The Energy, Science, Technology, Environment and Climate Change Ministry in Malaysia has set a goal to generate 20 percent of electricity from renewables by 2030.
To achieve this target, Malaysia needs a total investment of RM33 billion, according to Yeo Bee Yin, the Minister of Energy, Science Technology, Environment and Climate Change.
Yeo indicated that investments would be given by the government, and through public-private partnerships and private financing. She added that it is important to make sure the natural grid is prepared to provide for this renewable energy generation mix, and study the policies to meet its target.
“The Securities Commission has already done a six-month study on green financing; it had formed the financing taskforce (for this purpose).
It reported on 21 action items to facilitate the RM33 billion investment in RE and the government will look at all the action items and implement them accordingly,” she told the press after officiating the inaugural 5-In-1 Power and Energy Asia Series exhibition.
For years, the Malaysian government has implemented incentives to grow the use of renewable energy. The current incentives are the Green Technology Financing Scheme and the Green Investment Tax Allowance.
The minister also commented that the third round of large-scale solar (LSS3), which ended in August 2019, saw the cost of generating per kilowatt-hour from solar energy lower than energy generation from natural gas sources.
But why does solar energy generation cost lower?
Well, according to Yeo, it was because of the development of high-technology solar panels that had permitted the project to be bid at a cost as low as 17.77 sen per kilowatt per-hour.
In fact, LSS3 projects were impending for Malaysians in an attempt to give more affordable, reliable and sustainable electricity to all people.
It is amazing that in Malaysia, solar energy is cheaper than the cost of gas production. And it is expected that the cost could go down further for renewable energy. For example, in the LSS3 bidding, which has just finished, the first four projects surrounded 365 Megawatts out of 500 Megawatts were actually below the gas-production price of 23.22 sen per kilowatt.
In the second round of LSS bidding, 32 sen per kilowatt was the lowest price. This price was the reference price when the bidding for LSS3 kick-started this year. The lowest bid was at 17.77 sen per kilowatt when the bidding exercise was closed.
As pointed out by Yeo, it was a 45 percent reduction in just a couple of years. She is confident that renewable energy prices will reach consistency with that of gas soon. In addition, Malaysia will continue to work on other types of renewable energy to successfully reach parity with or below the gas-production cost.
Benefits of Renewable Energy
It is important to hit the renewable energy target in Malaysia as there are many economic and environmental benefits, such as:
- Producing energy that generates no greenhouse gas emissions from fossil fuels and decreases air pollution
- Having a diverse energy supply, like solar power in Malaysia reduces dependence on imported fuels
- Renewable energy projects create economic development and jobs in manufacturing, installation and more, which is great for Malaysia
- Providing energy to many users at a lower cost.
In a Nutshell
The Malaysian government places great importance on the early adoption of renewable energy to help the industry to become more competitive, and to supply electricity not only to Malaysia but also overseas projects.
Finally, once the renewable energy target is hit, there would be more jobs and wealth creation opportunities.
“I believe the government is there to make sure everyone has a fair chance in life. Hence, depoliticizing the electricity supply industry takes a long time. After three years, I do not think it will be a final product”.
“That’s why RE is more than just being green; it is to make your tariff much more predictable, of which our electricity right now is hugely dependent on the global fuel price,” said Yeo.