Transcript Document

POLICY SYNTHESIS PAPER ON
ENERGY SECURITY ON DEMAND SIDE
ENERGY CONSERVATION AND RENEWABLE
ENERGY PROMOTION IN MALAYSIA
by
MURTADZA KASSIN
DIRECTOR, ENERGY COMMISSION
Siam City Hotel
Bangkok, Thailand
7 June 2004
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
NATIONAL ENERGY SITUATIONS
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Energy Demand
• Demand for commercial energy
~ 1980s - 7.5 percent
~ 1990s - 7.7 percent
• GDP growth
~ 1980s - 5.9 percent
~ 1990s - 7.0 percent
• Demand for energy
~ 1980 - 267.3 PJ
~ 2000 - 1,167.1 PJ
~ 2005 - 1,699.8 PJ
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Final Energy Demand by Source, 1990-2005 (ktoe)
Source
1990
1995
2000
2005
Petroleum
Products
9,896
16,142
19,582
27,225.1
Electricity
1,715
3,375
5,263
7,648.2
Natural Gas
1,093
1,935
3,863
4,416.8
Coal & Coke
513
712
991
1,336.0
13,217
22,164
29,669
40,626.2
Total
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NATIONAL SYMPOSIUM ON SCIENCE AND TECHNOLOGY: STRATEGIC RESEARCH
AND INNOVATION TOWARDS ECONOMIC DEVELOPMENT
Primary Energy Supply by Source, 1990-2005 (toe)
Source
1980
1990
2000
2005
8,783
16,159
21,673
28,814.0
3,651
610
1,922
-
4,991
10,974
20,194
22,667.3
1,326
1,612
2,486
3,336.5
915
1,540
1,612
1,950.3
19,666
30,895
47,887
56,768.1
Crude Oil
Petroleum
Products
Natural Gas
Coal & Coke
Renewable Hydro
other
Total
• 2005 ~ 2,374.8 PJ
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
ENERGY SECURITY POLICY
ON DEMAND SIDE
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Energy Conservation Policy
• Malaysian Government conscious efforts towards energy
conservation represent in:
~ The National Depletion Policy, 1980
~ The Four Fuel Strategy, 1981
~ The Five Fuel Strategy, 2001
• The Government began developing EE and RE as a Fifth
Fuel.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
• Focus of EE policy is major consumers of energy i.e. industrial
and commercial sectors.
• Among measures introduced i.e. introduction of EE regulation,
extension of financial and fiscal incentives and demonstration
projects.
• Intensified the implementation of demand side management
which will change the energy usage pattern and appliance
labelling.
• Encourage the establishment of new integrated complexes and
townships.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Energy Efficiency Regulation
• Scheduled to be introduced in 2004.
• Initially will cover activities related to energy management in building.
• EE equipment (rating and labelling schemes) regulation will be incorporated
into the existing Electricity Regulation, 1994.
• Government will cooperate closely with the industry to implement the
programs.
• Industrial EE initiatives implemented:
~ energy audit program
~ energy service companies support program
~ technology demonstration program
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Energy Conservation Measures
2001 Budget
• Companies which incur capital expenditures for conserving energy
for own consumption:
i. Accelerated Capital Allowances on Investments in related equipment to
be written off within a period of three (3) years; and
ii. Import duty and sales tax exemption for equipment used in energy
conservation, which are not produced locally. Equipment purchased
from local manufacturers is given sales tax exemption.
2003 Budget – Incentive (i) be accelerated from three (3) to one (1) year.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
2001 Budget
• Companies providing energy conservation services:
i.
Pioneer status with income tax exemption of 70% on statutory income for a
period of five (5) years, or Investment tax Allowance of 60% on the qualifying
capital expenditures incurred within a period of five (5) years with the allowance
deducted in each year of assessment be set-off against 70% of the statutory
income; and
ii. Import duty and sales tax exemption for equipment used in energy conservation,
which are not produced locally. Equipment purchased from local manufacturers
is given sales tax exemption.
2003 Budget
• The incentive be extended for a period of three (3) years until
31 December 2005.
• The company is required to implement the project within one year from the
date of approval of the incentive.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
• Incentives program is managed by the MIDA in collaboration with:
~ Ministry of Energy, Water and Communications (MEWC)
~ Inland Revenue Board (IRB)
~ Ministry of Finance (MoF)
~ The Royal Custom and Excise Department
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Targets and Outcome
Energy Efficiency Plan, 2003 - 2006
 Overall Objective
To integrate and coordinate the efforts in the process towards
sustainable energy production and consumption patterns to bring down
the elasticity between energy consumption and GDP.
 Purpose
To coordinate the planning and implementation of the EE activities and
projects by the stakeholders.
 Target
To reduce the growth in final demand at an annual saving of 106MWh.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
 Total Socio Economic Savings from EE
• From an investment amounting to RM111 million, savings
is estimated to be around RM247 million over the 2003 –
2006 period.
 Malaysian Industrial Energy Efficiency Improvement
Projects (MIEEIP)
• Undertaken by the Malaysia Energy Centre (PTM).
• Objective – to reduce energy consumption in 8
manufacturing sub-sectors by 10% by 2004.
• Expected saving from RM2.5 billion investment –
RM6 billion over 2000 – 2004.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
• Success of the EE programme – Malaysian Securities Commission
(ASEAN Energy Efficient Building Award 2001)
• Other EE projects:
~ District Cooling Project – Universiti Kebangsaan Malaysia
~ New Administrative Centre – Putrajaya
~ Multimedia Super Corridor – Cyberjaya
~ Kuala Lumpur City Centre – Petronas Twin Towers
~ Kuala Lumpur International Airport (KLIA)
• EE retrofit:
~ Sultan Zanariah Library – Universiti Teknologi Malaysia
~ Energy Management Project – Takeuchi MDF Sdn. Bhd. (Factory
producing medium density fibre board)
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Malaysian Energy Management Programme (MEMP)
• Developed by the Government to demonstrate the commercial viability
of energy efficient and energy management.
• Will also implement Energy Management in government buildings and
EE Procurement of Office Equipment and Appliances.
Ministry of Energy, Water and Communications
• Built an energy efficient building or ‘Low Energy Office’ (LEO) in Putrajaya.
Public Work Department
• Adopted EE features in their new design guidelines i.e:
~ architectural treatments to reduced solar heat gain
~ improve ventilation systems
~ ensure selection of high efficiency equipment in new government
buildings
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Energy Commission
• Capacity building program under EE/DSM project
• Enable to prepare:
- EE plans and standards;
- draft relevant regulations and guidelines; and
- implement specific EE programmes in all sectors of economy.
• Involvement of stakeholders – advisory boards and working groups
• Current initiatives:
- formulate EE standards and labelling for end-use products.
- established 8 work groups and task force
- priority areas – high energy efficient motors and refrigerators.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Problems and Obstacles
Area
Remaining Problems and Obstacles
Energy Planning/Policy and
Regulation
Lack of policy and legal framework. Yet to translate the benefits
of EE for industrial and commercial sectors into reality.
Financing
Difficult to obtain financial support for EE projects than for
traditional business ventures due to unknown successful EE
projects. Financial institution yet to see the business potential
and economic viability of the project.
Technical
Lack of understanding and skills in implementing EE programmes
at all level. No information on current and future trends in energy
technology especially related to EE.
Rural Areas
Not yet widen the EE promotion to these areas, particularly in the
agriculture sector.
Awareness and encouraging
end-user demand
To widen the participation of private sectors in adopting EE
technologies and implementing EE programmes. End-users are
yet to appreciate the economic viability of EE programmes.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
RENEWABLE ENERGY PROMOTION POLICY
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Renewable Energy Policy
• Initiatives as stated in OPP3 and 8MP.
• Biomass (palm oil and wood residues), rice husks, municipal
wastes and solar energy account for more than 90% of RE
potential.
• RM10 billion p.a. in equivalent energy content – immediately
available from biomass (palm oil and wood residues).
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CONFERENCE ON ENERGY EFFICIENCY AND RENEWABLE ENERGY HELD IN
CONJUNCTION WITH ELENEX MALAYSIA 2003 EXHIBITION
Small Renewable Energy Programme (SREP)
• Launched 11 May 2001.
• Power generation plants – 10 MW and below which utilize RE.
• Can sell electricity to TNB and SESB via distribution grid.
• The implementation of SREP is coordinated by SCORE at MEWC.
• A secretariat at ST – a one stop centre facilitating new investment
in RE.
• SCORE & ST have jointly published a guidelines on the
development of grid-connected small RE plant.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Renewable Energy Measures
2001 Budget
• Companies generating energy using biomass are given the following
tax incentives:
i. Pioneer status with tax exemption of 70% of statutory income for a
period of 5 years or Investment Tax Allowance of 60% on the qualifying
capital expenditure incurred within a period of 5 years with the
allowance deducted for each year of assessment to be set off against
70% of statutory incoming and;
ii. Import duty and sales tax exemption for equipment used in the project
and are not produced locally. Equipment purchased from local
manufacturers is given sales tax exemption.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
2003 Budget
• The incentive be extended for a period of three (3) years until
31 December 2005.
• The company is required to implement the project within one
year from the date of approval.
• The use of other sources of RE was also extended to:
~ hydro power (not exceeding 10MW); and
~ solar power
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Targets and Outcome
• Current Status of SREP Projects (as at November 2003)
~ 52 projects approved and 6 licenses issued
~ Estimated capacity 317.95 MW (if fully implemented)
~ Biomass – 69.1%, landfill gas – 3.2%, mini hydro – 27.7%
• Off-grid RE utilization projects in Malaysia includes palm oil mills, sawmills,
solar system (thermal and photovoltaic panel) and mini hydro schemes
have been in commercial operation for decades.
• 320 palm oil mills – cogeneration systems utilizing RE.
• Palm oil waste (mesocarp fibre and palm kernel shells) – to fire up boilers.
• New aspect of RE in palm oil mills – improved efficiency in generating
steam and electricity using all waste generated in the mill.
• Excess electricity can be exported to the distribution grid.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Other RE Projects
• Cogeneration
~ Ban Heng Bee rice mill (rice husks)
~ Awana Kijal Golf & Bach Resort (solar water heating)
~ Solar drying on commodities and products I.e. paddy coffee noodles,
fish by Malaysian Agriculture Research and Development Institute
(MARDI.
• Solar energy
~ Solar Energy Research Park – Universiti Kebangsaan Malaysia
~ PV systems – rural areas where supply of grid electricity is not
available.
~ Government spent RM144 million to install these systems in remote
areas of Sabah and Sarawak.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
• Mini hydro
~ Imexa (M) Sdn. Bhd. – 13MW
~ Gopeng Berhad – 1.2MW
 Total electricity generated from cogeneration is 3,432.6 GWh which
826,385 MWh is RE.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Problems and Obstacles
Renewable Energy is promoted because:
• it is strategically important in the long term to contribute to the
sustainability of energy supply;
• it helps to address the environmental concerns that emerge due to the
emission of green house gasses; and
• it acts as a pollution control whereby industrial waste such as wood
residues, palm oil waste and agriculture waste could be converted into
usable forms of energy.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Insufficient utilization of RE due to:
• the emergence of new technologies that compete for the same raw
material used for RE, particularly biomass;
• the risk of selling to a single buyer and the bankability of RE projects;
• the uncertainty with respect to the technological development to convert
RE into usable forms;
• the economically unattractiveness of the generation of energy from RE
because of the availability of cheaper alternative energy, high cost of
generation and the inability to supply to the international grid;
• little public demand for energy from RE; and
• a lack of reliable information on the potential supply of RE at the national
level.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
POLICY RECOMMENDATIONS
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Future Challenge – Energy Conservation
To promote Energy Conservation there is a need to:
~ introduce a clear and transparent policy on energy conservation;
~ promote greater general public awareness on energy conservations
and its benefits to the current and future generation so that they can
be the catalyst in the promotion of energy conservation programmes
and projects;
~ increase the capacity and capability of the public and private sectors in
formulating, planning and implementing energy conservation policy,
strategies, programmes and projects;
~ promote a coordinated approach to energy conservation; and
~ promote greater and active private sector participation in energy
conservation programmes and projects.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
Future Challenge – Renewable Energy
To increase the share of RE in power generation, there is a need to:
~ ensure the supply of fuel in particular, palm oil is enough for power
generation. The uncertainty of fuel supply has been one of the
reasons the financial institution is reluctant to finance the RE
programmes;
~ ensure the price of RE fuels, particularly biomass, are competitive so
that the cost of producing electricity from these sources can be
competitive;
~ increase the general public awareness on the benefits of RE so that
the public will demand for electricity from RE sources and will be
willing to pay more for it because of their benefits. It may also facilitate
the introduction of green tariff if required; and
~ provide incentives to the financial institutions to finance more RE
projects.
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ENERGY CONSERVATION AND RENEWABLE ENERGY PROMOTION IN MALAYSIA
THANK YOU
www.st.gov.my
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