Energy & Mining

Use the Sun

With the goal of generating 20% of national energy needs from renewable sources, the government is pursuing large-scale solar developments and providing incentives to businesses and homeowners.

Located just north of the equator, Malaysia is upgrading its national energy grid with ambitious plans to harvest one of its most abundant natural resources: sunshine. In recent years, the Southeast Asian nation has been expanding its solar power capacity, and in October 2018 Yeo Bee Yin, who heads the Ministry of Energy, Science, Technology, Environment, and Climate Change (MESTECC), set a goal to generate 20% of Malaysia’s electricity from renewable sources by 2025.

Currently, just 2% of the nation’s energy comes from green technologies such as wind and solar power, as electricity generation remains dependent on the country’s limited fossil fuel resources like oil, coal, and natural gas. Yet Bee Yin, a Cambridge-educated engineer turned lawmaker who was listed by the World Economic Forum as one of 2019’s Young Global Leaders, is determined to make the plan work.

“Energy is something that we Malaysians have taken for granted, given the country’s abundant natural resources and the steady supply of electricity,” she said. “With government drive, incentives, the right regulations, and above all the capital market, we can build vibrant private capital investment in the green industry in Malaysia.”

If her energy initiatives are implemented nationwide, Bee Yin said she expects Malaysia to save up to MYR46.9 billion, about USD11.23 billion, in energy spending by 2030. To realize her target, Bee Yin said the government has been engaging with industry leaders to draft project proposals and study the most effective green energy policies being implemented around the world.

Initial plans include various programs to encourage environmentally friendly practices, tax incentives to encourage higher rates of solar panel purchases by businesses and homeowners, the implementation of nationwide net energy metering, and large-scale solar (LSS) power plants that will wean the nation of fossil fuel dependency.

Earlier in 2019, the Energy Commission of Malaysia released a tender for a 500-MW grid-connected LSS project to be developed on Peninsular Malaysia. This is the third round of 500-MW solar tenders being issued under the state’s LSS program in support of public utility scale photovoltaic solar power plants. The third LSS plant, also known as LSS3, will sell power to the utility Tenaga Nasional Berhad through a power purchase agreement, with commissioning expected in 2021.
The LSS tender process was introduced in 2018 to replace the previous Feed-in-Tariff system, which was created to integrate small-scale solar power installations. In the first round of LSS tenders in 2016, the government allocated 200MW of solar power in Peninsular Malaysia and 50MW in Sabah. In the second round, which took place in 2017, the state approved 360MW in Peninsular Malaysia and 100MW in Sabah and Labuan. By the end of 2017, Malaysia had an installed solar energy capacity of about 350MW.

With such fast-paced development of the solar sector, many domestic and international energy companies have made proposals to help the government achieve its goals. Even the Malaysian state-owned oil and gas supplier, Petronas, and the Filipino utility, Meralco, have shown interest in expanding their renewable energy portfolios through major solar projects in the Southeast Asian nation.

In May 2019, Scatec Solar, a solar power company based in Norway, announced it had started commercial operation of its 65-MW Jasin plant in Malaysia. The first of three Scatec projects in the nation, which will total USD296 million in investments, the Jasin plant is expected to produce 94,000MWh per year and has doubled the company’s assets in operation to 130MW in the country.

“Southeast Asia continues to be a key market for us, and we expect the government of Malaysia will maintain high ambitions for the deployment of renewable energy in the country,” Raymond Carlsen, CEO of Scatec Solar, said in a press release in May.

In addition to ongoing big-ticket LSS projects, Bee Yin is also working to make solar energy more accessible to individual businesses and households. Recently, the minister launched a new website for the Sustainable Energy Development Authority (SEDA), which will serve as an information portal for citizens interested in learning about solar installation requirements, benefits, and incentives. The site helps consumers find solar providers, calculate the costs and savings involved with solar installations, and get informed on the latest solar energy regulations.

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