Timely to go big in renewable energy
28 Oct 2020
Malaysia is blessed with abundant renewable resources and with prevailing low crude oil price that has been a double whammy for producing countries, perhaps it is high time to go big into renewable energy (RE) space and balance the revenue base.
The supply of RE, solar in particular, has been growing in Malaysia with the support of policies that have led to rounds of fresh investments in rooftop solar cells, whether for commercial or residential and utility-scale solar farms.
Besides being a tropical and sunny country, Malaysia is also gas-rich, and natural gas is the only fossil fuel predicted to grow in the decades to come because of its multiple uses such as electricity generation and petrochemicals and with lower environmental impact than coal and crude oil.
Malaysia aims to achieve 20 per cent renewable fuel penetration by 2025.
It is noteworthy that Malaysia has committed to reducing its greenhouse gas emission intensity by 45 per cent of real gross domestic product by 2030 at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change in Paris in 2015.
REPLACING COAL WITH GAS
In Peninsular Malaysia, coal and gas currently contribute more than 90 per cent of total energy generated.
Malaysia’s energy policy has evolved over the years, reflecting the government’s priority in providing electricity to sustain the country’s rapid growth and developing domestic natural resources.
While power policy-making ultimately rests with government officials in the administration, operating under the authority of bills approved by Parliament, key players in the history of the development of energy infrastructure have also been state-owned enterprises like Tenaga Nasional Bhd (TNB) and Petronas.
Despite favourable background conditions, an analysis of government statistics reveals that over the years, Malaysia has become increasingly more reliant on imported coal, the dirtiest of the fossil fuels.
According to reports, coal made up 50.6 per cent of the fuels burnt to generate electricity in 2017 compared with a meagre 7.4 per cent in 1997 as a source of electricity because natural gas dominated at 63.4 per cent.
In light of this, the Institute for Democracy and Economic Affairs (IDEAS) said replacing coal with gas is a low-hanging fruit for Malaysia.
Since natural gas is also a domestically available natural resource, the extraction and production is associated with significant economic benefits compared with coal, which is mostly imported, the think tank said in its report titled “The Future of Malaysia’s Energy Mix” published recently.
However, IDEAS said substituting coal with natural gas alone will not be sufficient to ensure Malaysia mitigates the risks and capitalises on the opportunities of the global energy transition.
“The government will also need to put in place policies to ensure that Malaysia can adapt, including reducing dependencies on fiscal revenues, and seize new opportunities in new technologies,” it added.
CHALLENGES IN ENERGY TRANSITION
IDEAS said the energy transition in Malaysia still faces a number of broader challenges such as the cost of solar power has fallen dramatically but solar generation remains variable and intermittent until low-cost storage options become viable.
“Malaysia’s options for despatchable renewable are hampered by the lack of infrastructure which will take some time to address.
“Therefore, while RE capacity is growing steadily and is expected to reach 12-13 gigawatt grid installed capacity by 2030, conventional energy will still play a significant role in Malaysia’s energy supply for the coming decades.”
However, as Malaysia moves towards an RE future, the role of conventional energy will change from supplying baseload to ensuring supply stability, by smoothing the inherently variable nature of most renewables with a despatchable source.
TRANSITION INTO RE
In the long run, there will definitely be a replacement for oil and gas, but the future is in alternative energy (AE) such as natural gas, battery storage, other forms of clean energy, and even nuclear.
RE is a part of alternative energy and this will ultimately replace oil and gas.
According to industry players, RE is definitely on the cards in formulating the 12th Malaysia Plan.
Plus Solar Systems Sdn Bhd co-founder and chief executive officer Ko Chuan Zhen said the energy transition for Malaysia to clean RE from the so-called ‘dirty energy’ of fossil fuel would shape up and speed up if the 12th Malaysia Plan included specific executable strategies.
“While RE as a whole needs attention, I personally would be interested in initiatives to promote solar photovoltaic technology to meet the energy demands through the low-carbon pathway,” he told Bernama in an interview recently.
Ko noted that with a liberalised RE industry and less reliance on subsidies, as well as Net Energy Metering (NEM) 3.0 and more local players allowed to participate in large-scale solar (LSS), Malaysia would certainly see a more cohesive RE ecosystem.
“It’s a long process, and could take more than 10 years to see a real change, but when it does happen, alternative energy such as solar as well as others such as natural gas and battery storage will become the majority, way beyond oil and gas,” said Ko.
On May 31, the Ministry of Energy and Natural Resources via the Energy Commission opened a competitive bidding process for the LSS programme by Malaysia Electricity Industry to attract RE investment ([email protected]).
Ko said LSS or solar farms are one of Plus Solar’s focus areas wherein it has been actively participating in the local tender process.
“We have put in our submissions and are currently waiting for the award of [email protected] to be concluded. We are working with different developers and are confident that we are able to play a role,” he said.
To date, five successful bidders for the third round of the LSS programme (LSS3) have inked their power purchase agreements with TNB.
“Our previous successes and track records in LSS1 and LSS2 are testament to our ability to deliver projects of great quality and commission it on time,” said Ko.
Source: Bernama Posted on : 28 October 2020