Cross-border RE trade a regional catalyst - MIDA | Malaysian Investment Development Authority
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Cross-border RE trade a regional catalyst

Cross-border RE trade a regional catalyst

29 Aug 2023

The government has decided to allow the cross-border renewable energy (RE) trade to help spur the development of the RE industry alongside the region.

Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad said the cross-border trade of RE is part of a two pronged-strategy for the country to capitalise and explore new higher-value RE demand in neighbouring countries.

“This will enable us to offer and enjoy greater grid flexibility with higher RE integration under the Asean Power Grid or APG initiative.

“Certainly, the APG is a goal worth pursuing. As a multilateral undertaking, its achievement would result in a totally integrated South-East Asian power grid,” Nik Nazmi said at the opening of the Energy Transition Conference 2023 organised by Tenaga Nasional Bhd (TNB) here yesterday.

“It would promote interconnectivity across the 10 Asean member countries with our combined population of more than 670 million, allowing for cross-border electricity trade across the region,” he added.

Nik Nazmi said the government had invited energy players, especially TNB, to continue and facilitate the discovery of new and renewable sources of energy across the nation and its borders.

“Cross-border RE trading will be part of Malaysia’s contribution to the creation of the APG and, one would argue, towards strengthening Asean integration as a whole,” he said.

He had said the country could be a hub for RE exports since it is geographically located in the centre of Asean.

The government had lifted the ban on the export of RE in May which will allow the trading of excess RE with neighbouring countries.

“Asean is an integral part of Malaysia’s future, and hence, it is crucial for us to achieve a just and comprehensive energy transition as an interconnected region, with the APG as a key component of this,” he said.

“The realisation of an integrated regional grid with high shares of RE hinges on providing a smart, flexible and robust grid system and infrastructure,” he added.

He also urged TNB to continue on its effort in modernising and digitalising the national grid by drawing on its extensive experience in grid development and management.

On another note, he said the government would explore developing green hydrogen as a fuel alternative.

The initiative to develop the hydrogen economy would be driven by the National Energy Transition Roadmap and the Hydrogen Economy and Technology Roadmap, which is targeted for rollout later this year.

“This includes how we can attract investments towards its production and ultimately pave the way for Malaysia to become a main export hub for green hydrogen by 2027.“The federal government, in collaboration with state governments and utilities like TNB, is excited to explore the prospects of harnessing a new energy carrier and the knock-on economic effects it would bring,” he added.

Green hydrogen is derived from water electrolysis using RE or a low-carbon power source.

The splitting of water molecule produces hydrogen which can be used as a clean power source and oxygen as a byproduct.

The government will soon table the Energy Efficiency and Conservation Act (EECA) in the upcoming parliamentary sitting, according to Nik Nazmi.

“The EECA bill has been in the works for many years, and we hope that it will catalyse commercial competitiveness while encouraging environmental stewardship for residential and industrial consumers.“It will require the biggest users of electricity to do energy audits and more requirements of a building of a certain size to do such energy (efficiency) audits. But for residential consumers they will not be required to do so,” Nik said on the sidelines of the conference.

He pointed out that the overall energy transition of the country should be looked at from a wholesome manner and not only from the number of electric vehicle (EV) sales.

“It should also take into account public transport, personal mobility vehicles and logistics.

“Intrinsically linked to the concept of smart cities is green mobility. The government has committed to developing the EV industry strategically. We are also examining the existing procedures for approving EV charging systems to reduce the time in processing the installation approval.

“The EV market is forecast to grow exponentially over this decade, and this presents us with a timely opportunity to capitalise on a high-value, green economic sector,” he said.

Under the Low Carbon Mobility Blueprint 2021 to 2030, the government is on track to achieve its target of 10,000 public charging stations in the country by 2025 and some 1.5 million EVs by 2040.

Meanwhile, TNB chairman Datuk Abdul Razak Abdul Majid said that the global energy system transition is well underway but the path is not without its challenges.

“While we strive towards balancing the energy trilemma of security, sustainability and affordability, there is another missing component that looks at equity and inclusiveness of our transition – ensuring that no one is left behind,” he said at the conference.

Abdul Razak also pointed out that TNB’s strategy to support the country’s net-zero aspirations through three strategic areas included concerted planning on generation decarbonisation, enabling a flexible RE, cross-border grid exchanges and empowering cross-sectorial electrification.

Meanwhile, CEO of the Sustainable Energy Development Authority, Malaysia Datuk Hamzah Hussin said potential reforms in the electricity market to enable greater competition, transparency and flexibility would benefit the industry as a whole.

“This includes the unbundling of generation, transmission and distribution segments of the market that allows for more independent power producers and retail suppliers,” Hamzah said at the dialogue session entitled Forward-thinking policies and regulations that shape the energy transition.

“The market reforms should also ensure that RE sources be given priority access and dispatch to the grid.

“Grid operators should also be adequately compensated for their services. The reforms should also promote consumer choice and empowerment by allowing consumers to switch suppliers, install rooftop solar panels or other distributed generation systems or take part in demand-response programmes or peer-to-peer trading platforms,” he added.

He also noted that consumers should have access to real-time information on electricity consumption and prices.

“By reforming the market, the government can increase the efficiency and reliability of electricity systems – and lower the costs of electricity for consumers and producers,” he added.

Source: The Star