Malaysia, with population of about 28 million, is one of the fastest-growing economies in Asia. Although blessed with petroleum resources, this strategically-important Southeast Asian nation is relatively a small producer with reserves of 5.5 billion barrels of oil and 88 trillion cubic feet of natural gas.
Malaysia has significant natural gas exploration and development in the Malaysia-Thailand Joint Development Area, located in the lower part of the Gulf of Thailand, which is highlighted by almost three-fourth share of natural gas in the energy mix in 2009.
During the last decade, Malaysia has seen almost 20 percent increase in energy generating capacity from 13,000MW in the year 2000 to 15,500MW in 2009. The maximum demand for electricity last year was 14,000MW in Peninsular Malaysia, 700MW in Sabah and 900MW in Sarawak. Electricity generation in Malaysia is projected to grow further at an average annual rate of 4.7 percent. Most of power stations in Malaysia are based on fossil fuels as the energy mix is heavily dominated by natural gas and coal.
Thermal power plants contribute 86 percent while hydropower plants account for 13 percent to the electricity generation capacity. Tenaga Nasional Berhad (TNB) is the largest electricity utility company in the country with generation capacity of 10,481MW. Other major utility companies are Sarawak Electricity Supply Company (SESCO) and Sabah Electricity Limited (SESB).
Malaysia is well endowed with abundant renewable sources of energy, especially biomass and solar. Under the Eighth Malaysian Plan, renewable energy was added in the energy mix to unveil a Five-Fuel Strategy to achieve 5 percent contribution by 2005. An important step in this regard was the launching of the Small Renewable Energy Power Programme (SREP) in 2001.
Under the Ninth Malaysian Plan (2006-2010), strategies for developing energy security were highlighted along with a number of broad strategies including rural electrification, fuel diversification, energy efficiency, renewable energy and energy business development. The Plan targets 350MW of grid-connected renewable electricity by 2010. A number of incentives were set up to encourage this, including a Renewable Energy Purchase agreement whereby Independent Power Producers less than 10MW can negotiate directly with utilities to sell their electricity.
However, only 15 per cent of the target has been achieved until December 2009. This slow progress is due to a number of hurdles faced in the development of the renewable energy industry, among them, the high cost involved and the lower tariffs offered. The Ninth Malaysian Plan (2006-2010) targets 350 MW of grid-connected renewable electricity by with fuel mix of 40 percent gas, 40 percent coal, 10 percent hydropower and 10 percent renewable energy.
Among the various sources of renewable energy, biomass seems to be the most promising option for Malaysia. In line with the promotion of using biomass energy, a Biomass Power Generation & Cogeneration Project (BioGen) was commissioned in October 2002. Photovoltaic (PV) systems are also another attractive renewable energy source for Malaysia as climatic conditions are favorable for the development of solar energy.
However there is not much development in the domestic PV market despite the fact that Malaysia is currently the world’s fifth largest producer of PV modules. To encourage the development of grid-connected PV systems, the Government is providing financial incentives through the Malaysia Building Integrated Photovoltaic (MBIPV) Project.
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