ECO314S Energy and the Environment
Title: Reducing Carbon Emissions in Southeast Asia: Potential Pathway of Decarbonizing
Electricity and Transportation Sectors in Malaysia
Name: Wei Cheng Yeoh
Student Number: 1004813785
Date Submitted: June 6, 2021
Word Count: 3168 (excluding cover and bibliography)
ABSTRACT:
While the impact of climate change getting more serious across the world, deep
decarbonization is now often discussed in developed countries but not in Southeast Asia. Due to
their strategic location on equator, this region has high solar radiation and rainfall that can
potentially help to reduce their heavy reliance on fossil fuels in energy supply. This objective of
this paper is to analyze pathway of decarbonizing electricity and transportation sectors in
Southeast Asia by using Malaysia as a benchmark. Rooftop solar is shown to be the most
efficient way of generating electricity for residential and commercial uses, while large-scale
solar projects can be used to phase out thermal plants. Meanwhile, small-scale hydropower and
off-grid solar system is the best candidate for improving electricity supply in rural areas where
difficult to be reached by power grid. Agricultural residues produced in Southeast Asia can be
utilized as transition fuel in thermal plants through bioenergy technologies. With the
characteristic of these alternative sources, a decentralized energy system is achievable through
cooperation between government and private sectors. While nuclear and wind power might play
important role for developed countries, they are unlikely to lead energy transition in Southeast
Asia.
2
1. Introduction
With most Southeast Asia countries being developing countries, the energy demand in
this region has increased by 80% in the last two decades.1 Their economic development has been
mostly rely on fossil fuels, contributing significant portion of greenhouse gas emissions in the
world, although this region is identified to be facing very high climate risk.2 Meanwhile, this
region is possessing huge potential for renewable energy as the solar radiation level is very high
and the intermittency problem is less significant due to its strategic location on equator.
Even though the countries are sharing similar weather conditions, their economic and
cultural developments and also political standings may vary. To simplify the analysis, Malaysia
will be used as a benchmark with following reasons: (1) Malaysia is a member in OPEC plus and
the largest oil exporter in Southeast Asia,3 (2) approximately 6% of its energy is from renewable
sources,4 and (3) about 20 to 30% of the government’s revenue comes from a national oil and gas
company.5 Strong reliance of Malaysia on fossil fuels will be a good example to illustrate the
potential pathway of decarbonizing in Southeast Asia.
The objective of this paper is to analyze the potential pathway of deep decarbonization in
Malaysia, primarily in electricity and transportation sectors. Several assumptions in the analysis
will be used in this paper: (1) growth in electricity demand in residential, commercial and
industrial sectors will follow the past trend, (2) all motor vehicles powered by gasoline or diesel
1
Alexander Ayertey Odonkor, “Energy Consumption and CO2 Emission in Southeast Asia,” CGTN, October 9,
2020, https://news.cgtn.com/news/2020-10-09/Energy-consumption-and-CO2-emission-in-Southeast-AsiaUqld84T1Nm/index.html.
2
Jonathan Woetzel et al., “Climate Risk and Response in Asia,” McKinsey Global Institute, November 24, 2020,
https://www.mckinsey.com/business-functions/sustainability/our-insights/climate-risk-and-response-in-asia#.
3
“Malaysia’s Oil & Gas Landscape,” PETRONAS, accessed on May 30, 2021,
https://www.petronas.com/mpm/malaysia-oil-gas-landscape/about-oil-gas-landscape.
4
“Annual Report 2018,” Sustainable Energy Development Authority (SEDA) Malaysia, accessed on May 30, 2021,
http://www.seda.gov.my/download/seda-annual-report/.
5
“Fiscal Outlook and Federal Government Revenue Estimates 2020,” Ministry of Finance, accessed on May 30,
2021, https://www.mof.gov.my/arkib/revenue/r_main.html.
3
will eventually be switched into electrical vehicles (EVs), and (3) the source of electricity is
indifferent for the users, except for nuclear due to its safety concern among public.
2. Literature Review
In order to meet the Malaysia’s goal of reaching 20% electricity generation from
renewable energy by 2025, W. Abdullah et al. have identified solar to be the main contributor
among all alternatives, while wind, hydro, biogas, and bioenergy can help to accelerate the
transition and also improve energy security.6 Geothermal and tidal are not being considered due
to their very limited power density compared to other countries, while nuclear is not being taken
into the plan due to consistent public rejection.
In a study conducted by S. Mekhilef et al., about 20% of the residential buildings and
10% of commercial businesses were not suitable for solar panels due to architectural constraints
and shading, and the potential of applications depends on type of business.7 In addition, M. Vaka
et al. pointed out that the current implementation of solar panels is slow mainly due to lack of
knowledge and education on the technology, even though the long-term cost of installing solar
panels have shown to be cheaper, as well as low awareness of the leasing and loan programs
which aim to mitigate the high capital cost of installing solar panels.8
6
Abdullah, Wan Syakirah Wan, Miszaina Osman, Mohd Zainal Abidin Ab Kadir, and Renuga Verayiah. “The
Potential and Status of Renewable Energy Development in Malaysia.” Energies (Basel) 12, no. 12 (2019): 2437–.
https://doi.org/10.3390/en12122437.
7
Mekhilef, S, A Safari, W.E.S Mustaffa, R Saidur, R Omar, and M.A.A Younis. “Solar Energy in Malaysia: Current
State and Prospects.” Renewable & Sustainable Energy Reviews 16, no. 1 (2012): 386–96.
https://doi.org/10.1016/j.rser.2011.08.003.
8
Vaka, Mahesh, Rashmi Walvekar, Abdul Khaliq Rasheed, and Mohammad Khalid. “A Review on Malaysia’s
Solar Energy Pathway Towards Carbon-Neutral Malaysia Beyond Covid’19 Pandemic.” Journal of Cleaner
Production 273 (2020): 122834–122834. https://doi.org/10.1016/j.jclepro.2020.122834.
4
3. Analysis
Analysis will be divided into four subsections. In section 3.1, geographical profile and
current energy situation will be discussed. In section 3.2, the electricity generation capacity
required will be estimated, after accounting for increased in demand due to economic
developments and proliferation of EVs. In section 3.3, potential sources of alternative energy and
their optimal geographical locations will be analyzed. In section 3.4, importance of market forces
and government policies in energy transition will be discussed.
3.1 Geographical Profile and Current Energy Situation
Malaysia consists of two parts, Peninsular Malaysia (West Malaysia) which is connecting
to Thailand and Singapore, and East Malaysia which is on the island of Borneo.9 Malaysia has an
equatorial climate with average temperature about 27°C and patterned around the Northeast and
Southeast monsoons. The monthly solar radiation is around 400 to 600 MJ/m2 and the annual
Figure 1: Malaysia’s Map with Population Density.10
9
Thomas R. Leinbach, “Malaysia,” Britannica, Last modified June 3, 2021,
https://www.britannica.com/place/Malaysia.
10
“Gridded Population of the World (GPW), v4,” SECAC, accessed on June 5, 2021,
https://sedac.ciesin.columbia.edu/data/set/gpw-v4-population-density-rev11.
5
rainfall is about 2500 mm and 5080 mm in Peninsular Malaysia and East Malaysia, respectively,
providing huge potential for solar and hydropower.11 The average wind speed is considered to be
relatively weak with about 9 to 11 m/s at high altitude areas.12
During the Northeast monsoon period (November to March), Malaysia will receive
higher solar radiation while southern part of Peninsular Malaysia will experience stronger
wind.13 A heavy rainfall is usually experienced during this period, with east coast regions being
most effected by the monsoon.14 In contrast to Southwest monsoon period (May to September),
lower solar radiation is expected, and most regions will experience lower rainfall.
In 2018, about 150 TWh of electricity was generated, with 83% from fossil fuels, 16%
from hydro and the remaining 1% from solar, wind and biomass. The source of power generation
in Malaysia is deeply influenced by the geographical profile. In Peninsular Malaysia where
around 79% of the population is located, consumed about 120 TWh of electricity, mainly relying
on natural gas (48%) and coal (38%). In East Malaysia, where most of the natural gas reserves is
found, is mainly powered by hydro (47%), natural gas (29%) and oil (12%).15 East Malaysia has
relatively lower population density and less industrialized due to its unfavorable geographical
features, with 46% of people living in rural areas.16
11
Hossain, Monowar, A.S.N Huda, Saad Mekhilef, Mehdi Seyedmahmoudian, Ben Horan, Alex Stojcevski, and
Mahrous Ahmed. “A State-of-the-Art Review of Hydropower in Malaysia as Renewable Energy: Current Status and
Future Prospects.” Energy Strategy Reviews 22 (2018): 426–37. https://doi.org/10.1016/j.esr.2018.11.001.
12
Abdullah, "The Potential and Status of Renewable Energy Development in Malaysia," 2437.
13
Mekhilef, “Solar Energy in Malaysia: Current State and Prospects,” 386–96.
14
Thomas, “Malaysia.”
15
“Malaysia Energy Statistics Handbook 2019,” Suruhanjaya Tenaga, accessed on June 3, 2021,
https://meih.st.gov.my/documents/10620/bcce78a2-5d54-49ae-b0dc-549dcacf93ae.
16
“Profile of East Malaysia,” Malaysian Aviation Commission, accessed on June 3, 2021,
https://www.mavcom.my/en/industry/public-service-obligations/profile-of-east-malaysia/.
6
Figure 2: Generation Mix by Fuel Types, 2018.17
3.2 Forecasting Electricity Demand
On the demand side, about 50% of power is consumed by industrial sector while
commercial and residential account for 29% and 21%, respectively.18 The installed generation
capacity in 2018 was about 34 GW.19 The average increase in electricity generation for the last
decade is about 4% annually20. It is important to note Malaysia is considered to be a developing
country and the growth rate should gradually decrease as the country approaches state of
developed country. As a result, around 2 GW expansion of generation capacity is required
annually to meet the increasing electricity demand to accommodate economic development.
Even though EVs are not yet commonly seen in Southeast Asia, it is important to prepare
for expanding the electricity generation capacity as electrification of transportation sector is
crucial to counter climate change. Almost all vehicles in Malaysia currently operate by using
17
“National Energy Balance 2018,” Suruhanjaya Tenaga, accessed on June 3, 2021,
https://meih.st.gov.my/documents/10620/f2f4c39b-4748-4c5d-b90a-fc36ba880264.
18
“National Energy Balance 2018,” Suruhanjaya Tenaga.
19
“Malaysia Energy Statistics Handbook 2019,” Suruhanjaya Tenaga.
20
“Malaysia Energy Statistics Handbook 2019,” Suruhanjaya Tenaga.
7
Figure 3: Final Electricity Consumption, by sector.21
internal combustion engine (ICE), and about 180 million barrels of gasoline and diesel are
consumed in transportation sector per year.22 The efficiency of energy conversion from chemical
energy in fuel into motions for electric motors and ICE are approximately 76% and 16%,
respectively.23 For conversion, one litre of gasoline contains energy equivalent to 8.9kWh of
electricity.24 To compute an estimation of electricity needed to electrify all motor vehicles, the
following formula can be used:
𝑄! [𝐺𝑊ℎ] = 𝑄" [𝑙𝑖𝑡𝑟𝑒𝑠] × 8.96 4
21
𝑘𝑊ℎ
𝜂#$!
𝐺𝑊ℎ
6×
× 10./ 4
6
𝑙𝑖𝑡𝑟𝑒
𝜂%&%'()*' ,-(-)
𝑘𝑊ℎ
“Final Electricity Consumption,” Suruhanjaya Tenaga, accessed on June 4, 2021, https://meih.st.gov.my/statistics.
Abdul Karim, “17th APEC Workshop on Energy Statistics: Oil & Gas Statistics in Malaysia,” accessed on June 4,
2021, https://www.egeda.ewg.apec.org/egeda/meeting/17WSpresentations/D2-5.pdf.
23
“Buying an Electric Vehicle,” Government of Canada, Last modified April 25, 2019,
https://www.nrcan.gc.ca/energy-efficiency/transportation-alternative-fuels/personal-vehicles/choosing-rightvehicle/buying-electric-vehicle/21034.
24
“Understanding the Tables,” Government of Canada, Last modified March 24, 2021,
https://www.nrcan.gc.ca/energy-efficiency/transportation-alternative-fuels/personal-vehicles/choosing-rightvehicle/buying-electric-vehicle/understanding-the-tables/21383.
22
8
where QE is the amount of electricity needed in GWh, QF is the amount of gasoline and diesel in
litres and η is the efficiency of engines. The result indicates that 340 GWh of electricity per year
will be needed to meet the demand of EVs.
Since EV has huge potential to be pre-programmed for charging at desired time, we can
assume the power demand for charging will be equally spread out throughout the day.25
Therefore, about 15 GW of electricity generation capacity will be needed to deeply electrify
transportation sector. No growth in the number of vehicles is assumed in this paper because
Malaysia has one of the highest motor vehicle ownership per capita in Asia, at a level
comparable with developed countries such as Japan and Korea.26 Assuming that about 10% of
vehicles will be replaced by EVs, about 1.5 GW increase in generation capacity will be needed.
Overall, about 30 GW of the current electricity generation capacity will need to be
switched to carbon-free sources and additional 3.5 GW is required to be installed annually for
encouraging and accommodating the use of EVs.
3.3 Alternative Energy Sources and Their Optimal Locations
Four alternative energy sources including solar, hydro, wind and bioenergy will be
considered in this subsection. Current status, technology used, future potential and optimal
locations will be discussed respectively. Affordability and feasibility of each alternative will be
addressed from technological and economical perspectives.
25
Usher, Bruce. Renewable Energy: a Primer for the Twenty-First Century. (New York: Columbia University Press,
2019), 116-9.
26
“Motor Vehicle Ownership, per 1000 inhabitants, 2014,” Our World in Data, accessed on June 4, 2021,
https://ourworldindata.org/grapher/motor-vehicle-ownership-per-1000-inhabitants.
9
3.3.1 Solar
The daily average sunshine solar radiation is around 4.5 kWh/m2, with ample sunshine
duration of about 6 hours per day.27 Notably, Malaysia is the world’s third largest manufacturer
of photovoltaics (PV) equipment, with many international companies establishing their factories
here.28 The current installed capacity is about 700 MW in Peninsular Malaysia and 110 MW in
northern part of East Malaysia.29 The common type of photovoltaic (PV) solar panels used are
monocrystalline solar panels, polycrystalline solar panels and thin-film solar panels made of
cadmium telluride (CdTe).30 The conversion efficiency of these PV panels is about 20% with
lifetime of 25 years on average.31
Two major programs were introduced by the government to incentivize development of
solar systems. Large Scale Solar (LSS) is used to encourage construction of utility-scale (from 1
to 50 MW) through competitive bidding process.32 About 2.4 GW of projects in total had been
tendered since 2016.33 Net Energy Metering (NEM) was introduced in 2016 to encourage
installation of rooftop solar panels, by allowing excess energy generated from PV panels to be
exported back to the grid on a “one-on-one” offset basis, to offset the electricity consumption.34
27
Mekhilef et al., “Solar Energy in Malaysia: Current State and Prospects.” 386–96.
Vaka et al., “A Review on Malaysia’s Solar Energy Pathway Towards Carbon-Neutral Malaysia Beyond
Covid’19 Pandemic.” 122834–122834.
29
“National Energy Balance 2018,” Suruhanjaya Tenaga.
30
Bmadminwp, “Different Types of Solar Panels in Malaysia,” PITECH, June 25, 2020,
https://pitech.com.my/different-types-of-solar-panels-in-malaysia/.
31
Khan, Rehan, and YunIi Go. “Assessment of Malaysia’s Large‐Scale Solar Projects: Power System Analysis for
Solar PV Grid Integration.” Global Challenges 4, no. 2 (2020): 1900060–n/a.
https://doi.org/10.1002/gch2.201900060.
32
“Malaysia Solar Energy Profile,” Solar Magazine, accessed on June 24, 2019, https://solarmagazine.com/solarprofiles/malaysia/.
33
Veselina Petrova, “Malaysia Opens 1-GW Solar Tender Under COVID-19 Recovery Plan,” Renewables Now,
accessed on June 2, 2020, https://renewablesnow.com/news/malaysia-opens-1-gw-solar-tender-under-covid-19recovery-plan-701119/.
34
“Net Energy Metering (NEM) 3.0,” Sustainable Energy Development Authority (SEDA), accessed on June 5,
2021, http://www.seda.gov.my/reportal/nem/.
28
10
Rooftop PV panels can be widely implemented on residential as well as commercial and
industrial (C&I) buildings while utility-scale solar systems can be built to supply electricity
through power system to places where generation from rooftop is not sufficient. By using 20%
conversion efficiency and 25% capacity factor, about 20 PV panels installed for residential
building can supply about 23 kWh of electricity per day, after accounting for 20% loss for
conversion from direct current to alternating current.35 It is comparable with average electricity
consumption per household of 26 kWh/day.36 C&I buildings with a larger rooftop size can even
obtain from 250 to 2000 kWh. For rural areas, off-grid PV panels can be installed, which is
system that only aims to provide electricity to the houses without connecting to power grid.
According to the former Energy, Science, Technology, Environment and Climate Change
Minister Yeo Bee Yin, about 34.2 GW of electricity generation capacity would be added if solar
PV systems are installed at rooftops of the 4.12 million buildings with good solar energy
potential in Peninsular Malaysia.37 This amount is already sufficient to replace all the thermal
plants that are currently operating. However, there are some barriers that must be overcame in
order to heavily rely on solar power for electricity generation. Intermittency will be the biggest
challenge as matching the electricity supply and demand at all times is critical to ensure stability
of power grid. A recent study shows that it is more financially profitable and technically feasible
to incorporate a small energy storage to utility-scale PV projects, compared to building only PV
systems or an independent large energy storage system.38 The mature technologies that can be
35
“Solar Articles,” Solar Land Lease, accessed on June 5, 2021, https://www.solarlandlease.com/size-of-a-solarfarm.
36
Maytham S. Ahmed, Azah Mohamed, Raad Z. Homod, Hussain Shareef, And Khairuddin Khalid. “Awareness On
Energy Management in Residential Buildings: A Case Study in Kajang and Putrajaya.” Journal of Engineering
Science & Technology 12, no. 5 (2017): 1280–94.
37
“Malaysia Solar Energy Profile,” Solar Magazine.
38
Mahmoud Laajimi, and Yun Ii Go. “Energy Storage System Design for Large-Scale Solar PV in Malaysia:
Techno-Economic Analysis.” Renewables: Wind, Water, and Solar 8, no. 1 (2021): 1–23.
https://doi.org/10.1186/s40807-020-00064-5.
11
utilized are flow batteries and lithium-ion batteries. In addition, relatively small fluctuation in
both solar radiation and sunshine duration throughout the year reduces the challenge as
compared to most of the developed countries at higher latitude.
To illustrate how solar systems could play an important role in energy transition, we
assume rooftop solar panels generate 70%, 50% and 30% of electricity for residential,
commercial and industrial sectors, respectively. In total, about 67 TWh/year of electricity will be
generated, which is equivalent to about 30 GW of capacity (with 25% capacity factor). A utilityscale solar system has capacity of 30 MW on average, and the optimal locations will be at
outskirts of towns in Peninsular Malaysia and northern part of East Malaysia.
Figure 3: Annual average solar radiation (MJ/m2/day).39
Overall, solar is expected to account more than half, if not nearly all of the electricity
generation in the future, but some alternative sources are still required to address the electricity
security and intermittency issues. The major challenges also include very high temperature
requirement for industrial processes is not economically achievable.
39
Mekhilef, “Solar Energy in Malaysia: Current State and Prospects,” 386–96.
12
3.3.2 Hydro
As of December 31, 2018, the install capacity of hydropower is about 2.6 GW in
Peninsular Malaysia and 3.5 GW in East Malaysia. While hydropower is the largest contributors
in electricity from renewable sources, only less than 20% of technically feasible generation
potential have been utilized. In 2009, the government planned to build 12 hydroelectric stations
across East Malaysia with 7 GW capacity, but the project received strong rejection from the
public and environmentalists due to their concerns for indigenous people and potential natural
disruption.40
Figure 4: Installed major hydropower stations in Malaysia.
With benefits of major hydropower projects being disputable, focus has been shifted to
small-scale hydropower projects where capacity under 30 MW is categorized as small hydro and
range from 5 kW to 500 kW is referred as micro hydro.41 These projects utilize abundant rivers
flowing from highlands and run the water though turbine before discharging it back into the river
downstream. The construction is relatively simple and will not raise any environmental concern
40
Kara Moses, “Power, Profit, and Pollution: Dams and the Uncertain Future of Sarawak,” Mongabay, September 3,
2009, https://news.mongabay.com/2009/09/power-profit-and-pollution-dams-and-the-uncertain-future-of-sarawak/.
41
Hossain et al. “A State-of-the-Art Review of Hydropower in Malaysia as Renewable Energy.” 426–37.
13
while providing reliable electricity supply to the rural areas where indigenous people live. Smallscale hydropower can potentially provide about 500 MW of generation capacity in total.42
Small-scale hydropower is currently under Feed-in Tarff (FiT) program which allows
private companies to sell electricity to the national utility companies with a guaranteed rate.43
The key challenge of small and micro hydro is lack of expertise and technical skills in dealing
with variability of water flows due to monsoon seasons. Also, financial institutions show little
support as they are unfamiliar with assessing the risk of these projects.44
3.3.3 Wind
The average wind speed in Malaysia is between 1.5 and 4.5 m/s, which is feasible to
power a wind turbine, but not strong enough to provide attractive generation capacity with its
very high initial cost.45 Also, FiT program does not include wind power and it is not being taken
into renewable energy planning by the government. Therefore, wind power is unlikely to play an
important role in energy transition.
3.3.4 Bioenergy
As the second largest producer of palm oil, Malaysia has great potential in utilizing its
agricultural residues as an alternative fuel to replace coal and natural gas in generating
electricity. Besides palm oil, paddy and livestock are also suitable feedstocks.46 The feedstock
can be pre-processed into biomass pellets, biomethane or BioCNG, which can then be used for
42
“Exploring Malaysia’s Small Hydro Potential,” Hydro Review, January 7, 2016,
https://www.hydroreview.com/business-finance/exploring-malaysia-s-small-hydro-potential/#gref.
43
Hossain et al. “A State-of-the-Art Review of Hydropower in Malaysia as Renewable Energy.” 426–37.
44
“Exploring Malaysia’s Small Hydro Potential,” Hydro Review.
45
Abdullah, "The Potential and Status of Renewable Energy Development in Malaysia," 2437.
46
Abdullah, "The Potential and Status of Renewable Energy Development in Malaysia," 2437.
14
co-firing at coal plants or stored for subsequent use. Crude pam oil is also a great source for
producing biodiesel to replace conventional fuels in transportation sector.
Figure 5: Estimated Availability of Feedstock from 2020 to 2050.47
Biogas can be burnt in boiler to create steam in driving turbines, and even utilize the
waste heat through cogeneration power plants to produce both electricity and heat. Biomass can
be used in direct co-firing with coal in producing electricity with lower carbon emissions.48 The
efficiency of energy conversion is about 50% and minimal modification on current thermal
plants is required, making it suitable for deployment in the short run for energy transition.49
Estimates show that Malaysia is able to generate more than 2400 MW from biomass and
410 MW from biogas.50 Substituting coal and natural gas with biomass and biogas in thermal
plants will not drastically reduce carbon emissions, but it is considered to be carbon-neutral
47
Mohd Idris, Muhammad Nurariffudin, Haslenda Hashim, Sylvain Leduc, Ping Yowargana, Florian Kraxner, and
Kok Sin Woon. “Deploying Bioenergy for Decarbonizing Malaysian Energy Sectors and Alleviating Renewable
Energy Poverty.” Energy (Oxford), 2021, 120967. https://doi.org/10.1016/j.energy.2021.120967.
48
Abdullah, "The Potential and Status of Renewable Energy Development in Malaysia," 2437.
49
Mohd Idris et al., “Deploying Bioenergy for Decarbonizing Malaysian Energy Sectors and Alleviating Renewable
Energy Poverty.” 120967.
50
Ozturk, Munir, Naheed Saba, Volkan Altay, Rizwan Iqbal, Khalid Rehman Hakeem, Mohammad Jawaid, and
Faridah Hanum Ibrahim, “Biomass and Bioenergy: An Overview of the Development Potential in Turkey and
Malaysia,” Renewable & Sustainable Energy Reviews 79 (2017): 1285–1302.
https://doi.org/10.1016/j.rser.2017.05.111.
15
energy source because of photosynthesis process while the plants are growing.51 It is more likely
to be acting as a transition fuel to lower carbon emissions, and also improving energy security by
reducing the amount of coal imported.52 Also, this bioenergy can be used for industrial processes
that require very high temperature.
The optimal location for harnessing bioenergy will be in central Peninsular Malaysia and
northern East Malaysia, where most palm oil are being produced, to minimize the transportation
needed. The cost of processing and transporting biomass and biogas to centralized thermal plants
does not show to have economic benefits.53 Currently, most of the biogas and biomass projects
are in small-scale and mainly incentivized by FiT program.54
Figure 6: Palm Oil Production in Malaysia.55
51
“Biomass Explained,” U.S. Energy Information Administration (EIA), Last modified August 28, 2020,
https://www.eia.gov/energyexplained/biomass/.
52
Ozturk et al., “Biomass and Bioenergy,” 1285–1302.
53
Ozturk et al., “Biomass and Bioenergy,” 1285–1302.
54
Ozturk et al., “Biomass and Bioenergy,” 1285–1302.
55
“Palm Oil,” United States Department of Agriculture, accessed on June 6, 2021,
https://ipad.fas.usda.gov/cropexplorer/cropview/commodityView.aspx?cropid=4243000.
16
3.4 Market Forces and Government Policies
Power transmission in Malaysia is held monopolies by Tenaga National Berhad (TNB) in
Peninsular Malaysia, Sabah Electricity Sdn. Bhd. (SESB) in northern East Malaysia and Sarawak
Electricity Supply Corporation (SESCO) in southern East Malaysia.56 Most renewable energy
initiatives are performed by Sustainable Energy Development Authority (SEDA), including
NEM and FiT. Large scale projects such as LSS and major hydropower are regulated by Energy
Commission (EC). Both organizations are under administration of Ministry of Energy and
Natural Resources.57
Figure 7: Implementation of Programs to Improve Renewable Energy.58
In order to accelerate the energy transition, Abdullah et al. argued that the government
should revise the rate of FiT program to strongly incentivize private sectors in developing small-
56
Mekhilef, “Solar Energy in Malaysia: Current State and Prospects,” 386–96.
Vaka et al., “A Review on Malaysia’s Solar Energy Pathway Towards Carbon-Neutral Malaysia Beyond
Covid’19 Pandemic.” 122834–122834.
58
Vaka et al., “A Review on Malaysia’s Solar Energy Pathway Towards Carbon-Neutral Malaysia Beyond
Covid’19 Pandemic.” 122834–122834.
57
17
scale projects, especially for bioenergy and hydropower.59 Besides that, SEDA can cooperate
with local property developers to speed up the licensing and installation process of rooftop
panels and reduce the soft cost incurred, especially for residential buildings.60 A recent study
revealed that 69% of residents felt the renewable energy policies run by the government were not
successful, indicating a very low awareness about the current technological state and program
available.61 Mobilizing the resources among private sector and financial institutions with
strategic planning by the government is vital in energy transition.
Most research and development (R&D) funding in alternative energy comes from the
government and performed by higher learning institutions. Mini hydro received the biggest
improvement from recent R&D activities while wind being the smallest.62 The government
should utilize the information from R&D activities to improve confidence of financial
institutions in supporting green projects as the perceived risk is relatively high in Malaysia.
4. Conclusion
With high solar radiation and high rainfall throughout the year, Malaysia has a great
untapped potential with renewable energy as only 6% of its energy supply is from renewable
sources. To achieve 45% reduction in intensity of carbon emission (compared to 2005 levels) by
2030, solar energy is expected to play a major role by harnessing energy via rooftop solar panels
59
Shamsuddin, Abd Halim. “Development of Renewable Energy in Malaysia-Strategic Initiatives for Carbon
Reduction in the Power Generation Sector.” Procedia Engineering 49 (2012): 384–91.
https://doi.org/10.1016/j.proeng.2012.10.150.
60
Usher, Bruce. Renewable Energy: a Primer for the Twenty-First Century. (New York: Columbia
University Press, 2019), 43-54.
61
Kardooni, Roozbeh, Sumiani Binti Yusoff, Fatimah Binti Kari, and Leila Moeenizadeh. “Public Opinion on
Renewable Energy Technologies and Climate Change in Peninsular Malaysia.” Renewable Energy 116 (2018): 659–
68. https://doi.org/10.1016/j.renene.2017.09.073.
62
Mohd Chachuli, Fairuz Suzana, Sohif Mat, Norasikin Ahmad Ludin, and Kamaruzzaman Sopian. “Performance
Evaluation of Renewable Energy R&D Activities in Malaysia.” Renewable Energy 163 (2021): 544–60.
https://doi.org/10.1016/j.renene.2020.08.160.
18
to provide most of the electricity usage in residential and commercial areas, wherever possible.
Utility-scale solar projects must also be developed around outskirt of towns to significantly
reduce the reliance on fossil fuels for powering town areas and ready for the rise of EVs. In rural
areas, a hybrid system combining small-scale hydro and off-grid solar projects should be
implemented to supply reliable electricity for indigenous people.63 Since energy transition a
time-consuming process, the government must strictly regulate the operation of thermal power
plants for long-term planning and encourage substitution of natural gas and coal with biogas and
biomass. Expansion of generation capacity should be prioritized by using renewable energies and
government should lead the focus of business and R&D activities towards high potential
alternative sources.
Figure 8: Plan to Decarbonize Power Sector in Malaysia (not to scale).
63
Khamis, Aziah, Tamer Khatib, Nur Amira Haziqah Mohd Yosliza, and Aimie Nazmin Azmi. “Optimal Selection
of Renewable Energy Installation Site in Remote Areas Using Segmentation and Regional Technique: A Case Study
of Sarawak, Malaysia.” Sustainable Energy Technologies and Assessments 42 (2020).
https://doi.org/10.1016/j.seta.2020.100858.
19
From analysis, about 42 GW of electricity generation capacity can be achieved by current
state of technology, which is sufficient to deeply decarbonize power sector. The major
challenges will be to coordinate planning among various institutions and to develop a reliable
energy storage system that can efficiently match the electricity supply and demand. Since
Southeast Asia countries are sharing similar geographical and climate profile, the key
modification required will be to determine optimal location for each alternative.
Some of the differences in energy transition between developed countries and developing
countries in Southeast Asia can be highlighted in this paper. Decarbonization of power sector in
Southeast Asia will mainly rely on solar while wind and nuclear energy will not be necessary.
High rainfall also allows developing countries to significantly improve electricity supply in rural
areas. Agricultural activities that are playing an important role in economic development of
Southeast Asia countries can also be utilized through bioenergy technology. Therefore, a
decentralized energy system is considered to be more achievable compared to most developed
countries which have to include nuclear as a reliable carbon-free source.
20
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