36 years [13]. However, in the 2010 report of the Economic Transformation Program and PETRONAS indicated that oil and gas reserve will deplete at the rate of 4% annually and will decrease faster after 10 years [19]. Hence, depending on national gas reserve is deemed not practical in future power expansion plans, unless additional supply is imported to meet the ever increasing demand. Malaysia commenced the importation of natural gas fro Indonesia and Thailand in the years 2002 and 2005, respectively [18].
Peninsular Malaysia has 18 gas-fired power plants with combined capacity of 12,888 MW which accounts for 58% of the power production in the energy mix [1] and [18]. The power sector is the major consumer of natural gas, as its account for half of the total consumption. The consumption of natural gas has been on the increases from 1990 to 2008 even after implementation of Five Fuel Diversification Strategy in 2001[22] and [23]. However, development of new technologies and robust diversification strategies could lead to reduction in the dependence on natural gas by the power sector and this will help to meet and balance other demands [19] and [24].
2.2. Coal
Globally, coal provides around 30% of primary energy needs and generates 41% of the world׳s electricity. In Peninsular Malaysia, coal is fully imported from countries such as Indonesia, Australia, South Africa and China for power generation [13], [14] and [17]. Malaysia has significantly large coal reserves, but most of them are found in inland areas which have inadequate infrastructure and high extraction cost. Most reserves are found in Sabah (29%) and Sarawak (69%), and only 2% in Peninsular [18].
The percentage contribution of coal in electricity generation has increased from 9.7% (in 1995) to 48.3% (in 2012) [16] and [24]. The increase depicts the result of reducing dependence on natural gas for electricity generation and the starting new coal fired power stations by the independent power producers (IPPs)[1] and [25]. Coal import is expected to increase in response to the governmental policy of intensifying its use for power generation [8]. At the moment, coal consumption stands at around 20 million ton every year and the consumption is expected to increase to more than 25 million ton annually after the commissioning of new coal plants in Manjung and Tanjung Bin [1] and [14].
The major concern regarding coal is the ability to maintain the imported supplies as it exposes Malaysia to interruption in supply and increases in cost of coal. Although coal is the cheapest and most abundant fossil source, the price and supply is fully controlled by suppliers, depending on the global demand which increases each year. Malaysia has to compete with major coal consumers such as China, USA and most recently Japan, who switched to non-nuclear power after Fukushima nuclear accident. In addition, the increasing threat of anthropogenic global warming has caused policy makers to begin to consider moving towards an agreement that would charge power plants for CO2 emission and if this happens, the days of cheap electricity from coal will be gone [26]. Since uncontrollable supply may have negative effects on the national power security, efforts have been made to explore and develop local coal mines in Sarawak in addition to the imported supplies [18] and [21].
2.3. Hydropower
In Malaysia, hydropower is the only REs that commercially contribute to the national energy mix. The first major dam (Chenderoh Dam) was constructed in 1939, followed by Sultan Abu Bakar Dam in 1963. After the oil crisis of 1970s, more dams were constructed and this action eventually puts hydroelectric into the main energy mix of Malaysia [27]. The combined installed capacity of hydro in Peninsular Malaysia is 1911 MW from 4 hydroelectric plants. The share of hydropower in the energy mix was 10% in 2000 and it declined to 5.6% in 2010 [18]. The completion of the Bakun Dam in Sarawak which has an installed capacity of 2400 MW has increased the share of hydro to 9% in 2012 [1]. The Bakun hydropower was planned to be connected to grid in the Peninsular by Sarawak Interconnection Project via undersea cables[28].
Tenaga Nasional Berhad (TNB) plans to increase the hydroelectric power capacity from its current capacity by 2020. The 2009 production capacity of hydro was 4000 MW [29]. However, construction of new hydropower plant is overwhelmingly complex and initial capital intensive, some of the other issues that are associated with hydroconstruction are the social, environmental and political ramifications [17] and [21]. A relevant suggestion is to increase the output capacity via upgrades of existing turbine units that almost reach their life time expectancy. The upgrade will be commenced along with overhaul progress to the plants [1].
It is expected that in the long term, hydropower will contribute immensely to Malaysia׳s energy sector. Some of the advantages of new hydroplant appear to are its socioeconomic impacts as flood control, irrigation farming, rural electrification and social infrastructure such as roads and provision of employment to the local people [17] and [21].
2.4. Fuel oil and diesel
Contribution of oil in Malaysia energy mix was once up to 87.9% before the international oil crisis in 1973 and 1979, and the implementation of Four-fuel Diversification Strategy in 1981 [25]. Majority of Malaysia oil reserves are in the east coast of Peninsular Malaysia, where high quality oil is found. Malaysia׳s oil production started to decline significantly in 2006 even though several new oil fields have come online during last few years [25]. The contribution of oil in the energy mix was declined sharply to merely 10% in 2003 [22] and is only around 3% in 2011. Apart from using oil for power generation, it is exported as crude oil or as downstream petroleum products [19] and [6].
2.5. Renewable energy
Malaysia is blessed with abundant RE resources such as biomass/biogas from oil palm wastes, mini hydro, solar and municipal solid wastes [30]. Table 1 summarizes the estimated RE potential in the long run [13].
- Table 1.Renewable energy potential in Malaysia [13].
- Source: Malaysia Energy Center׳s National Energy Balance.
RE was added as the fifth source of energy when the Five-fuel Diversification Strategy replaced the Four-fuel Diversification Strategy in 2002, with the target of providing 5.5% of power generation in the energy mix by 2010 through Small Renewable Energy Power (SREP) Program [18]. However, the development is rather slow, with end result of only 1% of the total energy mix being renewable [13] and [30].
Currently, installed RE capacity stands at less than 1% of total electricity generation in Malaysia. Even though the development of RE is still in early stage, it is estimated that utilizing 5% of the energy mix for RE will save up to 5 billion Malaysian Ringgit over a period of 5 years [31].
3. Revolution of Malaysia׳s energy policies
A positive progress in energy sector is partly contributed by the improvement in energy policy and elaborate future plans by energy commission and energy suppliers. Malaysia׳s energy policies have evolved over the years since the 1973 world oil crisis. The policies guide the energy-related activities in Malaysia as illustrated in Fig. 4[1].
- Fig. 4.Malaysia energy policy development.
3.1. National energy policy (1975–2009)
Implementation of energy policy in Malaysia starts with National Petroleum Policy of 1975 as subsequent to the Petroleum Development Act in 1974. The policy regulated oil and gas industry as major factor to accelerate economic development. In 1979, National Energy Policy was introduced with 3 principal objectives; the supply objective, the utilization objective and the environmental objective. These objectives served as guidance in the formulation of Malaysia׳s five-year development plan. The main purpose is to ensure the availability of the energy supply with reasonable price to support the nation׳s economy development [31].
National Depletion Policy (NDP) was introduced in 1980 to manage oil exploration by controlling production in major oil fields. The aim of the NDP was to prolong the lifespan of oil reserves for future security and stability of oil supply [1]. The policy was then extended to include natural gas reserves in 1996. The gas and oil production were limited to certain amount per day to control rapid depletion.
In 1981, the government of Malaysia designed Four-fuel Diversification Strategy to reduce overdependence on oil and ensure energy reliability and security. The strategy aims for a balanced energy supply mix of oil, gas, hydropower and coal, as well as utilizing local resources to enhance security of supply. The result of this policy lead to a significant shift from oil to natural gas, as it is seen as appropriate to compliment supply and environmental objectives as spelled out in the National Energy Policy. The Four-fuel Diversification Strategy was further developed into Five-fuel Diversification Strategy. Under the current strategy, renewable energy resources were considered as the fifth fuel for the energy mix. Modalities on utilization of REs are presented in the National Renewable Energy Policy and Action Plan in 2009[30] and [32].
3.2. New energy policy (2010)
The latest energy policy was implemented in 2010 under the Tenth Malaysia Plan. The Tenth Malaysia Plan describes the new energy policy as a further step to encapsulate all efforts to ensure economic efficiency, security of energy supply and to meet the social and environmental objectives in National Energy Policy of 1979 [1] and [12]. New Energy Policy 2010 identified five strategic pillars for providing the primary areas of focus to achieve the National Energy Policy objectives. The five strategic pillars and their purpose are as follows [1]:
- a.
- Energy pricing – Rationalizing energy pricing gradually to match market price, by taking into account current economic condition and affordability to the citizen.
- b.
- Strategic supply side developments – Undertaking a more strategic development of energy supply by diversifying energy resources, including renewable energy resources. Nuclear energy will also be considered as an alternative source of energy.
- c.
- End use energy efficiency – Accelerating the implementation of energy efficiency initiatives in the industrial, residential and transport sectors.
- d.
- Energy governance and regulation – Improving governance to support the transition to market pricing, while providing assistance to mitigate impact on the low income group.
- e.
- Management of change and affordability – Ensuring that the New Energy Policy is implemented based on an integrated approach and according to schedule to achieve energy supply security.
The new policy also emphasizes on National Green Energy Policy (NGEP), under which special consideration was included in the RE development plan. Short term goals vested in NGEP are as follows[9] and [33]:
- 1.
- Increased public awareness and commitment for the adoption and application of green technology through advocacy programs.
- 2.
- Widespread availability and recognition of green technology in terms of products, appliances, equipment, and systems in the local market through standards, rating and labeling programs.
- 3.
- Increased foreign and domestic direct investment in green technology manufacturing and services sector.
- 4.
- Expansion of local research institutes and institutions of higher learning to expand research, development and innovation activities on green technology towards commercialization through appropriate mechanisms New RE act and Feed-in Tariff (FiT) mechanism to be launched.
- 5.
- New RE act and FiT mechanism to be launched.
4. Energy scenario in Peninsular Malaysia
Malaysia; being a growing industrious country, is expected to have continuous rise in energy demand and with GDP growth [21] and [34]. From total supply figures, most of power plants are located in Peninsular Malaysia due to the higher population density and it has high number of industrial areas than those in eastern Malaysia (Sabah and Sarawak).
Sensitivity studies conducted by various creditable agencies show that the GDP growth in Peninsular Malaysia is estimated to be 5.5% in 2013 and expected to increase to 5.7% by 2014. The long term GDP growth is estimated to be 5.9% per annum (p.a.) from 2016 until 2020 and then increase to 6.2% p.a. from 2021 until 2030 as shown in Table 2.
- Table 2.Projected GDP growth for year 2014–2030 [1].
- Source: Energy Commission Report 2012.
4.1. Electricity supply and generation capacity
The total installed capacity in Peninsular Malaysia was 24,242 MW in 2011 and 24,309 MW in 2012. The total electricity consumption for 2011 and 2012 were 97,939 and 102,174 GWh respectively. The maximum peaks of demand were 15,476 and 15,826 MW in 2011 and 2012, respectively.
As of 31st December 2012, the total installed capacity was 21,749 MW, while electricity gross generation was 117,797 GWh. The highest peak demand was recorded on 20th June 2012, which was 15,826 MW [1].Fig. 5 depicts the Peninsular Malaysia׳s electric production, peak demand and energy mix from 2010 to 2012. The total generation capacity is higher than the peak demand for the three years under consideration (2010–2012), this indicates that there is high reserve margin in the electricity sector. A 3.6% increase demand in 2012 compared to 2011 resulted in decrease in the reserve margin which was 41% in 2011 and 37.4% in 2012 [30]. This situation signals that a significant decrease reserve margin may occur in the future.
- Fig. 5.Electricity production and peak demand.
4.2. Electricity consumption trending
The electricity consumption pattern in Peninsular Malaysia for 2012 is presented in Fig. 6. The sectors with the highest consumption are the commercial, residential, agriculture and transport sectors, in that order[1] and [16].
- Fig. 6.Electricity consumption by sector [16].
Historically, industrial sector contributed towards the largest percentage in total electricity sales and has grown largely by 13% p.a. between 1980 and 2000 and 2.9% p.a. between 2000 and 2011. In terms of sectorial sales, industrial sales growed moderately at 3.9% in year 2013, and by 3.5% in year 2014. Commercial sector sales is expected to grow at an average of 4.0% for the next two years while domestic sales growth is anticipated to linger around 3.9%. Based on the latest electricity demand performance and current economic trends, an average electricity sales growth of 4.0% per annum (p.a) is forecasted for 2012–2015 period. The electricity sales are forecasted to reach 129,482 GWh in the year 2020. The electricity generation and peak demand are both projected to grow at the averages of 3.5% p.a. and 3.7% p.a., respectively during the above period [1].
4.3. Long term energy mix forecast
The long term load forecast, also known as demand forecast plays a central role in the power system planning and generation development plan. Usually, forecast load is up to 20 years ahead and it׳s conducted on annual basis with mid-year revision, which is in line with the License Condition and Malaysian Grid Code [1] and [35].
As for the fuel types in the energy mix, gas usage is expected to decrease due to the retirement of several gas plants, which is to commence by 2016. It will further decrease in 2019 to 32%, where coal will make up 64% of the overall mix and overtakes gas as dominant fuel. The pattern of the mix shows that gas usage decreases over time and will constitute only 27% of the overall mix by the year 2022 [1].
Generation development plan studies are carried out from time to time to continually evaluate the recommendation in planning for future capacities. Established analytical tools are used extensively to carry out simulations to incorporate all important parameters such as fuel price, fuel mix, technology employed and demand profile.
The forecasted generation mix for Peninsular Malaysia based on the approved Generation Development Plan is shown in Fig. 7[1]. Unstable electricity pricing was expected due to volatility of coal price and supply[19], as well as the consideration to gradually raise the gas price until it reaches the market price of RM44.36/mmBtu [1]. The plan proposed a system interconnection with Sarawak with the aim of ensuring balance fuel mix and stabilized electricity price [20].
- Fig. 7.Forecasted generation mix (2013–2022) [19].
In order to have a balanced fuel mix, commencement of Sarawak interconnection is targeted to begin by 2020 and this may reult in less coal usage. The share of hydroelectricity in the fuel mix is forecasted to be consistent at a growth rate of 4% due to the addition of new plants with total capacity of 937 MW from 2015 to 2022.
Another plan is to consider nuclear as new source in the energy mix as stated in the new energy policy. Nuclear energy is at present the only energy technology with a secure base load electricity supply and no GHG emissions that has the potential to expand at a large-scale. However, since Fukushima nuclear accident of Japan, nuclear energy has been under increased public scrutiny. Germany has implemented a drastic transformation of the position of nuclear energy in the country, a position which is believed to have some political influence as the “post-Fukushima” German nuclear policy influences election results[26] and [36].
4.4. Expansion plan in power sector
As of 31st December 2012, the installed capacity in Peninsular Malaysia was 21,749 MW, primarily fueled by natural gas, coal and supplemented by hydro (Table 3).
- Table 3.Installed capacity by energy source type [1].
- Source: Energy Commission Report 2012.
The expansion plans involve the expansion of existing power plants, and consideration of new energy source via new construction. The expansion program is important to cater for imminent capacities retirement and system growth. It is revised, evaluated and recommended to the government on annual basis by an approval committee called JPPPET [1].
There are currently 12 new plants under construction and 3 extension project scheduled to be connected to the grid between 2015 and 2024. The new and extension projects are listed in Table 4 and Table 5, respectively.
- Table 4.New generation projects.
- Source: Energy Commission Report 2012.
- Table 5.Power extension projects.
- Source: Energy Commission Report 2012.
The new coal capacity will increase by 2 GW in 2017, while six new hydro projects are expected to be connected to the national grid by 2024. The combined installed capacity of hydro is 981 MW. Data fromTable 4 and Table 5 show that natural gas and coal will maintain their roles as the primary fuels that drive the Malaysia׳s electricity sector. It is expected that the combined capacity (from new and extended projects) will be over 4 GW by 2020. It is clear that the government wants to further the development of conventional power plants whose fuels are readily available despites its pledge to reduce carbon emission. However, the environmental impacts of energy generation, power plants construction and operation are enormous. The next section presents the environmental impacts of Malaysia׳s energy use and her effort towards greener production.
5. Renewable resources for greener energy production
In 2008, the CO2 emission of Malaysia was about 118 million tones and the per capita carbon emission was 7.2 tones [37]. Fig. 8 shows the CO2 emission of Malaysia in the last 26 years. The CO2 emission has been on the increase from the 1990s until now [24]. Until drastic majors are taken, the government of Malaysia may not be able to cut down its carbon emission to the environment as announced.
- Fig. 8.Malaysia׳s CO2 emission (1980–2006) [26].
The total environmental impacts of electricity generation due to CO2, SO2, and NOx emission from electricity generation in Malaysia have been estimated by Ref. [38]. The pollution intensity of CO2 is estimated to increase from 298, 339 kt in 1999 to 800, 519 kt by 2020. The CO2 pollution intensity will be tripled. For SO2, the emission intensity is stable. It is has been estimated to increase by 21% from 1999 (3159 kt) to 2020 (3840 kt). The SO2 emission profile is expected to increase from 2445 kt (in 1999) to 18,316 kt (in 2020). This shows that the environmental loading or global warming potential of Malaysia׳s electricity generation technologies are enormous. There is the need to tap into clean energy potentials of the country in order to achieve its target on reduction of carbon emission.
The power sector of Malaysia is still very much dependent on fossil fuels and with the ever-increasing energy demand, it is inevitable that CO2 emission will continue to climb as long as fossil fuels remain the main contributor in the country׳s energy mix [13]. Emphasis on green technology is promoted in the 9th Malaysia Plan (2006–2010) and efforts on the utilization of RE resources and efficient use of energy were further encouraged [1].
The establishment of the Ministry of Energy, Green Technology and Water to replace the Ministry of Energy, Communications and Multimedia in early 2009 may reflect Malaysia׳s commitment in driving the message that ‘clean and green’ is the way forward towards creating an economy that is based on sustainable solutions [13]. Some of the progresses made in adding renewables into Malaysia׳s energy mix are presented in the subsequent parts of this paper.
5.1. Potential RE source for commercial use
In Malaysia, RE sources (other than hydro) are generated on small scale basis and are mostly operated by independent power production companies. Solar, mini hydropower and biomass are untapped potential RE resources that could drive Malaysia׳s future towards sustainable and greener energy.
5.1.1. Solar
Solar energy is harnessed through the conversion of sunlight into electricity via solar cells in solar panel. This system is called Photovoltaic (PV) system. An equatorial country such as Malaysia is favorable for the development of solar energy because its climate is generally hot all year long with approximately 4000–5000 Wh m−2 daily radiation, except for monsoon season during the end of the year [18], [39], [40],[41] and [42]. Although PV system has high potential for commercial use, the cost for PV panel and technologies is still high for mass power generation [17] and [19]. The cost of solar electricity is 20 times higher than the conventional fuels. At present, PV application is still restricted to rural electrification, garden lighting, and water heating in hotels and upper-class urban home.
The funding of research in the areas of solar energy by the Malaysian Government has been quite encouraging. Research groups at some of the five research Universities in Malaysia have been involved in solar energy research like inverters, PV concentration, solar cells fabrications and characterization, hybrid systems and energy conversion tracking systems. Some of the works undertaken by researchers in local universities are
- 1.
- 2.
- 3.
- 4.
- Development of low-coast solar water heater by researchers at Universiti Teknologi MARA (UiTM)[53].
An important issue that has slowed down the development of solar energy in Malaysia is that there is only one buyer i.e., the national utility company (TNB) and this has resulted in an unequal bargaining position of utility and solar energy projects (and other REs) [54]. An analysis of the way forward for solar PV in Malaysia by Muhammad-Sukki et al. [55] found that Feed-In Tariff (FiT) scheme has the potential to increase solar PV penetration and the Green Technology Financing Scheme (GTFS) is potentially a good source of funds for companies while for home owners, a soft loan facility with an interest rate of 5% is a possible source of funds for financing solar energy program.
In 2005, the Malaysian Building Integrated Photovoltaic Technology (MBIPV) project was launched with the primary target of encouraging long term cost reduction. The Building Integrated Photovoltaic (BIPV) panels are all integrated into building design to provide electricity for building. It is also connected to the national electricity grid to help feed peak power demand during peak daylight hours. Until 2010, PV systems have contributed only 0.4 MW to the national grid. The unit cost of PV installations and PV system has dropped by 16% in average since BIPV was introduced [13]. Comparing the contribution of solar in the national energy mix to the potential (Table 1), it is clear that Malaysia still has a lot to do in terms of utilizing its solar potential. However, solar energy is expected to surpass other RE sources by 2020 if the price continues to decrease and the technology becomes more cost friendly for commercial use [30].
5.1.2. Municipal solid waste (MSW)
MSW in Malaysia involves the disposal of wastes to landfills. The local authorities and waste management consortia handle approximately 17,000 tones of MSW everyday throughout the country. Biogas energy generation from MSW is an effective and profitable method for solid waste disposal. Jana Landfill Gas (LFG) power generation is the first MSW power station connected to the national grid. The 2 MW power plant is located at a landfill area (Air Hitam Sanitary Landfill) and receives about 3000 tones of daily domestic wastes from major parts of Klang Valley. Jana LFG power plant is planned to be expanded due to its potential to produce energy for a period of 20 years [56] and [57]. With rapid population growth, it is estimated that the amount of MSW can reach 9 million tons per year by 2020. From that figure, average MSW generated on daily basis is 24,650 tones; which has the potential to generate 500 MW of electricity[18] and [58].
5.1.3. Biomass
Biomass energy in Malaysia is generated from agricultural waste product, such as oil palm waste, wood waste and paddy residues. The palm oil industry contributes the largest amount of biomass energy in Malaysia with total generation capacity of 211 MW in 2012. Oil palm has good potential in producing biomass energy due its calorific contains. With 50% efficiency, it can generate 8 Mtoe of energy, and can save RM 7.5 billion per year of crude oil [34] and [59]. At present, biogas energy is generated at the oil palm mill for its own use [60] and [61]. Biomass and biogas plants have estimated potential to achieve 1340 MW of power production by 2030 and can be connected to national grid.
5.1.4. Mini hydro
Small scale hydro has become popular alternative compared to bigger scale hydroproject because of their lower cost, reliability and environmental friendliness. Since the late 1970s, many mini hydroprojects have been undertaken based on run-of-the-river systems ranging from 0.5 to 1 MW capacity [30]. As of 2012, there are 39 units of mini hydro plants with total capacity of 16.186 MW in Peninsular Malaysia [18]. The targeted installed capacity for mini hydro is 490 MW by 2020 under the Malaysia renewable energy development plan. Mini hydro has the prospect to reduce the environmental loading of Malaysia׳s energy usage if its potential is fully utilized.
5.2. ASEAN-5 renewable energy scenario
Association of Southeast Asian Nations (ASEAN) is made up of to 10 member countries located in South East Asia. ASEAN countries are composed of two parts, namely, northern and southern areas. The northern part includes Laos, Vietnam, and Cambodia, whereas the southern part includes Thailand, Malaysia, the Philippines, Indonesia, Singapore, and Brunei [62].
Renewable Energy sources are abundantly available in most of the member countries of ASEAN. Among the ASEAN countries, Philippines, Indonesia, Malaysia, Thailand and Vietnam are blessed with most of the types of renewable energy sources [63] such as solar, hydropower, biogass/biomass and geothermal energy. In this paper, ASEAN-5 refers to the above mentioned countries. Fig. 9 below shows the potential of RE sources in ASEAN-5 based on data from International Energy Agency (IEA) in 2010 [64].
- Fig. 9.Potential of RE in ASEAN-5 [65].
Each country of ASEAN-5 strives to utilize RE resources in their energy production industries. In a report by Ipsos Business Consulting [65], the existing capacity and target capacity (in MW) is depicted through Table 6.
- Table 6.Existing and targeting renewable energy capacity.
In its special report in 2013, the IEA states that Southeast Asia is ‘an extremely diverse and disparate region with vast differences in the scale and patterns of energy use and energy resources׳. Hence, energy related study (including renewables) between Southeast Asian countries should recognize the differences as an important deliberation in the analysis. Ipsos report also described the RE situation in ASEAN as a presentation of ‘mixed bag’ because of different stages in RE development in each country, down to the individual RE sources available within each country. In 2012, Ipsos reported that only Phillipines and Thailand has succeeded in fully commercializing RE through geothermal and solar power respectively [65]. Malaysia has shown significant achievement in its Renewable Energy Program. The success of FiT program is expected to help Malaysia achieve the target of fully commercializing most of its RE resources.
5.3. Progress of renewable energy programs (2011–2013) in Malaysia
After the Five Fuel Policy, which encouraged inclusion of RE into the energy mix, various RE programs were conducted and improved from time to time in order to increase RE contribution in the energy mix [66]. Several programs and initiatives were launched to promote RE utilization such as Small Renewable Energy Power (SREP), Biomass Power Generation and Demonstration (BioGen) Project and Malaysia Building Integrated Photovoltaic Technology Application (MBIPV) [31] and [35].
Ref. [67] examined the Small Renewable Energy Power (SREP) performance from 2001 to 2010. Sovacool and Drupady [67], note that SREP failed to achieve its target because of capacity caps, lengthy approval process, lack of monitoring and unmatched electricity tariffs with the production costs. This study led to more comprehensive study in 2011, where key barriers for RE development in Malaysia were identified. The new study found that shortage of investment and manpower, lack of interest from commercial investors, and lack of technical know-how has led to poor performance of RE plants [34].
To improve RE performance, several resolutions were proposed to remove the key barriers through comprehensive policy, political and social support to RE energy provider. The Renewable Energy Act was enacted in 2011 to establish and implement feed-in-tariff (FiT) system for RE generated electricity, in which access to power grid is guaranteed and individual can sell the power generated by RE resources to power companies at premium rate for a specific period. Financial support is also granted to the RE producers to enhance the promotion of RE in Malaysia. By 2030, renewable resources are expected to provide 11% of the energy mix [18] and [35].
Current policy under FiT scheme shows positive results in 2012 and 2013 as shown in Table 7[67]. The RE annual power generation has significantly increased, showing promising future for RE in Malaysia.
- Table 7.RE achievement (2012 and 2013).
- Source: Sustainable Energy Development Authority (SEDA) Malaysia.
Success in FiT scheme can be attributed to the incentives, financial schemes and funds provided by Malaysia׳s government. Under Ninth Malaysia Plan budget, incentives were given to companies who generate energy from RE based on three categories; energy efficiency incentives, incentives for the use of RE resources and incentives for green building [32]. Because of slow development, funding for RE was further increased under the Tenth Malaysia Plan. RE fund was specially established under FiT Project, as well as other schemes such as Renewable Energy Business Fund (REBF), Green Technology Financial Scheme (GTFS) and Renewable Energy and Energy Efficiency Scheme. The special allocation of funds for RE development resulted in the increase in contribution of RE in the energy mix, thus help Malaysia to expand her power production.
6. Nuclear as new potential source for future power expansion
The 10th Malaysia Plan highlighted the willingness of the government to add nuclear to its energy mix. Nuclear is one of the electricity generation technologies with low GHG emission, and on a life-cycle basis the GHG emission of nuclear power plants is comparable with that of hydro and wind [68].
Nuclear energy has existed for many decades and it has long been considered as the only form of energy that can replace fossil fuels adequately. Most developed countries such as USA, Russia, Japan and Korea have nuclear reactors as part of their energy mix. More countries of the world are increasingly hanging their electricity fate on nuclear, with about 30 countries, mostly industrialized, relying on it, and more are preparing towards having their pioneer nuclear power plant . Though, the Fukushima nuclear accident which occurred as a result of an earth quake and subsequent tsunami inundation of TEPCO׳s nuclear power plant in Fukushima- Daiichi has resulted in public scrutiny of atomic energy. Some prominent environmentalists have thrown their supports behind the continued use of nuclear power now that the threat of global warming seems to be more detrimental.
As at the end of August 2010, 441 nuclear plants were operating in 29 countries, with an installed 375 GW, which is equivalent to 14 per cent of global electricity needs and some developing countries have contacted the International Atomic Energy Agency (IAEA) for assistance on their nuclear plans [68]. In southeast Asia, countries such as Thailand, Indonesia, Vietnam and Malaysia have plans for pioneer nuclear program.
In Malaysia, of the three main sources for power generation (coal, gas and hydro), it is expected that the gas supply to the power sector may not go beyond 2030. To cover for the shortfall in gas supply, coal fired electricity generation may need to be increased. This is not an attractive option, given that almost 100% of the national coal supply is imported [13], and this will expose Malaysia to interruption in supply and increases in cost of coal. Hence, government adopted a more environmentally friendly approach which is economically competitive.
The decision to consider adding nuclear was made by policy makers in July 2009 after careful consideration of energy forecast demand and current energy situation in the country [69]. Nuclear has been favored because of its economic competitiveness and low GHG emission [18]. The Malaysian government has decided to include nuclear energy as an option in the new energy policy in 2010. This is due to the realization that the available national energy resources are inadequate to guarantee supply beyond the year 2030 [1] and [69]. The estimated contribution of nuclear in the 2008 fuel mix projection by TNB is shown in Fig. 10.
- Fig. 10.Energy fuel mix projection (2008) [69].
In December 2010, the government announced plans to build two 1000-MW nuclear power plants by 2022; and this was followed by establishment of the Malaysian Nuclear Power Corporation (MNPC), which will lead the planning process of utilizing nuclear power in Peninsular Malaysia [18]. Fig. 11 shows the proposed development timeline by MNPC [70].
- Fig. 11.Proposed nuclear power program development by MNPC [70].
MNPC, in cooperation with more than a dozen other governmental agencies and industrial organizations, had conducted a series of studies to systematically examine the role of nuclear power in Malaysia and to evaluate the national state-of-preparedness for the implementation of nuclear power program in Malaysia[17]. Currently, Malaysia is in the preliminary evaluation phase, where activities such as pre-feasibility study, policy study, regulation revisit and potential site selection are actively conducted (Fig. 11). The construction of the first nuclear reactor is expected to commence in 2017. The cost implication of building the twin unit (of 1 GW each) is estimated to be RM 21.3 billion investment up to the year 2020.
There are some critical issues over the state of readiness of Malaysia to adopt nuclear power. The main concerns have always been the nuclear waste disposal, NPP decommission issues, and possible risks and hazards of NPP. In the wake of Japan׳s nuclear crisis in 2011, certain countries opted to freeze and forgo plans to build nuclear power plant [70] and [71]. Malaysia has critically observed the situation and reviewed the current progress after the incident, which gives valuable information for the feasibility studies. The post-Fukushima nuclear program in Malaysia is relatively slow because the government is under public pressure to carefully reconsider safety and security factors based on the information obtained from the Japanese incident.
From the timeline (Fig. 11), this is the year to officially launch nuclear power program. However, the government is yet to do that because a lot more has to be done in order to assess public sentiment towards nuclear program before the launching of the program and proceeding to the construction phase of the plan.
7. Conclusion
This study presents an overview of the Malaysia energy sector, the energy policy revolution and the power sector expansion strategy towards secure sustainability. The current and future scenarios of power sector in Malaysia have been highlighted. From comparison of historical energy consumption with long term energy forecast, the development in the power sector was depicted and two key points were identified to secure future power supply in Malaysia. First, diversification of energy sources in the energy mix is important to maintain stable energy production. Second, improvement of the energy policy, implementation of new energy policy, power expansion plan and consideration of new energy source must be regularly revised to avoid dependency on individual energy source and provide sustainable power generation.
Expanding and upgrading the existing power plants is the best solution to fulfill power demand in a short term period. However, for longer term, Malaysia needs stable supply of energy sources in the energy mix. Renewable energy is one of the best alternatives that will play vital roles in Malaysia׳s energy mix in the future due to the abundance of renewable energy resources in Malaysia. The contribution of RE to the mix has improved after the implementation of FiT scheme, while nuclear energy is still under careful consideration by the government.
It is clear that further development of depleting fossil resources (like coal, gas and oil) for electricity generation in Malaysia will result in more emission of GHG and will hinder Malaysia from achieving its target of reducing carbon emission to the environment. To achieve this target, the government has to reconsider its power sector expansion plan which favors the use of more coal and gas as fuel for electricity generation.
Acknowledgments
We would like to thank the Ministry of Higher Education, Malaysia (MOHE) and Universiti Teknologi Malaysia for providing a research grant (GUP – Q.J.130000.7126.03H67) and Zamalah scholarship for this research. This work was also supported by the Research Management Center (RMC) of Universiti Teknologi Malaysia through its Post-Doc Fellowship for the third author, under the research grant (Q.J130000.21A2.01E98).
References
- [2]
- A review on energy scenario and sustainable energy in Malaysia
- Renew Sustain Energy Rev, 15 (2011), pp. 639–647
- | | |
- [4]
- Electricity consumption–growth nexus: the case of Malaysia
- Energy Policy, 38 (2010), pp. 606–612
- | | |
- [5]
- A review on existing and future energy sources for electrical power generation in Malaysia
- Renew Sustain Energy Rev, 16 (2012), pp. 4047–4055
- | | |
- [6]
- Electricity energy outlook in Malaysia. IOP Conference Series: Earth and Environmental Science
- IOP Publishing (2013), p. 012126
- [7]
- Environmental impact assessment of a new nuclear power plant (NPP) based on atmospheric dispersion modeling
- Stoch Environ Res Risk Assess (2014), pp. 1–15
- [8]
- An econometric study on long-term energy outlook and the implications of renewable energy utilization in Malaysia
- Energy Policy, 36 (2008), pp. 890–899
- | | |
- [9]
- Renewable energy policies and initiatives for a sustainable energy future in Malaysia
- Renew Sustain Energy Rev, 15 (2011), pp. 4780–4787
- | | |
- [11]
- Greener energy solutions for a sustainable future: issues and challenges for Malaysia
- Energy Policy, 31 (2003), pp. 1061–1072
- |
- [13]
- Energy policy and alternative energy in Malaysia: issues and challenges for sustainable growth
- Renew Sustain Energy Rev, 14 (2010), pp. 1241–1252
- | | |
- [14]
- A review on sustainable power generation in Malaysia to 2030: historical perspective, current assessment, and future strategies
- Renew Sustain Energy Rev, 29 (2014), pp. 952–960
- | | |
- [17]
- Energy for sustainable development in Malaysia: energy policy and alternative energy
- Energy Policy, 34 (2006), pp. 2388–2397
- [18]
- A review on existing and future energy sources for electrical power generation in Malaysia
- Renew Sustain Energy Rev, 16 (2012), pp. 4047–4055
- | |
- [21]
- A review on energy scenario and sustainable energy in Malaysia
- Renew Sustain Energy Rev, 15 (2011), pp. 639–647
- | | |
- [22]
- Energy for sustainable development in Malaysia: energy policy and alternative energy
- Energy Policy, 34 (2006), pp. 2388–2397
- [24]
- Current energy usage and sustainable energy in Malaysia: a review
- Renew Sustain Energy Rev, 15 (2011), pp. 4370–4377
- | | |
- [25]
- Energy policy and alternative energy in Malaysia: issues and challenges for sustainable growth
- Renew Sustain Energy Rev, 14 (2010), pp. 1241–1252
- | | |
- [26]
- Nigeria electricity crisis: power generation capacity expansion and environmental ramifications
- Energy, 61 (2013), pp. 345–367
- [27]
- The Future of Hydro Power in Malaysia. JURUTERA Bulletin. Petaling Jaya
- Inst Eng Malays (2005), pp. 32–33
- |
- [28]
- Current energy usage and sustainable energy in Malaysia: a review
- Renew Sustain Energy Rev, 15 (2011), pp. 4370–4377
- | |
- [29]
- A review on sustainable power generation in Malaysia to 2030: historical perspective, current assessment, and future strategies
- Renew Sustain Energy Rev, 29 (2014), pp. 952–960
- | | |
- [30]
- Feed-in tariff outlook in Malaysia
- Renew Sustain Energy Rev, 15 (2011), pp. 705–712
- | | |
- [31]
- Renewable energy policies and initiatives for sustainable energy future in Malaysia
- Renew Sustain Energy Rev, 15 (2011), pp. 4780–4787
- | | |
- [33]
- Review on Malaysia׳s national energy developments: key policies, agencies, programmes and international involvements
- Renew Sustain Energy Rev, 14 (2010), pp. 2916–2925
- | | |
- [34]
- Current perspective of the renewable energy development in Malaysia
- Renew Sustain Energy Rev, 15 (2011), pp. 897–904
- | | |
- [36]
- Media reporting and changes in public opinion after Fukushima nuclear accident: Belgium as case study
- Int J Nucl Gov Econ Ecol, 3 (2012), pp. 291–307
- | |
- [37]
- Spatial Analysis of the Air Pollutant Index in the Southern Region of Peninsular Malaysia Using Environmetric Techniques
- A.Z. Aris, T.H. Tengku Ismail, R. Harun, A.M. Abdullah, M.Y. Ishak (Eds.), From Sources to Solution, Springer, Singapore (2014), pp. 307–312
- | |
- [38]
- Emissions from electricity generation in Malaysia
- Renew Energy, 27 (2002), pp. 293–300
- | | |
- [39]
- Solar energy in Malaysia: current state and prospects
- Renew Sustain Energy Rev, 16 (2012), pp. 386–396
- | | |
- [41]
- Solar energy outlook in Malaysia
- Renew Sustain Energy Rev, 16 (2012), pp. 564–574
- [42]
- A new approach for predicting solar radiation in tropical environment using satellite images-case study of Malaysia
- WSEAS Trans Environ Dev, 4 (2008), pp. 373–378
- [43]
- Performance of grid connected inverter with maximum power point tracker and power factor control
- Int J Power Electron, 1 (2008), pp. 49–62
- [47]
- The effect of etching time of porous silicon on solar cell performance
- Superlattices Microstruct, 50 (2011), pp. 647–658
- [48]
- Effect of silicon porosity on solar cell efficiency
- Int J Electrochem Sci, 7 (2012), pp. 376–386
- [49]
- New optical features to enhance solar cell performance based on porous silicon surfaces
- Appl Surf Sci, 257 (2011), pp. 6112–6117
- [55]
- Solar photovoltaic in Malaysia: the way forward
- Renew Sustain Energy Rev, 16 (2012), pp. 5232–5244
- [56]
- Assessment of municipal solid waste generation and recyclable materials potential in Kuala Lumpur, Malaysia
- Waste Manag, 29 (2009), pp. 2209–2213
- [57]
- Municipal solid waste management in Malaysia: Practices and challenges
- Waste Manag, 29 (2009), pp. 2902–2906
- [58]
- Energy potential from municipal solid waste in Malaysia
- Renew Energy, 29 (2004), pp. 559–567
- [59]
- Utilization of oil palm as a source of renewable energy in Malaysia
- Renew Sustain Energy Rev, 12 (2008), pp. 2404–2421
- [60]
- Oil palm biomass as a sustainable energy source: a Malaysian case study
- Energy, 34 (2009), pp. 1225–1235
- [61]
- Feasibility study of performing a life cycle assessment on crude palm oil production in Malaysia
- Int J Life Cycle Assess, 12 (2007), pp. 50–58
- [62]
- Renewable energy in five South East Asian countries: review on electricity consumption and economic growth
- Renew Sustain Energy Rev, 26 (2013), pp. 506–514
- [63]
- ASEAN towards clean and sustainable energy: Potential, utilization and barriers
- Renew Energy, 32 (2007), pp. 1441–1452
- [64]
- Trends and Potentials
- International Energy Association (IEA), Paris (2010)
- [66]
- Examining the small renewable energy power (SREP) program in Malaysia
- Energy Policy, 39 (2011), pp. 7244–7256
- [68]
- First nuclear power in Nigeria: an attempt to address the energy crisis?
- Int J Nucl Gov Econ Ecol, 4 (2013), pp. 1–10
- [69]
- Alternative energy in malaysia beyond 2020 – the need for nuclear power
- Prog Nucl Sci Technol, 3 (2012), pp. 164–167
- [71]
- Green waste to biogas: renewable energy possibilities for Thailand׳s green markets
- Renew Sustain Energy Rev, 16 (2012), pp. 5423–5429
Copyright © 2014 Elsevier Ltd. All rights reserved.
