Energy Market in Malaysia, opportunities abound.

Malaysia’s total energy consumption continues to grow. Per Capita consumption has increased from 1,100 KWH in 2010 to 4,460 KWH in 2014 in line with the country’s acceleration towards middle income status by 2020. The country has also seen total energy consumption grow regularly and consistently over the same period with an average of 5.1% per annum. Actual energy demand is forecast to rise from 16.9GW in 2015 to 20.3 GW in 2020. This upward trend has not been complemented by an increase in supply and so Malaysia’s reserve margin is as low as 30% as of June 2015. The Malaysian Government recognise this and plans set in motion will see an extra 10GW capacity by 2020 by building 13 new power plants and expanding 3 existing ones. This growth however has also to factor in the increasing push towards renewables as the Malaysian government has already pledged to reduce a 40% reduction in carbon emissions intensity by 2020(compared to 2005 levels). Currently large scale solar power facilities have been erected across the country including the 5MW Melaka World Solar Valley Farm, and a 10,25MW and an 8MW farms in Negeri Sembilan.

Hydro Power holds the promise

Hydro Power continues to play an increasing part in generating electricity without using fossil fuels. Government targets for this type of generation is 4% by the year 2020 with 6 new stations to come on stream by 2022. Of particular significance is the Sarawak Corridor for Renewable Energy (SCORE) which is estimated to be able to generate 20GW as more projects come to fruition. With high voltage cable connection to happen in the next ten years this capacity can be channelled into peninsular Malaysia and be really maximised in the years to come.

EPRE is Malaysia’s flagship show for power generation and transmission and will focus on all the current methods of energy generation placing much emphasis on the increasing importance of renewable energy as the landscape of energy mix changes in line with the Government’s commitment to increasing the percentage contribution from non fossil fuel sources.

No other trade show in this sector can give you that unique international content coupled with the strong local government support that will enable you to maximise on the business opportunities currently available in this fast moving energy market.

Speech by YB Senator Dato’ Sri SK Devamany S. Krishnasamy

Deputy Minister of Energy, Green Technology & Water Malaysia (KeTTHA)

Electric, Power and Renewable Energy (EPRE) Malaysia 2017

Opening Ceremony

16 March 2017

Distinguished Delegates,

Members of the media,

Ladies and gentlemen,

A warm welcome to Electric, Power and Renewable Energy 2017 (EPRE 2017) – the 12th International Exhibition of Power, Electrical and Electronic Engineering – and Selamat datang to Malaysia.

It is my pleasure and honour to be here and to say a few words to officiate this year’s show.

At the 21st session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP 21) in Paris in 2015, Malaysia was a leading negotiator for the group of developing nations. We made a commitment to reduce carbon intensity or CO2 emissions to 45% by 2030. This goal, while lofty, is not unachievable considering our huge potential RE resources in the form of biomass, solar and hydro.

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So, what have we done so far and where are we now in our RE journey? What are some measures we are taking to uphold our commitment to COP 21?

Ladies and gentlemen,

One of the silver linings that has come about as a result of the global fluctuation of oil prices, at least for the RE sector, is that alternative energy is now in the spotlight once again due to the volatility and finite nature of oil. Continuing to rely on fossil fuels means we will be more vulnerable to its market fluctuations.

Apart from the cost, high dependency on fossil fuels also has a negative impact on the world’s climate. Depleting oil reserves coupled with accelerated climate provide a great impetus for us to make the long-awaited shift to RE. Developing feasible solutions for future energy use could not only prevent Malaysia from becoming a net fuel importer in the next 30 years but also reduce our carbon emissions and improve quality of rural life.

In some parts of the world, particularly in Europe and Japan, the solar photovoltaic or PV industry has become increasingly robust. Germany’s Renewable Energy Sources Act (EEG) has demonstrated the effectiveness of joint industrial and political commitment through the Feed-in-Tariff (FiT). Since the act was implemented in April 2000, Germany has already exceeded its target to generate 12.5% electricity from RE by 2010 - hitting more than 13% by 2007. Similar success has been seen in other countries in the EU.

In the Asian region, China and India have demonstrated great enthusiasm in RE. Since the 1990s, China has increased its support for RE research and development, and introduced a regulation based on the Renewable Energy Sources. Meanwhile, India has formed a separate ministry to promote RE through various programmes, government incentives and policies including FiT.

In Malaysia, our ongoing quest to create a more sustainable energy platform rests on the four pillars of the National Green Technology Policy, namely energy, environment, economy and social. With a more sustainable energy mix, we hope to attain energy independence and promote efficient utilisation, which will in turn minimise the impact on the environment as well as enhance economic development and improve the quality of life for all Malaysians in the foreseeable future.

Ladies and gentlemen,

Malaysia is often regarded as a success story depicting rapid development while ensuring a relatively manageable ecological footprint. In fact, our environmental performance ranks third in the Asia-Pacific region and 63rd out of 180 countries according to the Yale Environmental Performance Index. Malaysia leads the way for the Asia Pacific region, which plays a pivotal role in realising the goals of the Paris Climate Change Agreement.

Over 90% of our national electricity supply is still derived from fossil fuels, with a minimal amount from RE sources like hydro, biomass from oil palm plantations and biogas from palm oil mills.

Since 2000, our national policies on RE have evolved. Renewable Energy (RE) was introduced as the 5th fuel strategy in Malaysia’s energy mix under the National Energy Policy back in 2001.

From 2006, the National Bio-fuel policy was formulated to encourage the use of bio-diesel in transportation, which encouraged policies promoting “green energy” to start taking root in Malaysia. This was followed by the National Green Technology Policy in 2009 and the enactment of the 2011 Renewable Energy Act to develop RE powered electricity generation for supply to the national electricity supply network.

As of early 2012, Malaysia mandated the adoption of a renewable energy FiT mechanism, under the country’s 2011 RE Act. The Sustainable Energy Development Authority (SEDA) and Clean Energy Regulators Initiative (CERI) are working together to enable FiT implementation and RE development, to improve FiTs for solar photovoltaic (PV), biomass, biogas and small hydro energy resources and technologies.

The FiT implementation process was designed to support rapid RE deployment while also enhancing energy security and addressing climate change challenges. This collaboration with CERI is expected to expand and catalyse clean energy development in Malaysia.

As part of the 11th Malaysia Plan (11MP) from 2016-2020, we target to achieve 53% coal, 29% gas, 15% large hydro, and 3% RE in our energy mix. By 2020, we hope to achieve RE capacity of 2,080 MW (FiT).

However, we continue to face some challenges when it comes to developing RE such as the high cost of biomass feedstock as a commodity with alternative uses, highly convoluted approval processes for small-scale hydro projects, lack of successful examples of municipal waste-to-energy-conversion projects, and remoteness from the power supply grid of projects that use biogas from Palm Oil Mill Effluent (POME).

The Public Works Department (JKR) has achieved considerable results in Energy Efficiency by improving building designs to make them more energy efficient, including retro-fitting some government buildings in Putrajaya. This has resulted in energy savings of up to 14% or RM2-2.5 million a year.

Similar efforts are being undertaken in the private sector, but because conventional energy is so heavily subsidised by the government, RE is unable to be price-competitive. Thus, companies are less keen to invest in being more energy-efficient as it does not benefit them in terms of cost. This is one of the areas that we need to actively look into – the need to incentivise more private companies to invest in EE solutions.

Moving forward, our next national agenda is to address the need to strongly decarbonize our country’s economy through the Energy Efficiency and Conservation (EE&C) initiatives. The Government recognises the need to improve on our energy efficiency to ensure sustainable energy supply in the country.

The Ministry of Energy, Green Technology and Water Malaysia (KeTTHA) is responsible for promoting energy efficiency and improving energy efficiency efforts in order to reduce energy consumption and energy-related environmental issues in the country. It is also one of the ways that will lead the country to a sustainable energy path. Energy efficiency is commonly seen as the most cost-effective and most readily-accessible energy saving options available worldwide. The Ministry has continuously undertaken and implemented various programmes and initiatives to promote energy efficiency and conservation (EE&C) in the country such as the Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP) that was implemented in 1999, SAVE Programme in 2011, Minimum Energy Performance Standards (MEPS) and energy labelling for electrical appliances, Energy Performance Contracting (EPC) etc.

Since energy consumption is identified as one of the major causes in climate change issues, the Government will give a major focus to prudent and efficient management of resources under the 11th Malaysia Plan, 2016-2020.

As a precursor, the Government has approved the National Energy Efficiency Action Plan (2016-2025). Under the National Energy Efficiency Action Plan, the government aims to tackle issues pertaining to energy supply by managing demand efficiently. The Plan presents the instruments for a successful implementation of energy efficiency strategies in the country with a well-coordinated and cost-effective implementation of energy efficiency measures in the industrial, commercial and residential sectors to be implemented over a 10-year period, which will lead to reduced energy consumption and economic savings for the consumers and the nation.

The target of the Plan is to save electricity and reduce electricity demand growth. The effective and efficient implementation of the National Energy Efficiency Action Plan supported with sufficient resources will be able to save 52,233 GWh of electricity over the plan period against a business-as-usual (BAU) scenario. The corresponding electricity demand growth reduction at the end of the plan is 8.0%. The total reduction of greenhouse gas emission over the plan is projected to be 38 million tonnes CO2 equivalent.

During the 11th Malaysia Plan, measures will be taken to identify potential improvements and appropriate approaches to ensure efficient use of energy in buildings, industries and households. These measures include increasing competencies of energy service providers, especially Registered Electrical Energy Managers, and promoting the implementation of Energy Performance Contracting for Government buildings.

User awareness will be enhanced on energy labelling and the availability of standards such as ISO 50001 for buildings and Minimum Energy Performance Standards (MEPS) for appliances will be promoted. Other specific measures will include introduction of Enhanced Time of Use (EToU) tariff scheme and gradual abolishment of the Special Industrial Tariff for energy intensive industries.

Ladies and gentlemen,

Last August, it was announced that Sabah is home to the country’s first geothermal power plant in Tawau. The 30MW geothermal power plant is scheduled to be operable by June 2018, and will place Malaysia 16th in the world in geothermal energy generation. We have also undertaken a comprehensive study of geothermal energy in Ulu Slim, Perak.

These projects have been undertaken after extensive research and analysis by independent foreign institutions on the existence of an active geothermal system centred around these regions.

As part of our efforts to provide capacity building for the budding geothermal industry in Malaysia, Tawau Green Energy (TGE) – the developer of the plant in Tawau – have been tasked to establish a Geothermal Resource Centre that brings together stakeholders and specialists. The GRC will also provide specific training and short courses in relevant areas, while creating a platform for local universities to collaborate with foreign institutions in the field of geothermal energy.

Meanwhile, we are also undertaking stronger advocacy and strategic communications with regards to future charges on electricity tariffs under the Renewable Energy Fund. We are also carrying out efforts to enhance RE competency and capacity building, including on and off-grid training in specialised areas such as solar PV for installers, charge men and wiremen. At the same time, we are expanding the Malaysian Grid Connected PV Design Course to international participants and providing continuous training on biomass/biogas and small hydro.

In 2017, two flagship RE programs which are Net Energy Metering (NEM) and Large Scale Solar (LSS) continue to stimulate the RE growth via solar PV. The NEM which was launched in November last year is a scheme that enables electricity consumers to install solar PV for self-consumption. The NEM initiative can not only reduce the electricity bill, it contributes to the reduction of CO2 emission as well.

The much-awaited program from companies, Large Scale Solar program, is a competitive bidding program for the solar farm with the size 1 to 30 megawatt. The program has attracted hundreds of companies to bid at their best offer. The LSS program estimates to contribute a total of 1000MW by the year 2020.

During the budget speech in 2017, the Prime Minister announced that there will be a new program to assist the people in group B40, called MySuria Program. MySuria Program will be launched this year and aims to install 3 kW solar system for 1,620 houses nationwide. The B40 people are estimated to receive RM250 monthly for the period of 10 years.

Hopefully, with these measures in place, Malaysia will continue to lead the way as a major player in the RE and green technology industry, not just within the region but also globally.

Ladies and gentlemen,

EPRE 2017 is a timely platform as it brings together leading authorities and industry captains from the global electric, power and renewable energy industries under one roof to discuss, deliberate and share knowledge with the ultimate aim of advancing the development of RE.

The main challenge for Malaysia at the moment is to ensure the long-term economic sustainability of RE. Thus, we need to implement the appropriate framework that allows the sector to become self-sustaining, while ensuring it doesn’t burden the taxpayer.

KeTTHA is certainly proud and pleased to support yet another installation of this event, which has been earmarked as a premier platform for the RE and power industry in this region. The event certainly places Malaysia at the forefront of RE, in line with the government’s aspirations to emerge as a significant global energy player in the near future.

I would like to take this opportunity to congratulate the organisers and support, particularly TNB and Malaysia Exhibition Services (MES) Sdn Bhd. for pulling off another successful installation of EPRE. Judging from its track record, I am sure that EPRE 2017 will once again surpass expectations and put forth new solutions for the industry to further our respective ‘green’ objectives.

I look forward to the many thought-provoking seminars, panel discussions and meetings that will be presented throughout the event. I hope that all stakeholders, industry leaders, government officials and delegates present will take advantage of this platform reimagine the future of RE and ensure the development of sustainable energy, within your respective sectors, countries and for the region as a whole.

On that note, I wish you all an electrifying EPRE 2017 and a bright RE future!

Thank you.

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