FINAL Draft: 19 Sep 2012 INTERNAL USE & FOR CONSULTATION ONLY
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MALAYSIA
Rapid Assessment and Gap Analysis
For Sustainable Energy for All (SE4ALL) Initiative
A Report by the UN Country Team Malaysia
Prepared and Edited by:
Azman Zainal Abidin (Technical Advisor), Prof Dr. Ir. KS Kannan (UNIDO) and Asfaazam Kasbani (UNDP)
Under the guidance of:
Economic Planning Unit (EPU) and Ministry of Energy, Green Technology and Water (MEGTW), Malaysia
September 2012
Disclaimer: The findings, interpretation, and conclusions expressed in this report are entirely those of the authors and should not be attributed in any manner to
the United Nations Malaysia Country Team, UNDP, UNIDO and to its affiliated organizations or to the countries they represent including its agencies. The authors
use information publicly sourced as advised and without prejudice.
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Sustainable Energy for All (SE4ALL) Brief
UN Secretary-General Ban Ki-moon is leading a global initiative on Sustainable Energy for All to mobilize action
from all sectors of society: business, governments, investors, community groups and academia. The United
Nations is the ideal institution to convene this broad swath of actors and forge common cause in support of
three interlinked objectives:
1. Ensure Universal Assess to modern energy services
2. Double the global rate of improvement in energy efficiency (EE)
3. Double the share of renewable energy (RE) in the global energy mix
These objectives are complementary. Progress in achieving one can help with progress toward the others. All
are to be achieved by 2030, and all are necessary to achieve sustainable energy for all. The Secretary-General’s
initiative contributes to the International Year of Sustainable Energy for All in 2012, as declared by the UN
General Assembly, by providing a focus for action by all stakeholders.
OBJECTIVE
The purpose of this Rapid Assessment and Gap Analysis is to provide:
• A quick brief look of the energy situation in the country (Section 1) within the context of its economic
and social development and poverty eradication
• A good review of where the country is in terms of the three SE4ALL goals (Section 2), and
• A good estimate of the main challenges and opportunities vis-à-vis the three goals of SE4ALL where
the major investments, policies and enabling environments will be required (Section 3)
• A sound basis and background for an Action Plan that may follow as part of the SE4ALL activities in the
country
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Abbreviations
AAIBE Akaun Amanah Industri Bekalan Elektrik (AAIBE)
CEB Central Electricity Board
DDC District Development and Review Committee
DID Department of Irrigation and Drainage
EC Energy Commission (English for ST)
EE Energy Efficiency
EIB Energy Information Bureau
EPP Entry Point Projects
EPU Economic Planning Unit
FiT Feed-in-Tariff
GDP Gross Domestic Product
GTP Government Transformation Programme
ICU Implementation Coordination Unit
IPP Independent Power Producer
ktoe Kilo tones of oil equivalent
MDG Millennium Development Goals
MDTCA Ministry of Domestic Trade and Consumer Affairs
MEGTW Ministry of Energy, Green Technology and Water
MESITA Malaysian Electricity Supply Industries Trust
Account (English for AAIBE)
MGTC Malaysia Green Technology Corporation
MHLG Ministry of Housing and Local Government
MITI Ministry of International Trade and Industry
MOA Ministry of Agriculture
MOE Ministry of Education
MOH Ministry of Health
MOSTI Ministry of Science, Technology and Innovation
MP Malaysia Plan
MRRD Ministry of Rural and Regional Development
NDC National Development Council
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NDPC National Development Planning Council
NEB National Energy Balance
PEMANDU Performance Management and Delivery Unit
PLI Poverty Line Income
PTM Pusat Tenaga Malaysia (Malaysia Energy Center)
RBI Rural Basic Infrastructure
RE Renewable Energy
REPPA Renewable Energy Power Purchase Agreement
REP-PoR Regional Energy Programme for Poverty Reduction
SDC State Development Committee
SEDA Sustainable Energy Development Authority
SEPU State Economic Planning Unit
SESB Sabah Electricity Sdn. Bhd.
SESCO Sarawak Electricity Company
SHS Solar Home System
SME Small and Medium Industries
SREP Small Renewable Energy Projects
ST Suruhanjaya Tenaga (Energy Commission)
TNB Tenaga Nasional Berhad
UNCT United Nations Country Team Malaysia
UNDP United Nations Development Programme
UNIDO United Nations Industrial Development
Organization
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Table of Contents
ABBREVIATIONS .......................................................................................................................................... 3
EXECUTIVE SUMMARY................................................................................................................................. 6
SECTION I: INTRODUCTION .......................................................................................................................... 8
1.1 COUNTRY OVERVIEW ................................................................................................................................... 8
Basic socio-economic data for Malaysia ........................................................................................................ 8
1.2 ENERGY SITUATION ...................................................................................................................................... 9
1.2.1 Energy Supply (energy mix, export/import, electricity sector) ............................................................ 9
1.2.2 Net Imports and Exports by Fuels Type ............................................................................................. 11
1.2.3 Energy demand .................................................................................................................................. 12
1.2.4 Energy and Economic Development .................................................................................................. 13
1.2.5 Energy Strategy and Relevant Targets ............................................................................................... 14
SECTION 2: CURRENT SITUATION WITH REGARDS TO SE4ALL GOALS ........................................................ 15
2.1 ENERGY ACCESS vis-à-vis GOAL OF SE4ALL ................................................................................................ 15
2.1.1 Overview and assessment .................................................................................................................. 15
2.1.2 Modern energy for thermal applications (cooking, heating) ............................................................. 15
2.1.3 Access to electricity: ........................................................................................................................... 17
2.2 ENERGY EFFICIENCY vis-à-vis GOAL OF SE4ALL .......................................................................................... 21
2.2.1 Overview and Assessment ................................................................................................................. 21
2.2.2 Energy intensity of national economy: .............................................................................................. 22
2.3 RENEWABLE ENERGY vis-à-vis GOAL OF SE4ALL ........................................................................................ 24
2.3.1 Overview and Assessment ................................................................................................................. 24
2.3.2 On-grid and off-grid renewable energy ............................................................................................. 25
2.4 SE4All GOALS .............................................................................................................................................. 26
2.4.1 Energy Access ..................................................................................................................................... 26
2.4.2 Energy Efficiency ................................................................................................................................ 26
2.4.3 Renewable Energy .............................................................................................................................. 26
SECTION 3: CHALLENGES AND OPPORTUNITIES FOR ACHIEVING SE4ALL GOALS ....................................... 27
3.1 INSTITUTIONAL AND POLICY FRAMEWORK ............................................................................................... 27
3.1.1 Energy and development ................................................................................................................... 27
3.1.2 Thermal energy for households ......................................................................................................... 28
3.1.3 Power sector ...................................................................................................................................... 29
3.1.4 Modern energy for productive sectors .............................................................................................. 29
3.1.5 National monitoring framework for SE4ALL ...................................................................................... 29
3.2 PROGRAMS ................................................................................................................................................. 30
3.2.1 Thermal energy .................................................................................................................................. 30
3.2.2 Power sector ...................................................................................................................................... 30
3.2.3 Energy efficiency programs ................................................................................................................ 30
3.2.4 Modern energy for productive use .................................................................................................... 31
3.3 FINANCING.................................................................................................................................................. 31
3.4 PRIVATE INVESTMENT AND ENABLING BUSINESS ENVIRONMENT .......................................................... 33
3.4.1 Thermal energy for households ......................................................................................................... 33
3.4.2 Power sector ...................................................................................................................................... 33
3.4.3 Modern energy for productive sectors ............................................................................................... 34
3.5 GAPS AND BARRIERS.................................................................................................................................. 35
REFERENCES .............................................................................................................................................. 37
ANNEX 1: OTHER INITIATIVES RELATED TO SE4ALL ................................................................................... 38
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EXECUTIVE SUMMARY
This report is prepared as part of the United Nations Country Team’s effort to support Malaysia in embarking
into SE4ALL initiatives. The Rapid Assessment and Gap Analysis report will map out current status of SE4LL
which will include sections on Current Situation and Challenges.
Malaysia has been successful in achieving the overall progress of the SE4ALL objectives. Strong and sustained
economic growth has contributed to success in meeting basic energy needs, including rural electrification and
domestic energy for cooking. While there are other factors that contributed to the national poverty
alleviation, rural electrification programme comes closest in linking the energy-poverty nexus. A study
concluded that in general, as electrification progresses, poverty tends to decrease. Starting as a security
programme for lighting villages during the emergency (prior to independence 1957), rural electrification has
graduated into an important component of rural development for uplifting the welfare of the rural population.
The programme has the potential to bring about economic empowerment of the poor via employment and
involvement in agriculture, rural industries, SMEs and energy-based entrepreneurships and also improving
education and health. However, there still remaining pocket of electrified households which will be connected
by end of 2015. At date, rural electrification has successfully penetrated 99% of the country, 100% in
Peninsular, 85% in Sabah and 90% in Sarawak. Further expansion of the rural electrification will have to focus
in Sabah and Sarawak. The lesser penetration rates in Sabah and Sarawak are mainly due to physical and
geographical constraints which entail heavy investments and also the relatively small electricity market due to
the sparsely populated rural areas. The establishment of MESITA in 1997 has successfully catalyzed the rural
electrification. Managed by MEGTW, it is an innovative trust fund where all the major IPPs in the Peninsular
Malaysia and Sabah contribute about 1% of their annual pre-tax profit for rural electrification (including
promotional activities), RE/EE projects and training. It is noted that by the year 2002, a total of USD 100
million has been disbursed and has successfully benefited more than 250,000 households. Starting in 2010,
PEMANDU with MRRD, has started the Government Transformation Programme Rural Basic Infrastructure
initiative (RBI) which as date, has benefitted more than 50,000 households under the rural electrification
programme. On domestic energy, use of clean energy such as LPG, kerosene (for cooking and heating) is
widely available and sold in the groceries and fuel stations.
Energy efficiency has been in national policy, albeit broadly, since the 7th
Malaysia Plan. The energy objective
of providing efficient utilization of energy serves as the guiding principle of energy efficiency programme in
building, industrial and commercial sectors. The Efficient Management Of Electrical Energy Regulations 2008,
under “Electricity Supply Act 1990” require premises which consume more than 3,000,000kWh over a period
of 6 months, to submit status reports to the Energy Commission, Malaysia including the establishment of an
energy management system. The government is currently exploring the possibility of establishing a revised
National EE Master Plan including an Act to spearhead EE further. Under the Economic Transformation
Programme, PEMANDU together with MEGTW, has launched the SAVE programme as part of a nation-wide
market transformation exercise towards the use of energy efficient appliance. The government has started its
long journey on the subsidy rationalization programme which eventually will lead to market-based energy
pricing in Malaysia.
The passing of the RE Act and the establishment of Sustainable Energy Development Authority (SEDA) has
strongly supported Government’s RE agenda. Feed-in-Tariff is currently seen as the most feasible way to
promote the use of RE sources in the national generation mix. SEDA’s role is to administer and manage the
implementation of the feed-in tariff (FiT) mechanism where the resources focused as now are biomass,
biogas, mini-hydropower and solar energy. The response has been encouraging where almost all quotas for
solar until 2014 has fully taken up. According to the planned, Malaysia expects to connect 985MW (5.5%) of
RE generation capacity by 2015.
Institutional set-up for SE4ALL has been matured and it would be natural for central agency like EPU to
continue providing direction support on the progress of the targets. MRRD shall be the lead agency for the
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Universal Access while MEGTW shall be the focal point for EE and RE initiatives. MGTW, the ministry
responsible in the development of energy planning and implementation, acts as the guardian for MESITA
funds where it works hand-in-hand with MRRD and TNB to continue rural electrification programme by
various means. MRRD is responsible for planning and implementation of rural infrastructures development
policies, including rural electrification. TNB, as the main utility company is responsible for generation,
transmission and distribution of electricity in Peninsular Malaysia. SESCO and SESB are responsible for the
same in Sarawak and Sabah respectively.
In conclusion, Malaysia will face no major challenges implementing the three SE4ALL goals if it continues on its
chosen path. In terms of energy access, 99.4% of the country is already electrified and the remote areas shall
soon be connected with the implementation of programs that achieved 310% more electricity connections in
2010-2012 than during the previous period. Regarding EE, the government has launched many projects that
will allow Malaysia to achieve the SE4ALL goal by 2015. Lastly, the 10th Malaysian Plan aims to increase fivefold
the share of renewable energy sources in the energy mix (to 5.5%) by 2015. Through these efforts to promote
a greener, more efficient and more connected country, Malaysia is to achieve high-income status by 2020.
Malaysia has achieved or is on track to attaining the Millennium development goals (MDGs) at aggregate level
by 2015. The primary energy source for Malaysia comes from natural gas at 43.3% followed by crude oil at
35.5%. Malaysia is a significant net exporter of natural gas, primarily in the form of liquefied natural gas (LNG).
The National Energy policy of 1979 focuses on three different objectives to deal with the energy situation in
Malaysia and it encompasses the supply, utilization and environmental issues surrounding energy.
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SECTION I: INTRODUCTION
1.1 COUNTRY OVERVIEW
Basic socio-economic data for Malaysia
Population: 28.6 million a
GDP/capita: USD 6,637 a (USD 15,588.66 PPP )
b
Key economic sectors: Industry, Transport, Oil and Gas, Agriculture,
Banking and finance.
Poverty rate (current and
trend):
from 3.8% (2009) to 2.0% c
Main sources of income: Exports of oil and gas, manufacturing (electrical and
electronics), palm oil and rubber
FDI: US$ 7 billion d
Demographic situation: 72.2% urban/27.8% rural, urbanization ranging
from 35% to 90% (WB, 2010) Sources: a: EPU MIEF2011, b: World Bank, c: EPU 10MP, d: UNCTAD Report2011
Malaysia is on track to achieving a developed country status by 2020. Malaysia is projected to be able to
attain the Millennium development goals (MDGs) at aggregate level by 2015. The MDGs consist of 8 different
goals and they are to: eradicate extreme poverty and hunger; achieve universal primary education; promote
gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS,
malaria and other diseases; Ensure environmental sustainability; and develop a global partnership for
development. Furthermore efforts have been carried out to raise the living standards of low-income
households through greater interagency coordination and improvements in application processes.
Malaysia has experienced three decades of impressive economic and social progress, enabling it to provide for
the health and education of its people, to eradicate poverty in large measure, to build excellent infrastructure
and to become a major global exporter. The changing global landscape, financial and economic pressures, free
movements of human capital, environmental issues and profits affecting Malaysia’s progress towards Vision
2020. Towards this end, both the New Economic Model and the Tenth Malaysia Plan, which emphasize
inclusive growth, aspire to provide equal opportunities to all Malaysians. Apart from eradicating poverty,
priority will be on increasing the coverage of basic infrastructure such as roads, electricity (universal assess)
and water supplies, and communication networks. Health-care access, coverage and quality will continue to
be improved. In meeting its voluntary commitment of reducing greenhouse gases and to ensure the
sustainability of the environment (including conservation and sustainable use of natural resources), emphasis
will be placed on using renewable energy and on increasing energy efficiency through new guidelines,
standards, laws and incentives, which in directly support the SE4ALL objectives.
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1.2 ENERGY SITUATION
1.2.1 Energy Supply (energy mix, export/import, electricity sector)
Primary Energy Sources
Hydropower
Coal and
Coke
Natural Gas*
Petroleum
Products &
Others
Crude Oil
ktoe
Source: NEB 2009
The primary energy source for Malaysia comes from natural gas at 41% followed by crude oil at 40.1% (2009).
Its total primary energy supply registered at 74,582 ktoe, a decline of 1.2 percent compared to 72,384 ktoe
during the previous year. The decrease was led by lower primary production of natural gas and crude oil in
2009. This was anticipated also by decreasing imports of total energy due to unattractive energy demand
during the period. Malaysia has one of the most extensive natural gas pipeline networks in Asia, owing to the
multi-phased peninsular Gas Utilization (PGU) project that was completed in 1998. Natural gas in Malaysia is
mainly utilized for electricity generation through natural gas fired power plants, petrochemical and large
industrial uses, and motor vehicles.
Upstream industries
The country’s crude oil and condensate reserves amounted to 5.517 billion barrels in 2009. The average
production of domestic crude oil and condensate increased from 681,000 barrels per day (bpd) in 2000 to
658,800 bpd in 2009. Based on this production level, which is in line with the National Depletion Policy, the
reserves are projected to last for 15 years (ADB). Nearly all of Malaysia's oil comes from offshore fields. The
continental shelf is divided into 3 producing basins: the Malay basin offshore peninsular Malaysia in the west
and the Sarawak and Sabah basins in the east. Most of the country’s oil reserves are located in the Malay
basin and tend to be of high quality. Malaysia’s benchmark crude oil, Tapis Blend, is of the light and sweet
variety with an API gravity of 44° and sulfur content of 0.08 percent by weight. More than half of total
Malaysian oil production currently comes from the Tapis field in the offshore Malay basin. Malaysian oil
production has been gradually decreasing since reaching a peak of 862,000 bbl/d in 2004 due to its maturing
reservoirs. Malaysia consumes the majority of its oil production and domestic consumption has been rising as
production has been falling. The government is focused on opening up new investment opportunities by
enhancing output from existing fields and developing new fields in deep water areas offshore Sarawak and
Sabah.
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Gross natural gas production however has been rising steadily, reaching 2.7 Tcf in 2010, while domestic
natural gas consumption has also increased steadily, reaching 1.1 Tcf in 2010, 42 percent of production.
Downstream Industries
Malaysia had about 538,580 barrels per calendar day (b/cd) of refining capacity at seven facilities as of January
2011. PETRONAS went into refining and distribution in 1983 where it initiated the construction of refineries at
Malacca and at Kerteh in order to reduce its dependence on Royal Dutch/Shell's two refineries at Port Dickson
and Esso's refinery in Sarawak. Malaysia invested heavily in refining activities during the last two decades and
is now able to meet most of its demand for petroleum products domestically, after relying on the refining
industry in Singapore for many years. Petronas operates three refineries (259,000 b/cd total capacity), while
Shell operates two (170,000 b/cd total capacity), ExxonMobil operates one (86,000 b/cd), and Kemanan
Bitumen Co. operates another (23,750 b/cd). Kemanan Bitumen refinery largely produces bitumen from heavy
crudes. The Sabah Oil and Gas Terminal, under construction in Kimanis, Sabah, is expected to be completed
by the end of 2013. It will receive crude from offshore fields, process and distribute the products via a planned
310-mile pipeline linking Sabah with Bintulu, Sarawak. The terminal will have a processing capacity of 300,000
bbl/d of crude and condensate. By 1990, 252 service stations carried the PETRONAS brand, all but twenty (20)
on a franchise basis, and another fifty (50) were planned. Some were set up on grounds of social benefit rather
than of strict commercial calculation.
Electricity sector
Gas
56%
Coal
28%
Oil
1%
Diesel
5%
Biomass
2%
Others
0%
Hydro
8%
Gas
52%
Hydro
5%
Oil
1%
Coal
40% Diesel
1%
Biomass
1%Others
0%
Other
2%
Installed Capacity (2010) Generation Mix (2010)
Source: NEB 2009
As of 2010, installed capacity amounted to 27,179 MW while the generation mix stands at 125,045 GWj
where maximum demand was at 15,072 MW.
The Malaysian electricity sector has evolved tremendously for the past 60 years. The national utility (Tenaga
National Berhad) is currently involved in the generation, transmission and distribution of electricity business.
In Peninsular Malaysia, the Company is a major contributor to the total industry capacity through six thermal
stations and three major hydroelectric schemes. It also manages and operates the National Grid which links
TNB power stations and IPPs to the distribution network in the peninsula. The grid is connected to Thailand’s
transmission system in the north and Singapore’s transmission system in the south. In East Malaysia, TNB,
through 80%-owned subsidiary Sabah Electricity Sdn. Bhd. (SESB), manages the Sabah Grid and aims to
provide electricity to 95% of the state’s population by year 2013. TNB’s distribution network is managed
through a comprehensive distribution system, customer service centres and call management centres. Over
the years, TNB has diversified from its core business into the manufacture of transformers, high voltage
switchgears and cables; the provision of professional consultancy services; and architectural, civil, electrical
engineering works and services, repair and maintenance. In 2005, TNB embarked on a 20-Year Strategic Plan
which entails greater focus on green initiatives such as the development of renewable sources of fuel, and
more effective demand side management via energy efficiency. These efforts complement the Government’s
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carbon reduction agenda while also creating a foundation for sustainable energy for the future. Set up as the
Central Electricity Board of the Federation of Malaya in 1949, TNB has powered national development
efforts for more than 60 years by providing reliable and efficient electricity services.
1.2.2 Net Imports and Exports by Fuels Type
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Coal &
Coke
Crude Oil Petroleum
Products
Natural
Gas
0
5,000
10,000
15,000
20,000
25,000
LNG Pet. Products Coal & Coke
Energy Imports in ktoe (2009) Energy Exports in ktoe (2009)
Source: NEB 2009
Coal remains the highest imported fuel mainly for coal-fired power plants. The Liquefied Natural Gas (LNG)
and the crude oil are the largest exported. The majority of Malaysia’s oil exports go to markets in Japan,
Thailand, South Korea and Singapore. The LNG and natural gas products are mostly exported to Japan, South
Korea, and Taiwan. Malaysia is a significant net exporter of natural gas, primarily in the form of liquefied
natural gas (LNG). It was recorded in 2005 that Malaysia exported just over 1 Tcf (trillion cubic feet) of LNG,
mostly to Japan, South Korea, and Taiwan. In 2010, Malaysia exported 234,000 bbl/d of crude oil, down
slightly from the 236,000 bbl/d exported in 2009. This was about 35 percent of Malaysia’s crude oil
production. The Tapis blend is Malaysia’s major exported crude oil because its high quality and low sulfur
content commands premium prices. In 2010, Malaysia imported 205,000 bbl/d of lower-cost crude oil for
processing at its oil refineries.
The production and export of Liquefied Natural Gas (LNG), however, has increased from 23,606 ktoe in 2009
from 22,277 ktoe in 2008 level. Malaysia was the third largest exporter of LNG in the world after Qatar and
Indonesia in 2010, exporting over 1 Tcf of LNG, which accounted for 10 percent of total world LNG exports.
Japan, South Korea, Taiwan, and China have supply contracts with Malaysia, and are the largest purchasers.
LNG is primarily transported by Malaysia International Shipping Corporation (MISC), which owns and operates
27 LNG tankers, the single largest LNG tanker fleet in the world by volume of LNG carried. MISC is 62-percent
owned by Petronas. The Bintulu LNG complex on Sarawak is the main hub for Malaysia's natural gas industry.
Petronas owns majority interests in Bintulu's three LNG processing plants, which are supplied by offshore
natural gas fields. The Bintulu facility is the largest LNG complex in the world, with 8 production trains and a
total liquefaction capacity of 1.7 Tcf per year following the debottlenecking completed at end-2010, which
raised overall capacity by 0.6 Tcf per year. Japanese financing has been critical to the development of
Malaysia's LNG facilities. Also in Bintulu is Shell’s gas to liquids (GTL) project which has a production capacity
of 14,700 bbl/d. Construction began on Petronas’ Sabah Oil and Gas Terminal (SOGT) in Kimanis, Sabah in
2011 and is expected to be completed by the end of 2013. It will have a handling capacity of 1.3 Bcf/d of
natural gas per day from the Gumusat-Kakap, Malikai, and Knabalu offshore fields. It will upply gas for
domestic use in Sabah, largely for a new electric power plant slated for completion in 2014. A reported
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500,000 cubic feet per day will be piped to the Bintulu complex to be exported as LNG. The Sabah-Sarawak
Gas Pipeline project is part of this development.
1.2.3 Energy demand
Final Energy Demand in ktoe (1999 vs 2009)
Source: NEB 2009
Energy demands in the transport sector have been increasing swiftly in Malaysia due to improvements in
transportation. The rapid industrialization of the country in recent years has led to high economic growth,
which in turn has led to population growth and an accelerated ownership of motorized vehicles. The total
number of vehicles in the country have increased from about 5 million in 1991 to 19 million in 2009, thereby
registering an average annual growth rate of about 8% during this period. The growth in the number of
vehicles in the country has been faster than the growth in population.
Based on the National Energy Balance, Industrial sector is the main user of electricity in Malaysia with its share
of 44.9 percent from total consumption in 2009. The electricity consumption from the industrial sector
increased by 0.9 percent to register at 3,719 ktoe (43,220 GWh) compared to the previous year. The
consumption of electricity in the commercial sector also increased to reach 2,743 ktoe (31,857 GWh), boosted
by tourism activities following the expansion of new routes by airlines and various tourism promotional
activities organised during the year. The electricity consumption in the residential sector recorded an increase
of 7.4 percent to register at 1,792 ktoe (20,822 GWh). The electricity consumption from the rail transport
sector, however, decreased from 15 ktoe (173 GWh) in 2008 to 12 ktoe (163 GWh) in 2009.
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1.2.4 Energy and Economic Development
Share of energy sector in GDP
Source: ETP 2011
In 2009, the combined oil, gas and energy sectors represented 19 % of GDP equivalent to RM127 billion (USD
41 billion) while in 2015, it is expected that 11.1% of GDP equivalent to RM81.9 billion (USD 26.42 billion). In
total, the national oil company, Petronas, provides about 40% of the revenue for federal budget in taxes,
dividends and royalties.
Electricity and Economic Growth
0
100,000
200,000
300,000
400,000
500,000
600,000
0
20,000
40,000
60,000
80,000
100,000
120,000
Electricity
Consumption
(GWh)
GDP (RM mil)
Source: NEB 2009
The last 20 years have seen the growth of electricity in tandem with the growth of country’s GDP. Industrial,
commercial and residential sectors are the main users of electricity use and will continue to be the critical
sectors based on the current trend of increasing middle-income families as well the opening up of new
townships and construction of new commercial and residential buildings. The total electricity consumption
recorded a growth of 3.8% compared to the previous year to register at 8,286 ktoe (96,307 GWh). It is clear
that the demand for electricity has seen a large increase the past 20 years or so. With Malaysia’s urban
population to reach 78% in 2030 from 63 % 2002, combined with high per capita GDP growth of 3.4% per
annum over the outlook period, it will lead to a change in lifestyle, where energy consumption will be based
mostly on commercial energy sources in the form of electricity (EPU 10MP).
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1.2.5 Energy Strategy and Relevant Targets
Since independence in 1957, Malaysia has always strive in ensuring universal access to basic infrastructure
(roads, electricity, treated water and basic sanitation). During the 10 Malaysia plan period, electricity supply
coverage will be expanded through the grid extension and alternative systems such as mini hydro and solar
hybrid. Coverage of electricity supply is expected to reach almost 100% in Peninsular Malaysia and 99% in
Sabah and Sarawak by 2015.
Malaysia’s concerns on energy security for economic development started during the 1970s oil crisis. The
National Energy policy of 1979 was prepared and focuses on three different objectives: the supply, utilization
and environmental issues surrounding energy. The supply objective aims to ensure adequate, secure and cost-
effective supply of energy; the utilization objective aims to promote efficient utilisation of this energy and
discourage wasteful and non-productive patterns of energy consumption; and finally the environmental
objective aims to ensure factors pertaining to environmental protection are not neglected in production and
utilization of energy. In 1981, the Four-Fuel diversification policy was introduced, which strives to reduce the
over-dependence on a single fuel source; and to focus on four main sources of fuel, i.e. oil, hydropower,
natural gas and coal. To strengthen further, the Fifth-fuel policy was introduced in 2000 which focuses on
incorporating renewable energy as next available fuel for power generation; and expanding fuel sources to
comprise, hydropower, natural gas, coal and renewable energy. Other related policies includes 1974
Petroleum Development Act (establishment of Petronas), 1975 National Petroleum Policy, 1980 National
Depletion Policy, 1990 Electricity Supply Act, 1993 Gas Supply Acts, 1994 Electricity Regulations, 1997 Gas
Supply Regulation and the 2001 Energy Commission Act.
In 2010, the Renewable Energy Action plan was formulated to intensify the development of grid-connected
renewable energy, particularly biomass, as the 'fifth fuel' resource under the country’s Fuel Diversification and
Fifth-fuel Policies. REAP provides potential targets for RE in Malaysia where more than 6,500 MW can
potentially be generated from solar PV: 1,340 MW by 2030 from biomass; 410 MW by 2028 from biogas; 490
MW from mini-hydro by 2020 and about 360 MW by 2022 from Solid waste. Arising from the needs of a
dedicated regulation on RE, the RE Act and the Sustainable Energy Development Authority (SEDA) Act were
successfully gazetted in 2010 which leads to the official starting of the Feed-in-Tariff mechanism for RE
projects in December 2011. It is expected that that renewable energy to reach 985 MW (5.5%) by 2015 and
2,080 MW by 2020.
The New Energy Policy (2011-2015) emphasizes energy security and economic efficiency as well as
environmental and social considerations. The Policy will focus on five strategic pillars: initiatives to secure and
manage reliable energy supply; measures to encourage energy efficiency (EE); adoption of market-based
energy pricing; stronger governance and managing change.
EE initiatives will gain momentum with the finalization of the National Energy Efficiency Master Plan expected
to be in 2012, setting of minimum energy performance standards for appliances and development of green
technologies. These measures will encourage industries and consumers to use energy productively and
minimize waste to be more competitive in the global market.
15
SECTION 2: CURRENT SITUATION WITH REGARDS TO SE4ALL GOALS
2.1 ENERGY ACCESS vis-à-vis GOAL OF SE4ALL
2.1.1 Overview and assessment
Rural electrification rate and availability of clean domestic energy (for cooking mainly) will be used in the
context of preparing this Rapid report. As at date, rural electrification has successfully penetrated 99% of the
country, 99.5% in Peninsular Malaysia, 77% in Sabah and 76% in Sarawak. Fossil fuel such as LPG and kerosene
for cooking is available in the market and widely sold in the groceries, supermarkets and selected gasoline
stations. Nevertheless, fuel wood is still being used in some area especially in remote Peninsular and in
highlands of Sabah and Sarawak, where it can be found easily and without cost.
Malaysia has still a large number of small villages and islands, mainly in Sabah and Sarawak that lack 24-hour
electricity, and the probability of connecting them to high voltage gridlines in the near future is poor due to
geographical issues and many other logistical constraints. No exact record on the remaining gaps to cover but
it is estimated nearly 300,000 households are still without 24-hour electricity as per DOS statistic in 2005,
mainly in Sabah and Sarawak. Nevertheless, the government has embarked on several initiatives to find
sustainable ways to cater for the electricity demands of these poor rural villages. Solar home system (SHS) (of
150W less) has been installed in various remote locations since 1990 where a total installed capacity as date is
nearly 2MW in capacity. Solar diesel PV hybrids have been initiated by TNB-Energy Services since the year
2001 in Pekan, Pahang including several islands in Peninsular Malaysia.
Approach to providing 24-hour electricity supply is similar to providing clean and treated water, the process of
adding new power connections across Malaysia involves connecting to grid-based electricity or implementing
solar hybrid systems. The type of new connection hinges upon population density and the remoteness of a
location. The preferred mode of supplying electricity would be to connect to the electricity grid. However, in
rural areas which are very far from any transmission infrastructure, or in instances where connections to the
main grid are very expensive, technologies such as solar hybrid power generation or micro hydro-electricity
are introduced. In the year under review, these alternative approaches helped ensure the provision of
electricity to more villages in rural areas.
Malaysia has matured institutional set-up in the energy industries, covering the oil and gas sector to the
electricity segment. The Economic Planning Unit (EPU) has the overarching responsibility towards energy
policy and planning, both for conventional and non-conventional sources of energy, and poverty reduction in
Malaysia. The Ministry of Rural and Regional Development (MRRD) and the Ministry of Energy, Green
Technology and Water (MEGTW), work in close coordination for the rural electrification programme. In
addition the MEGTW works in tandem with the Energy Commission (EC) and the Sustainable Energy
Development Authority (SEDA) to coordinate national programmes in energy efficiency and renewable energy.
2.1.2 Modern energy for thermal applications (cooking, heating)
Availability/quality of supply including status of domestic supply chain:
Domestic energy for cooking comes in the form of Liquefied Petroleum Gas (LPG) is sold openly and is
available in many shops in the rural area. Fossil fuel such as gasoline (for transportation) and kerosene (use
for cooking and lighting) is widely sold and can be bought easily even in the un/semi-electrified places (such as
in deep rural in the state of Sabah and Sarawak). On the other hand, traditional fuels (especially wood) are
also popular and still being used considering its abundance in the area.
16
LPG in Malaysia is widely used in households for heating appliances such as ovens and stoves It is also used in
industries such as iron and steel industry, aerosol propellant industry, glass and ceramic manufacture, copper
tubing and cable manufacture. For cooking, it comes in three cylinder sizes which are the 12, 14 and 50 kg
cylinders. The 12, 14 and 50 kg cylinders are painted according to the manufacturers’ specification (yellow for
Shell, Green for Petronas and Blue for Esso). In 2009, LPG accounted for 2.9% of the total production of oil
refinery, 10.4% of the total demand and 6% of the final consumption for petroleum products.
Affordability
Gasoline and LPG are under government’s controlled items and sold with subsidized price. In 2012, the price
is as below
RM 1.90 (USD 0.61)/L for RON 95;
RM 2.10 (USD 0.677/L for RON 97;
RM 1.80 (USD 0.58) /L for Diesel;
RM 1.90 (USD 0.61) /kg for LPG
Use of subsidy allows energy prices to be managed within the affordability level of the majority Malaysians.
Average monthly household expenditure of, as below, shows that the cost of total energy is below 5% of the
average monthly income.
Average Monthly and Share of Household Expenditure for Urban and Rural, 2004/05
Expenditure group Total (RM)
Urban
(RM) Rural (RM)
Urban share of
expenditure (%)
Rural share of
expenditure (%)
Housing, Water,
Electricity
429.57 522.3 247.4 22.86 19.01
Electricity 59.33 71.38 35.62 3.12 2.74
Gas 9.27 8.84 10.13 0.39 0.78
Liquid Fuels 0.19 0.08 0.4 0.004 0.03
Other Fuels 0.44 0.15 1.01 0.01 0.08
(Source: DOS)
Pattern of Household Expenditure on Fuels in 2005
Share of households without access to modern cooking/heating is estimated to be 0.5% mainly using forest
products. Population without electricity is estimated to be 200,000 as of 2011.
17
Subsidies:
Continuing from the above Affordability section, below is the detail subsidy structure:
Fuel type Consumer price/L
(RM)
Price without subsidy/L
(RM)
Share of subsidy in
retail price
RON95 1.90 2.93 35%
Diesel 1.80 2.66 32%
LPG (for 14kg unit) 26.60 48.02 45%
Domestic energy has generally enjoys 30 to 40% subsidy from the government in ensuring the sold price are
within the reach of the mass. These energy subsidies may be direct cash transfers to producers, consumers, or
related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates, price controls,
trade restrictions, and limits on market access. The subsidies makes the fuel more affordable as it ensures
adequate domestic supply by supporting indigenous fuel production in order to reduce import dependency, or
supporting overseas activities of national energy companies.
2.1.3 Access to electricity:
Physical access:
Grid connection: 99.7 % of population in Malaysia
Urban/rural areas: 99.5% in Peninsular Malaysia, 77% in Sabah and 76% in Sarawak in 2009
Target group: The remote areas in Peninsular Malaysia, islands and the states of Sabah and Sarawak.
Generally, major populated areas are connected to efficient grid systems as below.
Source: Energy Commission
Rural Electrification Programme
Since the 1950s, rural electrification has been promoted as part of rural development programme to bring
about security and physical development to the rural areas in the then Malaya. Rural electrification of villages,
implemented through the then Central Electricity Board was initially supplied using diesel generators, mainly
for security reasons in the fight against communist insurgencies. Rural electrification has since been
incorporated as part of rural development programme and received allocation under its Five Year
Development Plans, beginning from the First Malaya Plan (1960-1965) and later in the First Malaysia Plan
(1966-1970) up to the present Tenth Malaysia Plan (2010 - 2015).
The rural electrification programme is aimed at providing electricity supply to homes and villages, which are
beyond the operational areas of the local authorities, including the ‘orang asli’ in Peninsular and the
indigenous groups of Sabah and Sarawak by means of extending the grid lines, provision of generator sets and
use of alternative energy such as SHSs and solar-hybrid system. Rural electrification forms part of efforts to
18
provide social amenities to enhance the quality of life and living standards among the rural communities.
Priorities for rural electrification programme will be to provided transmission lines best to 33kV lines, low
voltage line to the villages and to upgrade infrastructure of 12 hours to 24 hours electricity supply.
Since 1970s, rural electrification has been incorporated in the New Economic Policy (NEP) framework for
eradicating poverty and increasing the quality of life in the rural areas, especially of the rural poor. Increasing
use of electricity is expected to increase productivity and incomes in the agriculture, industry and commercial
sectors and also affect the modernization and attitudinal change in the rural sector.
Qualifying Criteria for different types of Electrification Programme
Extension of Grid
Lines Generator Set SHS Solar-Hybrid system
• Priority will be
given to villages
which have high
population and
available public
amenities such as
schools, clinics and
religious centres.
• Average cost for
the project is
estimated around
RM25,000 (USD
8,065) per house
• Easy assess to the
site via roads or
rivers
• Nearest grid lines
are more than
10km away
• Will not be
receiving any grid
line extension in
the next 5 years
• Average cost for
the project is
estimated to be
around RM15,000
(USD 4,839) per
house
• No proper road
leading to the area
• Will not be
receiving any grid
line extension in
the next 5 years
• Public amenities
will be given
priority
• No potential for
mini/micro hydro
system
• For housing unit,
maximum output is
100-150W capacity
• Nearest 11kV
overhead line is
more than 10 km
• No plan for grid
connection in the
next 3 years
• Depending on
locations where
project cost is
cheaper than grid
extension
• Clustered housing
units with at least
20 homes will be
given priority.
• Maximum output
shall be 50kW
capacity Source: MRRD / MESITA
Current Approach to Rural Electrification Programme under PEMANDU NKRA Rural Basic Initiatives: Rural development continues to be a fundamental component of the national agenda. Since Independence,
the government, via the many Malaya and Malaysia Plans, as above, has rolled out development initiatives for
roads, water, electricity and housing to ensure that the fruits of modernisation benefit all. In 2010, the Rural
Basic Infrastructure (RBI) NKRA was conceived to accelerate these efforts by delivering unprecedented big and
quick wins to rural communities. In 2011, the MRRD and the various implementing agencies were once again
tasked with spearheading RBI efforts. They continued to build upon the good momentum achieved in the
previous year and the rural landscape was further transformed for the better. Their efforts centred on
ensuring improved accessibility via new and upgraded roads, providing a clean, constant water supply and an
uninterrupted electricity supply, as well as building and refurbishing homes for rural communities. In 2010 and
2011 alone, a total of 54,222 houses have been benefitted under this programme. In 2012, it is targeted to
achieve 39,442 houses with allocated budget of RM 1 billion (USD 323 million).
19
Availability and reliability of supply:
Breakdown on Electricity (Gross Generation, Consumption, Installed Capacity, Peak Demand and Reserve
Margin) for Malaysia
Region Electricity Gross
Generation
Electricity Consumption Installed
Capacity
Peak
Demand
Reserve
Margin
GWh % GWh % MW MW %
Peninsular
Malaysia
95,120 90.0 87,950 91.3 22,173 14,245 55.7
Sarawak 6,068 5.7 4,539 4.7 1,220 996 22.5
Sabah 4,518 4.3 3,818 4.0 984 719 36.9
Total 105,706 100.0 96,307 100.0 24,377 Source: NEB 2009
Historically, though were very isolated cases, Malaysia had been impacted by several blackouts in the past.
The first major blackout was in 1992 when lightning struck a transmission facility causing rolling failure in the
transmission and distribution system. Another blackout occurred in 1996, which occurred due to the tripping
of a transmission line near the Sultan Ismail power station in Paka, Terengganu. Another outage happened in
2003 in the southern area of peninsular Malaysia due to a power outing. Finally the latest outage was in 2005
and was due to a fault in the main cable transmission line grid near Serendah, Selangor. For the past 10 years,
Malaysia’s grid supply has been good and un-interrupted and going into average interruption data, according
to System Average Interruption Duration Index (SAIDI) report, Malaysia has improved quality of supply
compared to the previous years where in Peninsular it has recorded 4% in Peninsular and decreased 76% in
Sabah between 2009 and 2010. Malaysia generally has a stable and consistent power supply.
Affordability:
Tariffs (as of April 2012)
Tariffs (in USD/kWh)
Power companies Domestic Commercial (low voltage) Industrial (low voltage)
Tenaga Nasional Bhd (TNB) 6.97 (1-200 kWh) 12.57 (1-200 kWh) 11.03 (1-200 kWh)
Sabah Electricity Sdn Bhd
(SESB)
5.59 (1-100 k Wh) 10.56 (1-200 kWh) 10.23 (for all kWh)
Syarikat SESCO Bhd (Sarawak) 10.88 (1-100 kWh) 12.79 (1-100 kWh) 12.79 (1-100 kWh) (Source: TNB, SESB, SESCO)
The charge of tariffs imposed on the domestic use is much lower to the ones imposed on the commercial or
industrial scales making it affordable of the household expenditure scale. The government also continues the
the Lifeline Band which is at 200kWh/month. The Lifeline Band ensures domestic consumers in the 1 to
200kWh per month band to be secluded from the recent electricity tariff increase since 1997. Around 3.3
million households will continue to enjoy the subsidised rate of 21.8 sen/kWh ( USD .07/kWh) . This number
of households safely encompasses all 200,000 poor households (i.e. income less than RM750 per month).
Share of utility bills in household incomes:
As of 2005, the urban and rural shares of electricity expenditure were respectively of 3.12% and 2.74% of
household income. Table in the 2.1.2 Affordability section shall be referred.
Subsidies:
A subsidy of 30 % to 40 % is given on average of kWh use.
Sustainability
In 2010, the Electricity Commission Report (ST) highlighted that Peninsular Malaysia could face a power
shortage by 2015 if the generation capacity did not grow. This was based on a demand growth trend of
between 5% and 8% every year that could result in the electricity reserve margin dropping below 20% by
2015, from the current healthy level of around 55.7%, if supply growth do not keep pace. The government is
currently exploring various alternatives for new planting up.
20
Share of renewable energy sources (RES) in power mix:
Share of sustainable biomass and other RES:
Type of RE Capacity of generated energy connected to the grid
(MW)
Biomass 30
Solid waste 5.5
Biogas 2
Mini hydro 2
Solar PV 1
Others (wind) 23.5
64
As for 2010, RES accounted for less than 1% of total generated electricity.
21
2.2 ENERGY EFFICIENCY vis-à-vis GOAL OF SE4ALL
2.2.1 Overview and Assessment
Energy efficiency (EE) measures (including demand side management) have been ongoing since the 7th
Malaysia Plan period (1996-2000) and in 10 Malaysia Plan, it has been intensified to harness energy savings
potential and reduce Malaysia’s carbon emissions and dependence on fossil fuels. Intrinsic barriers to energy
efficiency that pose challenges in capturing this opportunity are being addressed. EE covers the efficiency of
power generation, transmission and distribution of electricity as well as various end uses of energy such as in
the industrial, commercial and residential. In other words it can be divided into supply and demand side
perspectives. In the recent 10th Malaysia Plan (2011-2015), the key emphasis is on the short-term goals
vested in National Green Technology Policy (2009), these include promotion of EE for power producer,
establishment of EE targets and standards.
The Efficient Management Of Electrical Energy Regulations which was launched in 2008, under “Electricity
Supply Act 1990” require premises which consume more than 3,000,000kWh over a period of 6 months, to
submit status reports to the “Energy Commission”, Malaysia including the establishment of an energy
management system. The government is currently exploring the possibility of establishing a revised National
EE Master Plan including an Act to spearhead EE further. PEMANDU together with MEGTW, has launched the
SAVE programme as part of a nation-wide market transformation exercise towards the use of energy efficient
appliance.
There are a number of completed and ongoing projects which will support national EE programme such as the
DANIDA Capacity building in integrated resources planning at government and related agencies, DANIDA’s
Center on Training on EE & RE (CETREE) Capacity building project, MEGTW Low Energy Office (LEO) at
Putrajaya; TNB’s Demand Side Management, Green township, JICA’s Low Carbon Society (LCS) in Iskandar
Development Region, UNDP /GEF Malaysia Industrial Energy Efficiency Improvement Project and the
UNDP/GEF Building Sector Energy Efficiency Project (BSEEP).
SAVE or Sustainability Achieved via Energy Efficiency, is a program spearheaded by the Ministry of Energy,
Green Technology and Water to improve energy efficiency in Malaysia. It is launched in 2011 as a quick start
programme to encourage residential users to change into energy efficient appliances when making new
purchases. It is to create a culture of efficient energy usage among general public and business entities. This
initiative targets the final end user through the retailers of electronic appliances and it is targeted to provide
national savings up to 7,300 GWh of energy saved by the year 2020. It is also to accelerate the transformation
of the consumer appliances market to increase the share of Energy Efficient (EE) models and to phase out
inefficient models from the local market so as to reduce the price premium for EE products. 100,000 rebate
vouchers for 5-Star rated refrigerators and 65,000 vouchers for 5-Star rated air conditioners have been
allocated to states across Malaysia. Rebates will be awarded on a first-come, first-served basis to qualified
domestic consumers who purchase 5-Star rated refrigerators, air conditioners or chillers during the rebate
offer period through participating retailers. As date, over more than 4,000 retail outlets nationwide are
registered with KeTTHA under the SAVE Rebate Program, with 12 different brands to choose from. The rebate
program starts on July 7, 2011 and will last until all rebates are taken at the end of 2012. To date, about 12.4
per cent and 7.1 per cent of market share of five-star rated energy efficient refrigerators and air conditioners
respectively have been recorded through the initiatives being implemented, with total energy saving
accumulation of 66.3 GWh.
Under the PEMANDU Energy, Oil and Gas cluster, EPP9, Malaysia will focus on five relevant levers to
improve EE which are,
1. to lead by example on energy-efficiency practices and philosophy,
2. to stimulate sales of energy-efficient appliances,
3. the Government will work with TNB to make co-generation economically viable,
22
4. to regulate better insulated buildings and
5. to stimulate the sale of energy-efficient vehicles.
In March 2011, it was announced that Faber Group Berhad will spearhead the pilot project for the Energy
Performance Management System (EPMS) for government entities. Faber has commenced and completed
energy audits at five hospitals in the northern states of Peninsular Malaysia. To stimulate the use of fuel
efficient cars, the import duty on all hybrid cars has been exempted, bringing the cost of hybrid models such
as the Toyota Prius and Honda Insight to more competitive levels. Sales of hybrid cars are expected to achieve
record highs in 2011. This exemption was extended to the end of 2013 in the recent Budget 2012
announcement. The implementation of Energy Performance Contracting (EPC) in 120 top energy- using
government buildings will be further explored for implementation in all government buildings and private
properties.
2.2.2 Energy intensity of national economy:
(Source: 2010 MDG report)
2.2.3 Industrial Energy Intensity
Industrial Energy Intensity stands at 78 toe/RM million in 2009 (NEB 2009)
Under the Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP) from 2000-2007 which was
funded by United Nations Development Program (UNDP), Global Environmental Facility (GEF), private sector
and Government of Malaysia, eight industrial sectors, cement, ceramic, food, glass, iron & steel, pulp & paper,
rubber and wood has been identified to have the potential to promote and improve energy efficiency.
Electrical Energy- use Equipment has been produced to give a the guidelines to encourage industries to adopt
energy efficiency practices and improving their energy utilization for a commonly used equipment such as
fans, motors, pumps, chillers, transformers and air-compressors. A standard general energy audit guideline,
the Industrial Energy Audit Guidelines shall be used as a reference material by energy consulting firms in their
audit services to industries. There are 54 energy audits in the eight industrial sub sectors under MIEEIP. The
project has highlighted a number of important issues and some significant lessons have been learnt. The
experiences and the outcomes in the form of industry involvement and the demonstration models will provide
exemplars for further steps in energy efficiency throughout Malaysia.
2.2.4 Residential Energy Consumption
Residential Energy Consumption is at 3042 ktoe in 2012 (NEB 2009).
EE appliances which participated in the voluntary rating programme are Refrigerators, Domestic Electric Fans,
Ballast for Fluorescent Lamps, Electric Lamps, Air Conditioners (Split Unit), Televisions, High Efficiency Motors
and Insulation Materials. Out of these eight appliances only four (4) appliances have participated in the
voluntary ‘star labelling’ programme (as below) which are televisions, refrigerators, Domestic Electric Fans and
Air Conditioners (Split Unit).
23
Sample of a Malaysian voluntary labelling programme
2.2.5 Potential cumulative energy savings by 2015
The 10 Malaysia Plan estimated that there would be a potential cumulative energy saving of 4,000 ktoe by
2015.
As explained, the national energy efficiency master plan will be drawn up and measures such as phasing out
incandescent light bulbs and requiring more devices to have EE labelling will be introduced. In addition, there
will be a ratings system for green townships, led by Putrajaya and Cyberjaya, along with minimum energy
performance standards for equipment and machinery.
24
2.3 RENEWABLE ENERGY vis-à-vis GOAL OF SE4ALL
2.3.1 Overview and Assessment
Policy on renewable energy (RE) has been mainstreamed and recognised as early in the year 2000. The advent
of the Fifth fuel policy has further reinforced Malaysia’s position in developing the RE industries. It was
initially targeted to contribute 5% of the country’s electricity demand by year 2005 and the Small Renewable
Energy Program (SREP) was launched in May 2001 under the initiative of the Special Committee on Renewable
Energy (SCORE) aimed to support the government’s strategy in intensifying the development utilization of RE,
where by 2005, equal to between 500 and 600 megawatt (MW) of installed capacity to be made available. The
policy has been reinforced by fiscal incentives, such as investment tax allowances and accelerated capital
allowance which encourages the connection of small renewable power generation plants to the national grid.
The buy-back tariff started with a fixed price from RM 0.17/kWh (USD 0.055 /kWh), RM 0.19/kWh (USD 0.062
/kWh) and finally RM 0.21/kWh (USD 0.067 /kWh). However, despite the efforts, RE pricing was seen still
unattractive to compete with the level playing field with the fossil-fuel tariff and a need to restructure the RE
industries was needed.
On 2nd April 2010, the Cabinet approved the National Renewable Energy Policy and Action Plan that would be
the cornerstone for a more aggressive deployment of RE in the country. The policy and objectives of the
National Renewable Energy Policy and Action Plan are to enhance the utilisation of indigenous RE resources to
contribute towards national electricity supply security and sustainable socioeconomic development. Finally, in
2011, Malaysia’s Parliment gazzeted the Renewable Energy Act (RE Act) and the Sustainable Energy
Development Authority (SEDA) to spearhead the RE in Malaysia. Its key role is to administer and manage the
implementation of the feed-in tariff (FiT) mechanism where the resources focused as of now are biomass,
biogas, mini-hydropower and solar energy. Applications for the FiT opened on 1 December 2011, with quota
for solar photovoltaic cells of 150MW, biomass (including solid waste) of 240MW, biogas (including landfill) of
90MW and small hydro of 150MW offered to any interested party through an open online application system.
The quota allocation for solar photovoltaic up until 2014 was almost fully applied for within 24 hours of its
launch, whilst applications for quota allocation for biomass, biogas and small hydro have been similarly
encouraging.
Installed Capacity (MW) of Plants in Progress
Year
Bio
ga
s (
Lan
dfi
ll /
Sew
ag
e )
Bio
ga
s
Sma
ll H
ydro
Bio
ma
ss (
Solid
Wa
ste
)
Bio
ma
ss
Ind
ivid
ua
l
No
n-
ind
ivid
ua
l (≤
50
0 k
W)
No
n-
ind
ivid
ua
l (>
50
0 k
W)
Ho
usi
ng
De
ve
lop
er
Total
2012 8.36 5.38 9.2 8.9 33 6.53 2.37 61.02 0 134.75
2013 4 2.8 28.3 0 48.5 2.86 3.28 58.5 0 148.25
2014 0 0 42.05 0 6 0 0.79 30.53 0 79.37
Cumulative 12.36 8.18 79.55 8.9 87.5 9.39 6.45 150.05 0 362.37
Source: SEDA’s Website September 2012
Currently, electricity generation from RE sources is very costly and not competitive with large scale plants
using conventional fossil fuel sources. The higher cost per unit has made investment in RE not attractive to
investors and electricity utility. The objective of FiT is to spur RE growth in Malaysia. FiT will be used to
subsidise the difference between the premium tariff rate and the current selling price of a unit of electricity
from RE developers to TNB under the SREP programme (i.e. at a maximum price of 21 sen/kWh).
25
2.3.2 On-grid and off-grid renewable energy
Category Mini-hydro Biomass & biogas Solar PV Wind Total
Grid-
connected
(MW)
23.8
32
1
-
56.8
Off-grid (MW) - 447 6.1 0.2 453.3
Total 23.8 479 0.2 7.1 510.1 On-grid and off-grid RE in MW, Source: Energy Commission 2010
RE Operational Capacity
(source: SEDA’s website August 2012)
As RE Act has recently started in December 2011, progress on RE projects with FiT is relatively new and many
still in planning and commissioning stage. As date, 43.90 MW capacity has been in operation.
Use of renewable energy sources (RES) for thermal applications (cooking/heating)
As date, there is no official record on Malaysia’s rural using RE for cooking and heating.
Use of RES for productive activities
As date, there is no official record on Malaysia’s industries using RE for cooking and heating. However, there
were research projects undertaken by the National University of Malaysia (UKM) and Malaysia Research and
Development on Agriculture Industries (MARDI) on the use of solar drying for agriculture products.
26
2.4 SE4All GOALS
2.4.1 Energy Access
Malaysia is committed to ensuring universal access to modern energy services and providing 100% electricity
to the rural area. Under the Government Transformation Programme, universal access is targeted to be
achieved 2015. Targets for additional houses to be supplied with electricity are about 6,000 houses in
Peninsular Malaysia, 59,000 houses in Sabah and 76,000 houses in Sarawak.
2.4.2 Energy Efficiency
The National Energy Efficiency Master Plan, 2010 is a holistic implementation roadmap to drive efficiency
measures across sectors with a target to achieve cumulative energy savings of 4,000 kilo ton of oil equivalent
(ktoe) by 2015 according to the 10 Malaysia Plan.
2.4.3 Renewable Energy
The share of renewable energy sources in the electricity sector will be increased from less than one percent
today to 5.5% in 2015 (985 MW). The doubling of rate on the use of RE at the national context (based on
business-as-usual scenario and upon the successful introduction of FiT) may happen middle of 2013.
RE Generation Capacity Targets under FiT (MW)
Year Biogas Biomass Solid
Waste Hydro Solar
PV TOTAL
2011 20 110 20 60 9 219
2012 35 150 50 110 20 365
2013 50 200 90 170 33 543
2014 75 260 140 230 48 753
2015 100 330 200 290 65 985
2016 125 410 240 350 84 1,209
2017 155 500 280 400 105 1,440
2018 185 600 310 440 129 1,664
2019 215 700 340 470 157 1,882
2020 240 800 360 490 190 2,080
2025 350 1,190 380 490 455 2,865
2030 410 1,340 390 490 1,370 4,000
27
SECTION 3: CHALLENGES AND OPPORTUNITIES FOR ACHIEVING SE4ALL
GOALS
3.1 INSTITUTIONAL AND POLICY FRAMEWORK
3.1.1 Energy and development
Energy in national development and poverty reduction strategies and plans
Energy is an important factor to Malaysia’s economic growth, constituting about 20 per cent of the nation’s
Gross Domestic Product (GDP). The Government plans to increase diversification of the energy industry, step
up exploration for new oil and gas resources, enhance production from known reserves, and encourage the
use of alternative energy sources such as solar, hydro-electric and even nuclear. The energy sector’s
contributions to our GNI are expected to rise from RM110 billion in 2009 to RM241 billion in 2020. Hence, the
energy sector needs to be more efficient and resilient to be able to deliver adequate and reliable energy
supply to support our country’s rapid growth against a backdrop of depleting energy resources as well as
escalating and volatile energy prices.
0
20,000
40,000
60,000
80,000
100,000
120,000
0
100,000
200,000
300,000
400,000
500,000
600,000
GD
P (
RM
Mill
ion
)
Trend: GDP vs Electricity Consumption
There is a strong correlationship between the rate of electrification and the reduction of poverty level in
Malaysia, although it will only due to rural electrification factor alone. Strong poverty alleviation programme
especially in the beginning of 1970s together with extensive completion of rural basic infrastructure (roads,
water, sanitation, schools and clinics) including rural education have contributed to the success of the poverty
eradication programme. The rise of electricity consumption is in tandem with the growth of GDP.
Energy governance:
Energy policy in Malaysia is set and overseen by the Economic Planning Unit (EPU), with close coordination
with the line ministries (MEGTW, on electricity matters) and agencies (i.e. Energy Commission and SEDA).
MEGTW regulates the non-oil and electricity sector (and gas energy and security sectors) while EC regulates
the energy supply activities and enforces energy supply laws. SEDA, is a newly set up statutory body formed
under the Sustainable Energy Development Authority Act 2011 whose role is to administer and manage the
implementation of the feed-in tariff mechanism mandated under the Renewable Energy Act 2011. Malaysia
Green Technology Corporation (MGTC) from time to time provides promotion, policy research and awareness
support to MEGTW related to green technology including RE and EE initiatives.
28
Linkages of Electricity Institutions related to Rural Electrification Projects
With respect to oil and gas industries, Petroliam National Berhad (PETRONAS), holds exclusive ownership
rights to all oil and gas exploration and production projects in Malaysia, for all licensing procedures, and is
subject to only the Prime Minister, who also controls appointments to the company board. The company
holds stakes in the majority of oil and gas blocks in Malaysia. It is the single largest contributor of Malaysian
government revenues, (over 40 percent in 2010), by way of taxes and dividends. Malaysia's oil and gas policy
has historically focused on maintaining the reserve base to ensure long term supply security while providing
affordable fuel to its population. In July 2010, the government introduced subsidy reductions for gasoline,
diesel, and liquid petroleum gas (LPG) with the aim of gradually decreasing fuel subsidies to reduce
expenditures. Further cuts in fuel subsidies are planned.
Generally, Malaysia plans for adoption of market-based energy pricing, in line with overall strategy to
rationalize subsidies where energy subsidies will be reduced, with the goal of achieving market pricing by
2015. Gas prices for the power and non-power sectors will be reviewed every six months to gradually reflect
market prices. A decoupling approach for energy pricing will be undertaken to explicitly itemize subsidy value
in consumer energy bills and eventually delink subsidy from energy use. For low-income households and other
groups for which the social safety net is required, different forms of assistance will be provided. Malaysia also
belives in the stronger governance of the energy sector where the goal to raise productivity and efficiency. In
this regard, the gas supply industry will be further liberalized to facilitate the entry of new suppliers and third-
party access arrangements. The electricity supply industry will also be restructured to instil greater market
discipline.
3.1.2 Thermal energy for households
LPG industry in Malaysia is currently dominated by state owned Petronas followed by Shell and Esso among
others while piped gas supply is regulated by the EC.
E P U
- formulates overall policy on rural development
- incorporates impacts of infrastructure
development to social and economic growth
MOE - rural school
electrification
MOH - rural clinic
electrification
PWD / TNB - project
implementer
PWD / TNB - project
implementer
MRRD receives information on rural
development programme
including rural electrification
(basic infrastructure)
MEGTW - guardian of the MESITA fund
- energy policy
SubContractors - installations /
maintenance
SubContractors - installations /
maintenance
SubContractors - installations /
maintenance
EC:
Regulates electricity
industry
SEDA:
Administrator of RE Act
MGTC:
Energy R&D on EE /RE
PWD / TNB - project
implementer
PEMANDU / ICU /
State EPUs
Oversee
implementation
29
3.1.3 Power sector
MEGTW is the responsible ministry and the utility are provided by the utility companies (TNB in Peninsular
Malaysia, SESB in Sabah and SESCO in Sarawak.
3.1.4 Modern energy for productive sectors
RE is poised to be connected with up to 5.5% of total generation mix by 2015. MEGTW is responsible on the
execution of the RE Act policy while SEDA is to administer the FiT mechanism under the RE Act.
3.1.5 National monitoring framework for SE4ALL
Proposed indicators to measure and monitor achievement of national SE4ALL goals
Energy access indicators:
- Country rural electrification rate
- Share of households with access to electricity/energy for cooking & heating
- Impacts of electricity to rural people
EE indicators:
- Average electricity consumption of households
- Primary and final energy intensity by sector
- Efficiency of total electricity generation
- GDP / unit of Energy Used
- Energy Used per capita
RE indicators:
- Share of renewables in gross electricity consumption
- Share of renewables in electricity generating capacity
- Share of households using modern energy for heating/cooking
Data requirements, gaps and associated capacity development needs
Related to 3.5
30
3.2 PROGRAMS
3.2.1 Thermal energy
Programme
LPG for cooking has been widely used. As date, there is no program on the use of thermal energy from RE for
domestic cooking and heating. Use of charcoal from biomass briquette is negligible.
For industrial usage, efforts are already on going on the use of RE sources from industrial by-products (i.e.
wood chips, MDF waste, saw dust, empty fruit bunch) mainly for producing steam (low pressure/ high
pressure) for manufacturing processes.
Sustainability
Research and development and pilot projects on briquette / pellet production especially from biomass palm
oil waste (EFB/blended) and rice husk has already in existence. Commercial production has yet to be fully
taken off. The processing cost is estimated at RM 150 per tonne and the selling price for export market at RM
600 to RM 700 per tonne.
3.2.2 Power sector
Physical access (electrification)
As at date, rural electrification has successfully penetrated 99% of the country, 99.5% in Peninsular Malaysia,
77% in Sabah and 76% in Sarawak (10 Malaysia Plan)
Reliability (grid maintenance/upgrade)
The utility companies (TNB, SESB, SESCO) has ongoing programme on ensuring continuous supply of power.
Sustainability (investment in renewable energy, on-grid and off grid, and energy efficiency)
The advent of RE Act has allowed the use of RE sources for power generation. Refer 2.3 for details.
3.2.3 Energy efficiency programs
Sector Initiatives
Residential • Phasing out of incandescent light bulbs by 2014 to reduce carbon dioxide
emissions by an estimated 732,000 tons and reducing energy usage by 1,074 GW
a year.
• Increasing energy performance labeling from four (air conditioner, refrigerator,
television and fan) to ten electrical appliances (six additional appliances - rice
cooker, electric kettle, washing machine, microwave, clothes dryer and
dishwasher).
• Labeling appliances enables consumers to make informed decisions as they
purchase energy efficient products.
• Robust tariff structures (“the more you use, the more you pay principle”) to
encourage energy saving and avoid wastages.
• Encourages use of passive designs at home
Township • Introduction of guidelines for green townships and rating scales based on carbon
footprint baseline and promoting such townships starting with Putrajaya and
Cyberjaya.
31
• Implementation of the newly formulated Low Carbon City Framework (LCCF) to
encourage less GHG emissions especially from energy usage
• Promotes energy efficient / multi modal public transport system
Industrial • Increasing the use of energy efficient machineries and equipment such as high
efficiency motors, pumps and variable speed drive controls.
• Encourages energy benchmarking among subsectors of industries
• Encourages the setting up of Energy Management Team to look into energy
consumption and measures and Energy Manager
• Encourages the use of ISO 5000 energy Management System
• Mandatory reporting of the energy usage and its management plan for electricity
users of 500,000kWh / year
Buildings • Introduction of Minimum Energy Performance Standards for selected appliances
to restrict the manufacture, import and sale of inefficient appliances to
consumers.
• Promotes the use of rating tools such as the Green Building Index (GBI), LEEDS
and CIDB Pass
• Promotes the Life-Cycle analysis (“cradle-to-cradle”) for building construction
industries under Carbon Common Metric (CCM)
Transport • Effective public transportation system
• Use of Bus Rapid Transit in Iskandar Development Region (pilot phase) Source: EPU 10MP
3.2.4 Modern energy for productive use
Sector Initiatives, currently ongoing
Community
Livelihood • Use of micro-hydro system for electricity generation
• Use of solar hybrid for electricity generation
• Solar home system (per household) for rural area
• Use of grid-connected solar PV system
Agriculture • Use of solar drying in processing agriculture products (pilot stage)
• Use of micro-hydro system for pumps ( irrigation)
Energy Supply • On-grid: Introduction of feed-in-Tariff for wide spread electricity generation from
RE sources (biomass, biogas, PV, mini-hydro)
• Off-grid: promotes the use of hybrid-diesel, micro-hydro and wind
Industries • Use of biomass/biogas for in-house electricity generation use
• Use of biomass/biogas for use in the manufacturing processes (heating)
Education • Use of solar PV for rural schools for ICT and communication
Transport • Initiated Electric Vehicle piloting in Putrajaya, Cyberjaya and Bukit Bintang. It is
planned that charging station will be of hybrid solar/RE type in the near future
(including smart-grid connectability)
3.3 FINANCING
Government’s allocation: Financing for basic infrastructure (water, roads and rural electrification) comes
from the government development budget.
Feed-in Tariff (FiT): Financing for Feed-in Tariff (FiT) is currently based on of 1% of electricity usage for
consumers who are using more than 300kWh per month. It is estimated the amount to be RM 1 billion per
year to be placed under the Renewable Energy Fund, to be administered by SEDA.
32
Fiscal and Financial Incentives: Since 2001, in order to promote EE and RE, companies implementing RE & EE
measures in their premises may be granted investment tax allowance, accelerated capital allowance, import
duty exemption and sales tax exemption.
Green Technology Financing Scheme (GTFS): In the budget speech for 2010, Dato’ Seri Najib Tun Abdul
Razak, the Prime Minister of Malaysia announced the establishment of Green Technology Financing Scheme
amounting to RM1.5 billion as an effort to improve the supply and utilization of Green Technology. The
scheme could benefit companies who are producers and users of green technology. In operationalizing it, the
Government will bear 2% of the total interest/profit rate. In addition, the Government will provide a
guarantee of 60% on the financing amount via Credit Guarantee Corporation Malaysia Berhad (CGC), with the
remaining 40% financing risk to be borne by participating financial institutions (PFIs).
The Prime Minister also appointed MGTC as the conduit for the Green Technology Financing Scheme (GTFS)
application. The scheme is expected to provide benefits to more than 140 companies of which the application
will be open starting from 1st January 2010. It is also a mechanism that helps finance any technology that is
suitable for the identified project criteria provided it is a proven technology. GTFS requires that projects must
be located within Malaysia, utilising local and/or imported technology. Private companies that could benefit
from this financing scheme are “PRODUCER” or “USER” of green technology products or systems, as follows
FEATURES PRODUCER OF GREEN TECHNOLOGY USER OF GREEN TECHNOLOGY
Financing size Maximum: RM50 million per company Maximum: RM10 million per company
Financing tenure Up to 15 years Up to 10 years
Eligibility criteria
Legally registered Malaysian -owned
companies (at least 51%) in all economic
sectors
Legally registered Malaysian -owned
companies (at least 70%) in all economic
sectors
Participating financial
institutions (PFIs)
All commercial and Islamic banks.
GFIs: Bank Pembangunan, SME bank, Agrobank, Bank Rakyat, EXIM bank and Bank
Simpanan Nasional
(source: MGTC)
Malaysia Electricity Supply Industry Trust Account (MESITA): MESITA was formally established on 1 January
1997 under a Trust Deed issued by the Ministry of Finance. The decision to establish MESITA was made by the
Malaysian Cabinet on 11 December 1996 which required all Independent Power Producers (IPPs) to fulfil their
national obligation towards the development of electricity supply industry in the country. To reflect their role
in the comprehensive contribution to electricity supply industry, the concept of social obligation which was
used in the initial establishment of MESITA was later changed to national obligation after discussions were
held between MEWC, TNB and the IPPs. The Independent Power Producers (IPPs) which sell electricity to the
Peninsular Grid make contributions annually to the Trust Account. The rate agreed by the contributors is
pegged at one percent (1%) of the total audited annual turnover of the previous year. This rate will remain
until 2005 and thereafter a review of the rate will be done. The accumulated income of MESITA for the year
1998 to 2002 was RM 365,454,420.94 (USD 117,888,522.8 millions). All the IPPs contributed 1% of their
annual turnover from their audited accounts. Throughout its existence, MESITA managed to play a catalytic
role in carrying out the development programme of the electricity supply industry on a sustainable basis. Prior
to the existence of MESITA, all programme were implemented on a piece-meal and ad-hoc basis by agencies in
the electricity sector. These applications were localized and confine to their respective organizations and were
not industry-focused. The rural electrification project under the MESITA fund from 1998 to 2010 recorded
expenses of RM148,089,209.19 (USD 48 million) to upgrade and provide infrastructure for rural electrification
programme. As a result, a total of 41,218 houses are connected to the grid and 7,652 houses are connected to
the solar hybrid system especially for indigenous communities in Peninsular Malaysia.
The type of projects allowed under the MESITA Trust Deed are as follows:
1. Rural electrification programme;
33
2. Research and development (R&D) programme for the electricity industry including R&D on the
development of new and renewable sources of energy;
3. Training and educational programme for human resource development in the electricity sector;
4. Energy efficiency (EE) programme; and the promotion and development of the electricity supply
industry;
5. The promotion and development of the electricity supply industry.
3.4 PRIVATE INVESTMENT AND ENABLING BUSINESS ENVIRONMENT
3.4.1 Thermal energy for households
Private sector actors involved in supply chain (energy supply companies, technology providers, financiers)
LPG for cooking is readily available in local sundries and is sold by public companies and private entrepreneurs.
Barriers to private investment in modern energy supplies and technologies for cooking and other thermal
applications
None significant as date
3.4.2 Power sector
Private sector actors involved in supply chain
Tenaga Nasional Bhd. (TNB) is the largest electricity utility company in Malaysia with a total installed
generation capacity of ore than 15,000 MW.
Syarikat SESCO Bhd (formerly Sarawak Electricity Supply Corporation, SESCO) is the privatized
organization responsible for the generation, transmission and distribution of
electricity for the Sarawak state in Malaysia.
Sabah Electricity Sdn. Bhd SESB) is a company that generates, transmits and distributes electricity mainly
in Sabah and Federal Territory of Labuan. SESB is a subsidiary of TNB.
Independent Power
producers (IPP)
Responsible of about 70.78% (19,237 MW) of electricity generation in
Malaysia representing 17 different companies.
RE Developers No official record but it estimated that there are more than 100 companies
who are currently expressed interest in participating in SREP and FiT.
Barriers to private investment in new on-grid and off-grid power generation capacity (especially for RES), grid
extension/maintenance, demand-side management (DSM) and energy efficiency
Type Description Impacts
Institutional
barriers
Lack of institutional support especially on
the use of renewable energy (either for
thermal or off-grid electricity) in the rural
area.
Lack of functioning institutional network on
RE could be overcome by encouraging joint
effort between government agencies (federal
and state) and private institutions in order to
explore the technical and commercial viability
of energy generation from renewable
resources and enhancing capacity building of
key players such as government decision-
makers, industries and utilities on RE
implementation. RE
Data /
Information
barriers
Insufficient/limited data availability on the
use of energy in the rural area
Impacts of rural electrification on small and
medium enterprises (and to poverty
alleviation) in rural areas have not been
extensively documented. Neither does the
34
present framework of datum identifies these
enterprises by their location i.e., rural or
urban.
Financial and
Incentive
barriers
• Level playing field: Due to higher
commitments accorded to
development or expansion plans,
renewable energy is given a lower
priority by Malaysian enterprises.
There is a clear need for refocusing
the energy fuel mix in the country’s
energy equation to give importance
to renewable energy.
• Special funds for energy delivery in
rural: set up by the government to
promote small and medium
enterprises (i.e SMIDEC’s funds) do
not target entrepreneurs involved in
energy service delivery such as
enterprises in solar energy business.
There is, at present, lack of incentive
to these enterprises to operate in
rural areas. There are a number of
enterprises in rural area, which
utilize energy, particularly electricity
for lighting and motive power. Rice
mills, oil mills, weaving enterprises,
batik and crafts in rural areas
benefit from the use of electricity.
Provision of electricity enables these
enterprises to work long hours.
• The subsidy for conventional fuel source
should be gradually eliminated and/or
transferred to RE resources to promote
RE installations.
• In agro-based industries, loans can be
utilized for purchase of farm equipments
and machineries, which utilize efficient
electricity. Fish processing and agro-
processing industries in rural areas are
potential or actual beneficiaries of rural
electrification. Reliable supply of
electricity in rural areas enables
fishermen in coastal areas to keep their
daily catch in freezers. Provision of
electricity enables cottage industries to
work long hours and improve their
productivity and income. Female
members of the community who work in
these enterprises also benefit from the
increased income and output due to the
provision of electricity services.
3.4.3 Modern energy for productive sectors
Similar to the above 3.4.2
35
3.5 GAPS AND BARRIERS
Section on gaps and barriers on Thermal energy for household, Power sector and Modern energy for
productive sectors will be summarized as below.
Barriers SE4ALL Objectives
Universal Access EE RE
Institutional
No major issues noted.
MRRD remains as the
focal point for the rural
basic infrastructure
programme. EPU, ICU
and PEMANDU oversee
the implementation
progress including rural
energy planning.
No major issues noted in the
electricity sector.
MEGTW is the focal point for
the development of EE
policies supported by EC and
SEDA.
Energy use in transport
remains as a challenge as
there is clearly an absence of
a dedicated agency in
charged on it.
No major issues noted in
the grid-connected
electricity. MEGTW is the
focal point for the
development of RE
policies with SEDA as the
administrator of the FiT
mechanism.
Use of RE (such as
biofuel) in transport
remains as a challenge
due to unseen economic
benefits (vs fossil fuel) as
per the current oil price.
Regulatory No major issues noted.
Lack of a dedicated
regulatory mechanism on EE
hampers efficient energy
utilization in industrial,
residential, commercial and
the transportation sectors. It
is noted that
Efficient Management Of
Electrical Energy Regulations
2008 has been in operation
since 2008
No major issues noted.
Technical
No major issues noted.
The remaining grid-
extension remains a
challenge due to the
limited number of final
connections / houses
No major issues noted. EE is
looked mainly at sectoral
level (buildings, energy
supply, energy demand,
industrial and transportation
sectors)
No major issues noted.
Innovative ideas such as
pooling FiT and new RE
sources (which are not
part of the current FiT
scheme) such as wind
and geothermal are not
currently not the national
priority.
Awareness /
Promotion No major issues noted
Public awareness on the use
of energy (electrical and
domestic energy) is low due
to cheap and abundant
supply. The government is
fully aware and is currently
considering subsidy
rationalization in stragerred
No major issues noted.
36
basis. Use of public transport
has been in increasing trend
due to the improved
infrastructure.
Financing
No major issues noted as
both fuel for domestic
energy (LPG) and
transport are market-
based.
Financing for EE projects
remains a challenge due to
limited successful cases on EE
project financing. The
government is currently
supporting Energy
Performance Contracting in
selected hospitals.
Financing for RE projects
remains a challenge due
to limited successful
cases on RE project
financing. Cost of
technology is still
considered high.
37
REFERENCES
1. 10 Malaysia Plan, EPU 2010
2. Economic Planning Unit, Economic Monitor, website September 2012
3. ETP Energy, Oil and Gas, PEMANDU 2011
4. GTP Annual Reports, PEMANDU 2011
5. IEA Report / website September 2012
6. MDG Report, EPU and UN Country Team, 2010
7. National Energy Balance 2009
8. PRODUCTION OF PALM-BASED BIOMASS BRIQUETTES. MPOB, 2006
9. Suruhanjaya Tenaga Statistics 2010
10. UNDP Human Development Report, 2011
11. World Bank Country Data, website September 2012
FINAL Draft: 19 Sep 2012 INTERNAL USE & FOR CONSULTATION ONLY
38
Annex 1: Other Initiatives related to SE4ALL
No Project Name Period Implemented
by Activities
Related to SE4ALL
Objectives
Universal
Access EE RE Remarks
Pipeline projects
1 Third National
Communication
2013-
2016
UNDP and
NRE
• Develop GHG Inventory
• Formulate mitigation measures
• Recommend adaptation actions
• Build capacities of public and private sectors
(industries, residential and commercial
developers)
�
�
�
under formulation
phase
2
Green Technology
Application for the
development of the
Low Carbon Cities
(GTALCC)
2014-
2019
UNDP, GEF
and MEGTW
• Promote widespread use of EE and RE principles
in the cities
• Build capacities of town/city planners in adopting
green technologies to mitigate GHG (technical,
financing and awareness)
• Develop guidelines and standards
�
�
Under formulation
phase
3
GHG Bi-Annual
Update Reporting
(BUR)
2013-
2015
UNDP and
NRE Updates of GHG Inventory
� �
Under negotiation
4
Solar Thermal for
Industrial and Heating
application
2015-
2018
UNIDO and
MIGHT
• Promote the Use of solar thermal for industrial
use
• Develop standard and guidelines
• Build stakeholder’s capacities in understanding
solar thermal technology
� �
Under formulation
phase
5
Low Emission Capacity
Building Project (LECB)
2013-
2015
UNDP and
NRE
Build national capacity in the development of Low
Emission Development Strategies (LEDS), Nationally
Appropriate Mitigation Actions (NAMA) and
Measurements, Reporting and Verification (MRV)
� �
Currently in
preparation phase
39
No Project Name Period Implemented
by Activities
Related to SE4ALL
Objectives
Universal
Access EE RE Remarks
On-going Projects
6
Reducing Emission
from Deforestation
and Land Degradation
plus (REDD+)
2011-
2013
UNDP and
NRE
Formulating REDD+ National Strategies
Increase readiness phase for Malaysia �
7 Economics of Climate
Change Study
2011-
2013
UNDP and
EPU
• Develop necessary costing for CC mitigation and
adaptation measures
• Harmonize necessary modelling tools for policy
makers
� �
8
Roadmap on
Reduction of 40%
Carbon Intensity in
Malaysia
2012-
2013
NRE and
UNITEN
Finalize and streamline national mitigation actions in
relation to PM’s pledge in Copenhagen of 40% carbon
intensity reduction � �
9
Development of
National Carbon
Disclosure Programme
(NCDP) Framework
Study
2012 UNDP and
NRE
• Formulate necessary framework for voluntary
emission reduction programme in Malaysia
• Invite private sectors to support national CC
initiatives
� �
10
Building Sector Energy
Efficiency Project
(BSEEP)
2010
–
2015
UNDP, GEF
and PWD
• Focus on EE for new and existing buildings
• Develop rating tools and standards
• Build capacity of public and private developers
on building EE design
�
11
Industrial Energy
Efficiency for
Manufacturing Sector
(IEEMS)
2012 -
2017
UNIDO, GEF
and SMIDEC
• Promote the use of ISO50000 Energy
Management System
• Build capacity of SME in managing energy usage
• Develop guidelines and standards for industrial
equipment
�
12
Green Township (and
Low Carbon Cities
Framework (LCCF))
2010
–
2015
MEGTW • Develop voluntary guidelines for cities in
reducing GHG emission
• Focus on passive and active measures including
� �
40
No Project Name Period Implemented
by Activities
Related to SE4ALL
Objectives
Universal
Access EE RE Remarks
green initiatives such as 3R and composting
13 Green Building Index
(GBI)
Since
2007
Professionals
(led by PAM)
Certification of buildings and township according to
industry-certified GBI rating tools � �
14 Green PASS for
buildings
CIDB and JKR Certification framework of Malaysia’s buildings and
township according to UNEP’s Carbon Common Metric
� �
15 Low Carbon Society
(LCS)
JICA, EPU,
UTM and
Iskandar
Development
Region
• Develop pilot research projects on low carbon
society for Iskandar region
• Utilize scenario planning and modelling
approach to low carbon cities
• Build capacity of policy makers in prioritizing EE
and RE measures
� �
Completed Projects (from year 2000 onwards)
16
Malaysian Industrial
Energy Efficiency
Improvement project
(MIEEIP)
2000 -
2007
UNDP, GEF
and MEGTW
• Build capacities of public and private sectors
(industrial sectors) in understanding EE
• Develop necessary policies and rating tools on
EE
• Demonstrate the techno-economic benefits of
EE in the industrial sector
• Create awareness on the use of efficient
energy in the industrial sectors
�
Project has
completed. National
EE Master plan is
currently in the final
stage for approval.
17
Biomass power
generation and co-
generation for utilizing
waste from Palm Oil
Mills (BIOGEN)
2003-
2008
UNDP, GEF
and MEGTW • Demonstrate the feasibility of utilizing
biomass and biogas from Palm oil Mills for
energy generation
• Formulate necessary policies of grid-
connected energy generation
• Create awareness on the use of biomass and
biogas in the palm oil industry
�
Project has
completed. More
than 20 CDM
methane avoidance
projects have been
approved by
UNFCCC. PEMANDU
now targets more
than 250 mills for
41
No Project Name Period Implemented
by Activities
Related to SE4ALL
Objectives
Universal
Access EE RE Remarks
18electricity
generation from
methane gas.
18
Building Integrated
Photovoltaic project
(BIPV)
2005-
2011
UNDP, GEF
and MEGTW
• Develop framework on the use of grid-
connected solar PV for power generation
• Initiate the regulatoty framework for the
establishment of the Feed-in-Tariff mechanism
for RE
• Create sustainable financing for RE generation
• Encourage FDI for solar manufacturing plants in
Malaysia
� � �
Project has
completed. RE Act
has passed and FiT
has started
implementation.
19
DANIDA Energy
Efficiency / Demand-
Side Management
Programme
2003-
2006
DANIDA,
Energy
Commission
• Develop framework on EE and demand-side
management for industrial products and building
sectors
• Build capacity of public office in formulating and
regulating necessary policies on EE
�
Project has
completed. EC has
setup EE unit.
Electrical Energy
Management Act has
started operation.
20
DANIDA programme
on development of
Solid Waste
Management
framework in
Malaysia
DANIDA,
MHLG
• Develop framework and policies on solid waste
management (SWM) in Malaysia
• Build capacity of public office and private
sectors in dealing with SWM issues
• Communicate with state actors on managing
domestic waste
�
Project has
completed. SWM Act
has passed the
Parliament in 2007
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