The Government is aiming to increase the generation of renewable energy as part of the energy supply mix for the future. According to the Sustainable Energy Development Authority (SEDA), the target for renewable energy generation should reach 985 MW or 5.5% by 2015 and 2080 MW or 11% by 2020. The Feed-in-tariff (FiT) mechanism has been introduced as one of the measures to achieve this goal where producers are given attractive premium rates to generate renewable energy either from solar, biomass/biogas, or mini hydro sources.
For the period Jan – Dec 2014, a total of 70 projects in renewable energy with total investments of RM1.22 billion were approved incentives, of which RM1.16 billion were from domestic sources (95%) and RM55.4 million were from foreign (5%). These projects are expected to create 743 employment opportunities in this sub-sector. In comparison, for 2013 a total of 51 projects in renewable energy were approved incentives with total investments of RM1.73 billion.
For those investments in renewable energy projects approved with incentives in 2014, 55 projects (RM348.5 million) will generate energy from solar source, 4 projects (RM103.6 million) from biomass, 1 project (RM440 million) from combination of both biomass & biogas, 7 projects (RM79.3 million) from biogas, and 3 projects (RM247 million) from mini hydro energy generation.
As the price of energy steadily increases and with the Government’s policy of moving away from fuel (energy) subsidies, there is a need to adopt energy efficiency measures to save consumption and expenditure on energy. The Government has been introducing several measures like incentives to encourage the use and adoption of energy efficiency systems and technology, and import duty exemptions on qualified machines and components. Encouraging energy efficiency activities also opens the door of opportunities for energy services companies (ESCO) to be able to provide services to potential clients.
For the period Jan – Dec 2014, a total of 7 projects in energy efficiency with total investments of RM59.0 million were approved incentives. Almost all investments totaling RM58.3 million (99%) were from domestic sources and RM642,511 (4%) were from foreign sources. These investments are expected to provide 69 employment opportunities in the sub-sector. In comparison, for year 2013 a total of 16 projects in energy efficiency were approved incentives with total investments of RM31.7 million. Publicity efforts need to be intensified to make industry players understand and realise the need to adopt energy efficiency practices to stay competitive in business.
Projects in energy efficiency approved incentives were mainly in manufacturing sector with total investments of RM17.6 million comprising of 3 projects. The remaining energy efficiency projects approved with incentives were mostly by companies in services sectors.
Green Technology Incentive
Budget 2014 had announced for the provision of green investment tax allowance for the purchase of green technology assets and income tax exemption on the use of green technology services and system to further strengthen the development of green technology.
Application for incentive is to be submitted to MIDA for green technology projects and services, and to Malaysian Green Technology Corporation (MGTC) for purchase of green technology assets as listed in MyHijau Directory, by 31 Dec 2020. Qualifying activities for green technology incentive include renewable energy, energy efficiency, green building, green data centre and waste management.