Renewable Energy in Malaysia

Malaysia, with population of about 28 million, is one of the fastest-growing economies in Asia. 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.  Under the 8th Malaysia Plan (2001–2005), the government of Malaysia changed the Four-Fuel Policy (based on oil, gas, coal and hydropower) to the Five-Fuel Policy with the addition of renewable energy as the fifth source of fuel. Malaysia is well endowed with abundant non-renewable and renewable sources of energy, especially biomass and solar.

Renewable Energy Program

An important step 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.

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 third 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.

Small Renewable Energy Programme (SREP)

SREP was launched in the 8th Malaysia Plan to develop small grid-connected, renewable energy power plants of less than 10MW generation capacity. Under the Programme, the utilization of all types of alternative energy, including biomass, biogas, municipal waste, solar, mini-hydro and wind, are allowed. Until June 2010, 43 projects with target capacity of 286.15MW have been approved, with the majority coming from biomass and mini hydro. However, only ten 10 projects are currently in operation with a total capacity of 56.7MW.

BioGen Program

In 2002, the Government of Malaysia initiated the Biomass Power Generation and Cogeneration program in the palm oil industry, with support from UNDP/GEF and private sector. The project’s primary objective is to develop and implement activities that will build stakeholders’ capacity and facilitate the greater adoption of renewable energy system. The most significant BioGen projects include the 14MW power plant in Tawau, Sabah which uses oil palm residues that successfully mitigate 40,000–50,000 tons of every year. Under this project, more than 700MW off-grid electricity has been produced by private palm oil millers till 2009.

Malaysia Building Integrated Photovoltaic Project (MPIBV)

Since 2005, the Malaysian Government, in collaboration with UNDP/GEF and private sector, has been promoting grid-connected PV applications through the MBIPV Project. The main idea of the MBIPV project is to incorporate PV grid-connected systems aesthetically into the building architecture. The MBIPV programme has been successful in achieving a tremendous increase in solar energy utilization in the country through its Suria1000 programme. Until December 2009, the cumulative grid-connected PV capacity in Malaysia was recorded at 1,416kW, which corresponds to an increase of 203 percent compared to 468kW in 2005. At the current pace of achievement, it is possible to attain more than the project’s target of installed capacity of 330 percent with a 20 percent cost reduction by the end of 2010.

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