ISSUES AND CHALLENGES OF CLEAN ENERGY TO

ACHIEVE SUSTAINABLE DEVELOPMENT GOALS

IN MALAYSIA

LIM KOK PING

KES150022

DEPARTMENT OF CIVIL ENGINEERING

FACULTY OF ENGINEERING
UNIVERSITY OF MALAYA
KUALA LUMPUR

2018/19
Table of Contents

List of Tables ...............................................................................................................ii

List of Figures ..............................................................................................................ii

Abbreviations ..............................................................................................................ii

Abstract ...................................................................................................................... 1

Chapter 1: Introduction .............................................................................................. 2

Chapter 2: Literature Review ..................................................................................... 5

2.1 Renewable Energy (RE) .................................................................................. 5

2.1.1 Hydropower .......................................................................................... 5

2.1.2 Solar Energy ......................................................................................... 7

2.1.3 Biomass Energy .................................................................................. 10

2.2 Energy Efficiency (EE)................................................................................... 11

Chapter 3: Methodology .......................................................................................... 13

Chapter 4: Issues and Challenges of Clean Energy ................................................ 13

4.1 Financial Barriers........................................................................................... 13

4.2 Technical Barriers.......................................................................................... 14

4.3 Institutional/Regulatory Barriers..................................................................... 15

4.4 Information Barriers ....................................................................................... 15

Chapter 5: Recommendations ................................................................................. 16

Chapter 6: Conclusion ............................................................................................. 17

References ............................................................................................................... 18

i
List of Tables

Table 1: Installed capacity of major hydropower stations in Malaysia ....................... 7

Table 2: Annual solar radiation in Malaysia ............................................................... 9

Table 3: List of biomass-based power generation in Malaysia ................................ 11

Table 4: Cost of renewable energy ......................................................................... 14

List of Figures

Figure 1: Primary energy supply in Malaysia ............................................................. 4

Figure 2: Primary energy supply in Malaysia for 2006 and 2016 ............................... 4

Figure 3: Annual average solar radiation in MJ/m2/day in Malaysia .......................... 9

Figure 4: Information that are provided on each of the energy rating sticker ........... 12

Abbreviations

GHG Greenhouse gases

MEPS Minimum Energy Performance Standards

PV Photovoltaic

RE Renewable Energy

SCORE Sarawak Corridor of Renewable Energy

SDG Sustainable Development

WHO World Health Organisation

ii
Abstract

As we are facing energy resource shortages around the world, there is an urgent need

to develop a more sustainable energy system to cater for growth. The use of clean

energy sources is one of the feasible options. Malaysia is amply endowed with clean

energy sources and is environment-friendly in nature. However, the clean energy

capacities are grossly under-utilised, particularly from biomass and solar energy. The

Malaysian Government recognises the potential of clean energy as an alternative to

ensure the sustainability of energy resources. In addition to current clean energy

incentives, concerted efforts are underway to embark on programs to promote the

green technology market in Malaysia. This paper will identify the key issues and

challenges of clean energy development in Malaysia and explore the sustainable

future in Malaysia. This paper will also look in detail at the types of clean energy and

the barriers of it.

1
Chapter 1: Introduction

According to Brundtland Commission’s brief definition, sustainable

development is the ability to make development sustainable in which to ensure that it

meets the needs of the present without compromising the ability of the future

generations to meet their own needs (Kates, Parris, & Leiserowitz, 2005). The concept

of sustainable development does imply limits and it is not absolute limits, but limitations

imposed by the present state of technology and social organisation on environmental

resources and by the ability of the biosphere to absorb the effects of human activities

(Our Common Future, 1987). Sustainable development demands a sustainable supply

of energy resources that, in the long term, is sustainably and readily available at

reasonable cost and can be utilised for all required tasks without causing negative

impacts (Dincer, 2000). The Sustainable Development Goals (SDGs) were born at the

United Nations Conference on Sustainable Development in Rio de Janeiro in 2012

("Background on the goals," 2018). There are 17 SDGs in total which are a universal

call to action to end poverty, protect the planet and ensure that all people enjoy peace

and prosperity. In this paper, clean energy issues which is related to Goal 7 out of the

17 SDGs will be focused and further discussed.

One of the main contributor towards the rapid growth of Malaysia’s economy is

energy. Malaysia is now having higher dependent on energy sector as its progressing

towards becoming an industrialised country (Mustapa, Leong Yow, & Hashim, 2010).

The primary energy supply in Malaysia has a significant increase which is from 67023

ktoe in 2006 to 93398 ktoe as shown in Figure 1. There is different type of primary

energy supply in Malaysia which are coal and coke, natural gas, crude oil, petroleum

products, hydropower and other renewable energy. In 2016, the hydropower and

renewable energy contribute only 6% of the total energy used as shown in Figure 2

2
whereas the rest are contributed by non-renewable energy in Malaysia (NEB, 2016).

The fossil fuels used to generate energy through combustion will unpreventably

contribute to the emission of greenhouse gases (GHG). Therefore, most of the existing

energy in Malaysia is not environmentally friendly because it released a lot of GHG.

The GHG emitted will then contribute towards significant environmental impact which

is climate change and global warming. These could lead to ecological damage and

indirectly affects human health (Dincer, 1999). The direct and indirect effects of climate

change results in having 160,000 people deaths per year and the rate is estimated to

the increased by two fold in 2020 according to the statistics released by World Health

Organisation (WHO) (Mekhilef, Saidur, & Safari, 2011). In order to reduce the

environmental impact and tackle the issue of fossil fuels depletion, generation and

usage of clean energy must be maximise in Malaysia.

According to NC Sustainable Energy Association, clean energy is defined as

energy derived from renewable, zero-emission sources and energy saved through

energy efficiency measures (NCSEA, 2018). Renewable energy is one of the clean

source of energy which includes biomass, hydropower, geothermal energy, solar, wind

and wave energy, mainly used for power and heating (Tsagarakis et al., 2018).

Therefore, clean energy system must be implemented to achieve better sustainability

in Malaysia. The aim of this paper is to identify the key barriers of clean energy

development in Malaysia.

3
 Primary Energy Supply
100000
90000
80000
70000
60000
ktoe

50000
40000
30000
20000
10000
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year

Hydropower & Renewables Coal and Coke

Natural Gas (Sales Gas) Crude Oil, Petroleum Products and Others

Source: National Energy Balance 2016

Figure 1: Primary energy supply in Malaysia

2%

6%

35% 33%

2006 2016 41%

52%

11% 20%

Hydropower & Renewables Natural Gas (Sales Gas)

Coal and Coke Crude Oil, Petroleum Products and Others

Source: National Energy Balance 2016

Figure 2: Primary energy supply in Malaysia for 2006 and 2016

4
Chapter 2: Literature Review

2.1 Renewable Energy (RE)

Rapid depletion of fossil fuel reserves as well as climate change has driven the world

towards RE sources which are abundant, untapped and environmentally friendly.

Therefore, RE resources can be a good substitute for fossil fuels. Furthermore, in more

recent times, it has been realised that renewable energy sources and systems can

have a beneficial impact on the following essential technical, environmental,

economic, and political issues of the world (McGowan, 1990):

 Major environmental problems (e.g., acid rain, stratospheric ozone depletion,

greenhouse effect)

 Environmental degradation

 Depletion of the world’s non-renewable energy sources

 Increasing energy use in developing countries

Following sub-sections provide an overview of renewable resource potential for

electricity generation in Malaysia.

2.1.1 Hydropower

The hydropower project usually involves socio-economic issues and required

high capital investment. The development of a hydropower dam is overwhelmingly

complex because the issues are not confined to the design, construction and operation

of dams themselves but embrace the issues of social, environmental and political

issues (Yuksel, Yüksek, & Ceribasi, 2010). It is a renewable energy source and emits

negligible amounts of GHG (Ong, Mahlia, & Masjuki, 2011). In long term, electricity

generated from hydropower is comparatively cheaper compared to oil and natural gas

5
and the cost will not be overwhelmed by the fuel prices changing, which are currently

set by international market.

Moreover, hydropower projects had also brought socio-economic development

such as irrigation, flood control, tourism, local employment and skills development,

rural electrification and the expansion of physical and social infrastructure such as

roads and schools (Mohamed & Lee, 2006). These are among some of the reasons

why the government decided to implement the Bakun project having a capacity of

2,400 MW. The Bakun hydroelectric project will involve the construction of a 205 m

high rock filled concrete dam creating a reservoir of 695 km2 (Mohamed & Lee, 2004).

This reservoir is relatively small compared with some of the hydroelectric power

stations in other nations such as the 5,800 km 2 for the 2,400 MW Aswan Dam, 4,500

km2 for the 1,500 MW Kariba Dam in Zambia and 8,500km2 for the 850 MW Akosomb

Dam in Ghana (Mohamed & Lee, 2004). Therefore, hydropower is still the only

renewable energy that is financially feasible on a large scale in Malaysia. The

hydropower potential in Malaysia is estimated at 29,000 MW (Lidula, Mithulananthan,

Ongsakul, Widjaya, & Henson, 2007). However, only 6,086 MW out of the 29,000 MW

is currently utilised. Table 1 shows the installed capacity of major hydropower stations

in Malaysia with a total capacity of 6,086 MW. In 2008, the state government of

Sarawak has announced plans to develop several large hydroelectric projects under

the Sarawak Corridor of Renewable Energy (SCORE), where more sizeable dams are

being planned to bring 4 GW of total generation capacity by 2025 (Sovacool & Bulan,

2012).

6
Table 1: Installed capacity of major hydropower stations in Malaysia
Installed
Station Total (MW)
Capacity (MW)
1. Terengganu
Stesen Janakuasa Sultan Mahmud Kenyir 4 x 100 400
Stesen Janakuasa Hulu Terengganu 2 x 125 + 2 x 7.5 265
2. Perak
Stesen Janakuasa Temenggor 4 x 87 348
Stesen Janakuasa Bersia 3 x 24 72
Stesen Janakuasa Kenering 3 x 40 120
Chenderoh 3 x 10.7 + 1 x 8.4 40.5
Sg. Piah Hulu 2 x 7.3 14.6
Sg. Piah Hilir 2 x 27 54
3. Pahang
Stesen Janakuasa Sultan Yussuf, Jor 4 x 25 100
Stesen Kanakuasa Sultan Idris II, Who 3 x 50 150
Cameron Highland Scheme* 11.9
Stesen Kanakuasa Ulu Jelai 2 x 186 372
4. Kelantan
Pergau 4 x 150 600
Kenerong Upper 2x6 12
Kenerong Lower 2x4 8
5. Sabah
Tenom Pangi 3 x 22 66
6. Sarawak
Batang Ai 4 x 27 108
Bakun 8 x 300 2,400
Murum 4x 236 944
Total 6,086

Source: National Energy Balance 2016

Note: *Cameron Highland Scheme includes Odak, Habu, Kg. Raja, Kg. Terla and Robinson Falls
stations.

2.1.2 Solar Energy

Solar energy is the most promising backup energy as it has many benefits over

other resources. Solar energy is a naturally accessible and clean energy source

derived from the sun that can be exploited directly to generate electricity (Saidur,

2010). Solar energy did not release pollutant, low maintenance and high reliability,

with life span expectation of 20 – 30 years made solar power a favourable source of

energy to be used in the future (Saidur & Mekhilef, 2010). In Malaysia, the tropical

climatic condition is favourable for the development of solar energy due to abundant

7
sunshine with the average irradiance per year of 1643 kWh/m 2 (refer to Figure 1)

(Ahmad Hadri Haris, 2009). There are massive applications of photovoltaic technology

such as solar water heating, solar drying and solar photovoltaic; however, solar

applications were first introduced for rural electrification and telecommunication

(Ibrahim et al., 2009).

In Malaysia, the solar energy applications can be split into two main categories

which are solar thermal application and photovoltaic technologies. Solar thermal is a

technology where the heat from solar energy is exploited for heating purposes

whereas photovoltaic is a technology where arrays of cells which contain solar

photovoltaic material convert the solar radiation into direct current electricity (Saidur

et al., 2009). Solar thermal consists of solar heating and cooling system such as solar

water heaters, solar pool heating, solar assisted drying system, solar space heating

and cooling, ventilation, solar air conditioning and solar refrigerator (A. H. Haris, 2009).

Malaysia is ideal for large scale solar power installations due to its location in the

equatorial region (Mekhilef et al., 2012). Table 2 shows the summary of yearly average

solar radiation in various towns in the country. Table 2 indicates that Kota Kinabalu,

Bayan Lepas and George Town receive the highest level of the solar radiation in

Malaysia. According to the head of the Renewable Energy Unit, PTM, Penang and

Sabah are the best two spots to produce electricity from sunlight (Saidur et al., 2009).

8
Table 2: Annual solar radiation in Malaysia

Irradiance Yearly average value (kWh/m2)

Kuching 1470
Bandar Baru Bangi 1487
Kuala Lumpur 1571
Petaling Jaya 1571
Seremban 1572
Kuantan 1601
Johor Bahru 1625
Senai 1629
Kota Baru 1705
Kuala Terengganu 1714
Ipoh 1739
Taiping 1768
George Town 1785
Bayan Lepas 1809
Kota Kinabalu 1900

Source: Solar energy in Malaysia: Current state and prospects by Mekhilef, S. et. al.

Source: Potential application of renewable energy for rural electrification in Malaysia by H.

Borhanazad et. al.

Figure 3: Annual average solar radiation in MJ/m2/day in Malaysia

9
2.1.3 Biomass Energy

Malaysia is experiencing drastic growth in both population and economy and

there is a need to explore alternative energy sources to support her population and

commercial energy demand. Nowadays, biomass and biofuels are seriously being

considered because of their environment-friendly characteristics and their ability to

supply much more energy than conventional energy sources (Saidur, BoroumandJazi,

Mekhilef, & Mohammed, 2012). Biomass energy is an energy that is derived from living

matter such as field’s crops and tress. Agricultural and forestry wastes and municipal

solid wastes are also considered in the biomass category (Hinrichs & Kleinbach,

2012). Biomass is the fourth largest energy resource in the world and can be found

abundantly in Malaysia (Mekhilef, Saidur, Safari, & Mustaffa, 2011). The biomass

potential in Malaysia is estimated at 1,300 MW (Oh, Pang, & Chua, 2010). However,

only 260.4 MW is utilised out of 1,300 MW (NEB, 2016). Table 3 shows the biomass

based power generation in Malaysia. Besides, biomass energy is one of the important

potential sources of renewable energy in Malaysia, due to massive output from palm

oil residues and wood wastes including rice husk, sugarcane and municipal waste

(Petinrin & Shaaban, 2015). However, the main sources of biomass in Malaysia are

come from plantation residue and agricultural residue as shown in Table 3. Plantation

such as palm oil, rubber, cocoa, wood and timber and pepper are highly potential to

be used as biomass residue for electricity generation (Shafie, Mahlia, Masjuki, &

Ahmad-Yazid, 2012). Agriculture crop residues are divided into two categories of crop

residues and agricultural industry product (Schoneveld, German, & Nutakor, 2010).

10
Table 3: List of biomass-based power generation in Malaysia

Company name Biomass fuel Capacity (MW)

Sime Darby Plantations Sdn. Bhd, Selangor Agriculture residue 3.4

Sime Darby Plantations Sdn. Bhd, Perak Agriculture residue 1.5
Malaysian Newsprint Industries Sdn. Bhd. Agriculture residue 79.2
Tian Siang Oil Mill (Perak) Sdn. Bhd. Agriculture residue 4.8
Palm Energy Sdn. Bhd. Agriculture residue 6.5
Gula Padang Terap Sdn. Bhd. Agriculture residue 10.3
Seguntor Bioenergy EFB 11.5
Kina Biopower Sdn. Bhd. EFB 11.5
Bahagaya Sdn. Bhd. EFB 3
Evergreen Intermerge Sdn. Bhd. EFB 6
Seo Energy Sdn. Bhd. EFB 1.2
IJM Biofuel Sdn. Bhd. EFB 3.6
Felda Palm Industries Sdn. Bhd. EFB 7.5
IOI Bio-Energy Sdn. Bhd. Empty fruit bunch 15
Bell Eco Power Sdn. Bhd. Palm oil mill effluent 2
Achi Jaya Plantations Sdn. Bhd. Palm oil mill effluent 1.25
Recycle Energy Sdn. Bhd. Refused derive fuel 8.9
Bernas Production Setia Sdn. Bhd. Rice husk 0.2
Padi Beras National Bhd. Rice husk 0.7
Ban Heng Bee Rice Mill Rice husk 0.5
TSH Bio Energy Sdn. Bhd. Waste from palm oil 14
Nibong Tebal Paper Mill Sdn. Bhd. Wood dust 0.8
Bio-fuel Sdn. Bhd. Wood waste 10
Sabah Forest Industries Sdn. Bhd. Wood waste 57

Total 260.35

Source: A review on electricity generation based on biomass residue in Malaysia by S.M. Shafie et. al.

2.2 Energy Efficiency (EE)

Energy efficiency (EE) now has a significant place in the public policy agenda

of most developed countries. The importance of EE as a policy objective is linked to

commercial, industrial competitiveness and energy security benefits, as well as

increasingly to environmental benefits such as reducing CO2 emissions (Patterson,

1996). While everyone is enthusiastic about renewable and clean energy, many have

forgotten that most important “fuel” of all should come from the energy saved through

improved efficiency. Significant energy losses of up to 12% of power generated has

been reported in Malaysia before due to not-so-efficient transmission and distribution

11
grid (APEC, 2011). The prospect of the amount of energy that could have been saved

through efficient management is massive.

One of the key initiatives worth highlighting is the amendment to the Electricity

Regulations 2013 to allow the enactment of Minimum Energy Performance Standards

(MEPS) on selected electrical appliances and lighting. Under this regulation, all

refrigerator, air-conditioner, television, fan and lamp that are imported into the

Malaysian market must meet the minimum regulatory standards as a way to phase out

unnecessary energy wastages caused by inefficient electrical appliances and lighting

(Oh et al., 2010). MEPS-related information of each product being sold must be made

available to consumers by labeling as a compulsory requirement. Figure 2 shows the

information that each sticker provides, with the rating ranges from 1-star (consumes

most energy) to 5-star (consumes least energy).

Source: Energy Commission, 2018.

Figure 4: Information that are provided on each of the energy rating sticker

12
Chapter 3: Methodology

This paper is a review on issues and challenges of clean energy on achieving

sustainable development goals in Malaysia. Several articles were read to have better

understanding regarding to the sustainable development, clean energy and energy

efficiency in Malaysia. Besides, the facts and data in the articles were analysed and

interpreted to complete this paper. The data in this paper were extracted from the

articles in different journals. The major sources of the articles read and cited in this

paper are from Elsevier, Sciencedirect and Web Science. Keywords such as

“Renewable Energy”, “Clean Energy”, “Energy Efficiency” and “Sustainable

Development” were used to search the relevant articles for this paper.

Chapter 4: Issues and Challenges of Clean Energy

The RE development in Malaysia could be hampered by several barriers which are

financial, technical, regulatory/institutional and informational in nature that needs to be

addresses for the viability of RE development in the country.

4.1 Financial Barriers

Currently, there are many green energy projects are implemented with the

assistance of grants. This is because new technologies bear a certain amount of

uncertainty, thus it creates a barrier for its development. This in turn indirectly

increases the price of clean energy options and delaying their full integration into the

energy marketplace. Besides, the initial cost for the efficient equipment is relatively

higher than the standard alternative and the payback period or economic return may

be unacceptable (Mustapa et al., 2010). Clean or green energy projects generally face

difficulty in getting financing and bank loan approval due to the high risk involved and

13
also the lack of the technical knowledge on the part of the financiers. Generation of

energy from renewable resources is economically unattractive due to high cost of

energy generation and availability of cheaper alternatives energy. The relatively high

costs of energy generation from renewable resources, both in terms of investment

costs and final energy costs, compared to conventional energy further restrain the

efforts to promote the utilisation of renewable energy. RE development in Malaysia is

still in its infancy and has not realized the economies of scale with short payback

periods for developers to be interested in participating (Poh & Kong, 2002). Example

of electricity cost of RE in comparison with conventional energy is shown in Table 4.

In this regard, the electricity costs from biomass, geothermal and solar energy are

within the range of USD 7 – 25 cents/kWh, compared to the conventional electricity

costs of USD 4 – 6 cents/kWh (Hitam, 2000).

Table 4: Cost of renewable energy

Investment Cost Electricity Cost (USD
Source
(USD/kW) cents/kWh)

Hydro 900 – 10,000 1 – 12

(Small Hydro) (1,000) (5 – 10)
Biomass 1,700 – 2,000 7 – 15
Solar thermal power 3,000 20 – 25
Geothermal 1,500 7 – 10
Wind 1,000 1–2
Conventional electricity 700 – 1,200 4–6
Source: Sustainable Energy Policy and Strategies: A Pre-Requisite for the Concerted Development
and Promotion of the Renewable Energy in Malaysia by Samsudin bin Hitam

4.2 Technical Barriers

In general, RE support services are inadequate to cater for the three major

users of the technology: the domestic sector, the industrial/commercial sector, and

developers/investors (Poh & Kong, 2002). Besides, there are uncertainty in some

technologies that may not be suitable because of unreliable power supply such as

14
wind energy in Malaysia. Also, being unproven technology, it may not be able to

survive competitively with more established options. Besides, there is limited local

expertise on efficient practices and equipment handling. Moreover, there is uncertainty

of securing the long term biomass supply and price volatility. Project that do not have

biomass residues associated with their operation are subject to price volatility in the

biomass market. Furthermore, the nature of the electricity tariff undermines renewable

energy efforts.

4.3 Institutional/Regulatory Barriers

Renewable energy is given a lower priority by Malaysian enterprises due to

higher commitments accorded to development or expansion plans. There is a clear

need for refocusing the energy fuel mix in the country’s energy equation to give

importance to renewable energy. The government should allocate RE for its energy

usage to show its strong commitment. The subsidy for conventional fuel source should

be gradually eliminated and/or transferred to RE resources to promote RE

installations. Besides, lack of functioning institutional network on RE could be

overcome by encouraging joint effort between government agencies and private

institutions in order to explore the technical and commercial viability of energy

generation from renewable resources and enhancing capacity building of key players

such as government decision-makers, industries and utilities on RE implementation.

4.4 Information Barriers

There is a lack of information and awareness on the benefits of renewable

energy. Investment allowances and capital allowances were made available for RE

implementation since 2008. However, not many companies are aware of the special

incentives. There is a clear need for government agencies to help and advise

15
applicants and potential recipients how to go about applying for RE incentives and the

need for more channels for dissemination of information.

Chapter 5: Recommendations

The main concept of sustainability, which often inspires local and national

authorities to incorporate environmental considerations in setting energy programmes,

though being given many different meanings in different contexts, embodies a long-

term perspective. The increasing world population requires the definition and

successful implementation of sustainable development.

Public awareness is the initial step and very crucial in making the sustainable

development programme successful. This should be carried out through the media

and by public and/or professional organisations. The Center for Education and

Training in Renewable Energy and Energy Efficiency in Malaysia should counter the

issue of lack of awareness on RE by increasing the knowledge and awareness in

Malaysian education. The concept of RE and EE should be introduced into the

curricular activities in secondary schools and activities.

Necessary informational input on energy utilisation, environmental impacts,

renewable energy resources, etc. should be provided to public through public and

government channels. In order to achieve sustainable development, clean energy

sources should be promoted in every stage. This will create a strong basis for the

short- and long- term policies.

Financing is a very important tool that can be used for reaching the main goal

and will accelerate the implementation of renewable energy systems and technologies

for sustainable energy development of the nation. Some countries such as Germany,

16
apply the support in different way and simply exempt the people who use such systems

and technologies from some portion of their taxes.

Chapter 6: Conclusion

Clean energy resources and their utilisation are intimately related to sustainable

development. The problem of global warming and exhaustion of fossil fuel have

fostered the increased usage of less environmental-polluting renewable energy

sources closer to load demands in the distribution system. This paper presents the

potential of RE in Malaysia. The prospect and vision of RE is tremendously bright in

Malaysia if all stakeholders cooperate and collaborate synergistically to make the

vision a reality. Malaysia has abundant fossil fuels but they are fast depleting. The

current RE resources are not enough in Malaysia. Therefore, exploration into other RE

sources such as wind, tidal and biofuel/biodiesel needs to be done to meet future

energy demands. Renewable energy is the best alternative in providing electricity for

those living in rural areas that are far from utility grids or in places where extending the

utility grid is impossible.

17
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