Malaysia faces an extended and winding highway in assembly its 2050 internet zero goal.
Whereas decarbonising its power sector – which is answerable for some 80 per cent of the nation’s carbon emissions –might nip most emissions within the bud, the nation should first navigate evolving insurance policies, outdated grid infrastructure, and the intermittent nature of renewables, earlier than it could make progress.
Whereas clear power commitments have been made beneath the Nationwide Vitality Transition Roadmap (NETR) when it was launched in June 2023 to extend renewable power capability from 40 per cent to 70 per cent (56 gigawatts (GW)) by 2050 within the nationwide power combine, the power business faces a number of coverage, planning and infrastructure challenges.
How the power sector can overcome sectoral reforms – key to constructing long-term resilience and decarbonising the power sector – was a key subject of dialogue on the Malaysia version of the Asia Pacific Vitality Talks, organised by international power expertise firm Siemens Vitality.
The occasion introduced collectively high-profile stakeholders in Kuala Lumpur throughout the business, academia, and authorities, to debate Malaysia’s power transition.
Siti Safinah Salleh, the chief government officer of MyPower Company, highlighted a number of reforms that would allow Malaysia’s energy sector to satisfy each rising power demand and decarbonisation objectives.
MyPower is a special-purpose company beneath the Ministry of Vitality Transition and Water Transformation (Petra), tasked to organise key reforms of Peninsular Malaysia’s Electrical energy Provide Trade (MESI) initiative.
Safinah, who spoke at a panel dialogue on future-proofing Malaysia’s power sector, stated the company is taking a look at “structural modifications” to be applied within the medium time period in governance, planning, market mannequin and tariffs.
“There are a set of governance reforms which might be being undertaken now,” she stated, noting that the electrical energy provide planning achieved by the Committee for the Planning and Implementation of Electrical energy Provide and Tariff (JPPPET) is being reformed, as present planning methods are “not tenable for the long run.”
JPPPET is the electrical energy technology growth planning committee that oversees the event and coordination of power infrastructure initiatives within the nation. Safinah stated that MyPower is taking a look at revamping electrical energy planning from “finish to finish” to make sure it’s extra built-in.
The market mannequin and electrical energy tariff construction are additionally being reviewed to make sure the nation can enhance from the present single-buyer mannequin, with a centralised utility procuring electrical energy for the entire of Peninsular Malaysia.
Peninsular Malaysia consists of a number of states, together with Johor, Kedah, Kelantan, Malacca, Negeri Sembilan, Pahang, Penang, Perak, Perlis, Selangor, and Terengganu, together with the federal territories of Kuala Lumpur and Putrajaya.
Finish customers within the peninsular at the moment supply their electrical energy – together with those who depend on fossil fuels akin to gasoline and coal – from Tenaga Nasional Berhad (TNB), Malaysia’s largest utility and the only real operator of the nationwide grid.
Such reforms are essential to encourage and provides funding indicators in the appropriate areas based mostly on the appropriate prices, Safinah stated.
At present, MyPower is conducting a examine to reform the electrical energy tariff construction, with the result to find out the suitable tariff construction and replicate the precise value of electrical energy provide.
The brand new tariff construction is anticipated to be applied by 2025 and can doubtless affect the tip person resulting from changes in electrical energy tariffs.
Grid stability & the enter of renewables
Figuring out the appropriate power combine will contain upgrading grid infrastructure to accommodate renewable power and calculating long-term power sector emissions from the power sector.
Malaysia’s present electrical energy grid can solely transmit about 6 GW of renewable power, however the nation’s Nationwide Vitality Coverage targets a rise in complete renewables capability to 18.4 GW by 2040.
Nonetheless, resulting from Malaysia’s restricted availability of sources, together with monetary capital, Safinah highlighted that the nation must prioritise cautious planning of the power combine to make sure it’s each reasonably priced and resilient.
“It’s not one thing that we will afford to do [financially, in the same way] as most developed nations.”
She added that grid investments within the nation ought to first take into account the present design of the grid, the age of the gear, and automation capabilities, which might determine whether or not it could deal with the intermittency that comes with renewables.
Through the occasion, Sanjayan Velautham, chief working officer of Malaysia’s Vitality Fee clarified in a hearth chat that the federal government will concentrate on integrating variable renewable power – notably photo voltaic – into the combination and the battery storage wanted to assist it.
He assured that the federal government is keen to handle policy-related points to allow Malaysia’s power transition.
“We shouldn’t be shy to alter what our insurance policies are, if and when vital. However traders are all the time on the lookout for insurance policies which might be secure in the long run,” he stated, including that the federal government can be taking a look at hydrogen and inexperienced hydrogen to cater to the rising power demand within the nation alongside guarantees to section out coal by 2044.
Speed up power effectivity
Whereas such institutional reforms and new applied sciences are essential to decarbonise Malaysia’s energy sector within the long-term, rising power effectivity is low-hanging fruit, stated Thorbjörn Fors, group senior vp and managing director of Asia Pacific at Siemens Vitality.
Southeast Asian economies can decarbonise by power effectivity, Fors added, noting that this answer needs to be “extra outstanding” because it rapidly reduces emissions.
The Worldwide Vitality Company (IEA) as soon as described power effectivity as a “hidden gasoline” and an incredible lever in power transition and decarbonisation. Boosting effectivity requires a considerably decrease funding, the IEA notes, but additionally gives a sooner turnaround.
“This implies coming again to insurance policies, to each incentives or carrots and sticks that ought to work [to maximise energy efficiency],” Fors stated.
He famous that over the previous decade, one billion folks within the Asia Pacific area (excluding China) gained entry to electrical energy for the primary time.
Nonetheless, this progress mustn’t overshadow the pressing want for decarbonisation motion and managing power demand progress.
Asia’s energy sector is among the largest contributors to international GHG emissions, primarily pushed by coal-fired energy technology, which dominates the area’s power combine. Asia is answerable for round 80 per cent of worldwide coal consumption.
This consists of Southeast Asia, which generates half of its electrical energy from coal, accounting for 80 per cent of energy sector emissions.
Fors added that Malaysia is properly positioned to capitalise on a few of the rising alternatives which might be obtainable within the power sector, together with championing the Asean energy grid by excessive voltage direct present (HVDC) strains and powering energy-intensive infrastructure akin to information centres by renewables, be it photo voltaic or hydrogen.
Siemens Vitality is at the moment engaged on a number of initiatives that assist Asia Pacific’s power transition, together with grid modernisation, power effectivity, and renewable integration in Singapore, Malaysia, Japan, and Australia.
Whereas there could also be challenges forward akin to regulatory hurdles in Malaysia, companies ought to concentrate on making their applied sciences commercially viable and decreasing uncertainty for traders, who, Fors famous, ought to look in direction of the long run in assessing each decarbonisation and funding alternatives.
“We’re very inspired about alternatives in Malaysia, however there are some challenges that aren’t distinctive to Malaysia; a few of them are associated to policymaking and the regulatory setting. [However], builders and traders have a long-term horizon [with] this chance,” stated Fors.
