Episode 10 - Sistem Pemerintahan Dan Pentadbiran Negara Malaysia
#10 Malaysia
Transcript of #10 Malaysia
-
8/2/2019 #10 Malaysia
1/36
-
8/2/2019 #10 Malaysia
2/36
The Kajang WastetoEnergy Facility near Kuala
Lumpur in Selangor
-
8/2/2019 #10 Malaysia
3/36
Contents
Execuve Summary 2
Introducon 4
Conceptual and Research Methods 4
The Malaysian Electricity Sector 10
The Small Renewable Energy Power (SREP)
Programme 12
Challenges to Implementaon 18
Conclusions 23
Appendix A: List of Research Interviews 24
Appendix B: Small Renewable Energy Power
(SREP) Programme Guidelines 26
References 27
Acknowledgements 28
About the Authors 29
-
8/2/2019 #10 Malaysia
4/36
2
The Small Renewable Energy Power (SREP) Programme was the premier
policy mechanism implemented by the naonal government of Malaysia to
promote renewable electricity facilies less than ten megawas (MW) in ca-
pacity from 2001 to 2010. The SREP aimed to install 500MW of total renew-
able energy capacity by 2005, or about ve percent of naonal electricity
capacity. Although eligible technologies included a wide array of renewable
resources, SREP managed to install only 12MW by December 2005, less than
three percent of its original goal. Moreover, most of these projects focused
on only three types of renewable resources: byproducts from the palm oil
industry, small-scale hydroelectric dams, and waste-to-energy facilies such
as the one shown in Figure 1. Malaysian planners therefore modied and ex-
tended the SREP for another ve years and lowered its target to 350MW by
2010. However, by the end of December 2010 only 11 projects constung
61.7MW of capacity had been installed.
This study invesgates what happened. It explores the history of the SREP in
Malaysia, its drivers and benets, and the challenges planners faced when
implemenng it. It nds that the SREP largely failed to meet its targets be-
cause of technical, economic, and instuonal barriers. Obstacles were part-
ly technical, dealing with actual renewable electricity power plant design
and training issues; in part due to an economic worldview in Malaysia that
priorised low electricity taris, unaracve nancing rates, and connued
subsidies to fossil fuel producers; and partly instuonal, involving aws in
programme design, resistance, and regulatory failures.
It concludes with overall lessons for energy development and policy more
generally. SREP was weakened by capacity caps, a lengthy approval process,
lack of monitoring, exclusion of stakeholders, and few (if any) pre-feasibil-
ity studies. Its ecacy was diluted by fragmentaon and lack of cohesion
with other Malaysian energy policies. Relying on the dominant state-owned
electric ulity Tenaga Nasional Berhad proved to be a mistake, as was the
willing seller, willing buyer model of renewable energy power purchase
agreements. Electricity taris under SREP did not match true producon
costs, were not based on sound economics, and did not provide cost recov-
ery for project developers. Rather than abandon their renewable energy ef-
forts, Malaysian planners seem to have learned from the dicules facing
the SREP and are in the process of implemenng a progressive set of new
policies. Though it is uncertain if such new policies will achieve their goals,
the move is a sign that if you dont succeed at promong renewable energy
at rst, try, try again.
-
8/2/2019 #10 Malaysia
5/36
3
Figure 1: The 8.9MW Kajang Waste-to-Energy facility converts trash from around the Kuala Lumpur area into
electricity and other recycled products
-
8/2/2019 #10 Malaysia
6/36
4
The Malaysian Small Renewable Energy Power (SREP)
Programme aempted to install 500MW of qualied
biomass, biogas, municipal solid waste, solar photovol-
taics, and mini-hydroelectric facilies by 2005, but end-
ed up achieving only 12MW of capacity by that date.
Malaysian planners altered the SREP by lowering its tar-
get to 350MW and extending it for another ve years,
but by the end of 2010 just 11 projects and 61.7MW of
capacity had been built.
This report asks: what in the world happened? It ex-
plores the history of the SREP in Malaysia, its drivers and
benets, and the challenges planners faced when imple-
menng it. It then discusses what the experiences with
the SREP tell us about how to design future energy proj-
ects in developing economy contexts such as Malaysia.
The SREP was a central component of Malaysian energy
policy, and thus it provides an ideal situaon to explore
the dynamics at work within naonal energy planning.
The SREP was specically the cornerstone of the coun-
trys Fih Fuel Diversicaon Plan and also featured
prominently in the Eighth Malaysia Plan (2001 to 2005)
and the Ninth Malaysia Plan (2006 to 2010). Invesgat-
ing the drivers, benets, and challenges facing SREP of-
fers a deeper understanding of the pressures and inter-
ests related to Malaysian policymaking.
To understand the impediments facing the SREP, and
to be consistent with the other case studies, the au-
thors selected a qualitave case study methodology to
gain the richest possible level of insight into the dy-
namics of the SREP in Malaysia. As methodological
scholar Robert Yin has noted, such approaches allow
researchers to aain deep knowledge about a given
phenomenon and develop a highly descripve com-
prehension of the subject under study.1 Aer conduct-
ing a preliminary literature review of documents re-
lated to the SREP to provide context, plans were made
to conduct semi-structured research interviews and
site visits.
In designing the interview quesons, the authors em-
ployed an inducve approach to minimise interpreta-
ve bias caused by researchers trying to force answers
into preset cognive categories.2 We implemented this
approach by asking ve inial quesons for each inter-
view and then allowing interview subjects to elaborate in
as much detail as they wanted. The ve quesons were:
1. What are the primary energy policy and security
challenges facing Malaysia?
2. What were the drivers behind the SREP in Malaysia?
3. What were the major benets arising from the SREP?
4. What were the signicant challenges to implementa-
on?
5. What lessons or insights does the SREP oer for the
study of energy policy design and implementaon
more generally?
The authors supplemented these ve quesons with
probing response techniques when claricaon or
elaboraon was sought and reecng response tech-
niques in order to elicit reecon when warranted.3 Be-
cause of these interviewing strategies, parcipants oen
introduced new topics into the conversaon not anci-
pated by the authors. Interviews lasted between thirty
and ninety minutes with the average me of 45 minutes.
In total, 89 parcipants from 38 instuons from four
Malaysian provinces Sarawak, Selangor, Johor, and
Kedeah were interviewed over the course of March
2010 to February 2011. Those interviewed were se-
lected to represent the broadest possible array of stake-
holders associated with the SREP, and included mem-
bers of:
Engineering and consulng rms such as the Ber-
jaya Corporaon, Renewable Energy Berhad, Re-
cycled Energy Berhad, Core Competencies Berhad,
and Eco-Ideal Consulng;
Government and regulatory agencies such as the
Malaysian Energy Commission (Suruhanjaya Tena-
ga), Ministry of Energy, Green Technology, and Wa-
ter (Kementerian Tenaga, Teknologi Hijau dan Air),Malaysia Energy Centre (Pusat Tenaga Malaysia),
and the Economic Planning Unit in the Prime Min-
isters Department;
Energy companies and electric ulies, including
Petronas, Sime Darby, Tenaga Nasional Berhad,
Sarawak Energy Berhad, and Syarikat Sesco Ber-
had (formerly known as the Sarawak Electricity
Supply Corporaon);
Research instutes, civil society organisaons, and
trade organisaons including the Centre for Envi-
ronment, Technology, and Development Malaysia,
Malaysian Palm Oil Board, and United Naons De-
velopment Programme Malaysia.
-
8/2/2019 #10 Malaysia
7/36
5
Figure 2: Researcher Ira Marna Drupady at the Malaysian Palm Oil Board
Figure 3: Researcher Ira Marna Drupady and Dr. Benjamin K. Sovacool at the Sungai Kerling Minihydro Plant
-
8/2/2019 #10 Malaysia
8/36
6
Figure 4: Researcher Drupady speaks with a manager of the Bell Palm Oil Mill
Figure 5: Dr. Sovacool speaks with workers at the TDM Palm Oil Estate
-
8/2/2019 #10 Malaysia
9/36
7
Parcipants were guaranteed anonymity to encourage
candor, respect condenality, and adhere to instu-
onal review board guidelines at the authors instu-
on; however, Appendix A lists all instuons visited.
Figures 25 depict some of these visits and interviews.
To ensure a degree of triangulaon and reliability, the
literature review and interviews were augmented with
direct observaon and site visits to thirteen renewable
energy facilies in Malaysia over the course of July 2010
to February 2011, some of them shown in Figures 610.
Table 1: Summary of Malaysian renewable energy site visits
Name Type of facility Capacity Owner / Operator Locaon Connecon
Directly
supported by
SREP / 5th Fuel
Policy
Date
visited
Batang Ai
Hydroelectric
Staon
Hydroelectric 108MW Sarawak Energy
Bhd.
Batang Ai,
Sarawak
On-grid No Jul
2010
Bakun
Hydroelectric
Project
Hydroelectric 2,400MW Ministry of
Finance/Sarawak
Hydro Bhd.
Bakun,
Sarawak
On-grid No Jul
2010
Murum
Hydroelectric
Project
Hydroelectric 944MW Sarawak Energy
Bhd.
Murum,
Sarawak
On-grid No Jul
2010
Kg. Mudung
Abun
Microhydro
Plant
Microhydro 25kW Mudung Abun
Community
Denang,
Sarawak
O-grid No Jul
2010
Long Lawen
MicrohydroPlant
Microhydro 10kW Long Lawen
Community
Long Lawen,
Sarawak
O-grid No Jul
2010
Lubok Antu
Palm Oil Mill
Palm Oil 1MW Salcra Sdn. Bhd. Sri Aman,
Sarawak
O-grid No Jul
2010
Sungai Kerling
Minihydro
Plant
Minihydro 2MW Renewable Power
Sdn Bhd.
Kerling,
Selangor
On-grid Yes Jan
2011
Langkawi Cable
Car Solar-
Diesel Hybrid
Solar
photovoltaics /
Diesel
109.5kW Langkawi
Development
Authority and
Tenaga Nasional
Bhd.
Pulau
Langkawi,
Kedah
O-grid Yes Jan
2011
HybridIntegrated
Renewable
Energy System
Solar / Wind /Diesel
400kW State Governmentof Terengganu and
Tenaga Nasional
Bhd.
PulauPerhenan,
Terengganu
O-grid Yes Jan2011
TDM Palm Oil
Estate
Palm Oil 1.0MW TDM Plantaon
Sdn. Bhd.
Dungun,
Terengganu
O-grid No Jan
2011
Kajang Waste-
to-Energy Plant
Waste
Incineraon
8.9MW Core Competences
Sdn. Bhd., Recycle
Energy Sdn. Bhd.
Semenyih,
Selangor
On-grid Yes Jan
2011
Bukit Tagar
Sanitary
Landll
Landll Gas
Capture
1MW Kub-Berjaya Enviro
Sdn. Bhd.
Bukit Tagar,
Selangor
On-grid Yes Jan
2011
Bell Palm Oil
Mill
Palm Oil Mill
Euent (POME)
Methane
Capture
and Empty
Fruit Bunch
Incineraon
1.7MW gas
capture,
10MW
Combuson
(under
construcon)
Bell Eco Power
Sdn. Bhd. and Bell
Palm Industries
Sdn. Bhd.
Batu Pahat,
Johor
On-grid Yes Feb
2011
-
8/2/2019 #10 Malaysia
10/36
8
Figure 6: The 2MW Kerling Minihydro Plant
Figure 7: The 8.9MW Kajang Waste-to-Energy Plant
-
8/2/2019 #10 Malaysia
11/36
9
Figure 8: The 1MW Bukit Tagar Landll Gas Capture Plant
Figure 9: The 1MW Lubok Antu Palm Oil Mill
-
8/2/2019 #10 Malaysia
12/36
10
As Table 1 summarises, these included a mix of hydro-electric, palm oil estate, landll gas capture, waste in-
cineraon, and hybrid solar-diesel and solar-wind-diesel
facilies that were both o-grid and on-grid, large and
small in size, directly supported by the SREP and not sup-
ported, throughout the states of Johor, Kedah, Sarawak,
Selangor, and Terengganu. The authors also aended a
Renewable Energy Power Purchase Agreement (REPPA)
negoaon, the Bengkel Bersama Stakeholders Bagi Pe-
nyediaan on January 27, 2011, hosted at the Marrio
Hotel in Putrajaya, Malaysia.
To beer understand the drivers pushing the creaon
of the SREP, it is necessary to briey introduce readers
to the Malaysian electricity sector. Though Table 2
shows that prominent naonal policies related to en-
ergy have existed since 1949, four are the most per-
nent: the countrys Naonal Energy Policy of 1979, the
1981 Four-Fuel Diversicaon Strategy, the Electricity
Supply Act of 1990, and the Fih Fuel Diversicaon
Policy of 2001.
The Naonal Energy Policy of 1979 came aer the oilshocks of the 1970s, when Malaysia was heavily depen-
dent on imported oil. It spulated three main objec-
ves: (1) ensure an adequate and cost eecve supply,
in essence maximum use of domesc resources; (2)
ulise energy eciency and conservaon and eliminate
wasteful consumpon; (3) protect the environment,
or achieve the other two objecves without degrading
Malaysias rich ecological and social heritage. The Four
Fuel Diversicaon Strategy of 1981 explicitly promoted
hydroelectricity, natural gas, and coal as an alternave
to oil, and dropped naonal oil dependence from 90
percent in 1980 to less than ten percent in 2003.4 The
Electricity Supply Act, which one respondent called the
bible and another the biggest umbrella, everything
else comes underneath it, started the privasaon of
the electricity sector and enabled independent power
producers to enter the wholesale electricity generaon
market. Aer a major blackout in 1993 followed by roll-
ing brownouts in 1995, the government began planning
its Fih Fuel Diversicaon Policy of 2001 intended to
promote other forms of renewable energy. These mea-
suresespecially privasaon and the fuel diversica-
on policieshave seen oils share of naonal energy
supply drop precipitously since the 1980s and the rise of
Figure 10: The 109.5kW solar-diesel hybrid at the upper terrace of the Langkawi Cable Car
-
8/2/2019 #10 Malaysia
13/36
11Date Event Descripon
1949 Central Electricity
Board formed
Central Electricity Board (CEB) created by the government for electricity
generaon, transmission, and distribuon in Malaysia.
1965 Naonal Electricity
Board formed
CEB is renamed to the Naonal Electricity Board (NEB).
1974 Petroleum
Development Act
The state-owned Petronas is given exclusive rights to own, explore, and produce
petroleum and related products.
1975 Naonal Petroleum
Policy
Sets regulaons for the oil and natural gas industries to ensure economic
development needs are met.
1979 Naonal Energy Policy Sets the three objecves of supply, ulisaon, and the environment.
1980 Naonal Depleon
Policy
Naonal Petroleum Policy is augmented to extend the life of domesc energy
reserves and lower reserve to producon raos.
1981 Four-Fuel
Diversicaon Strategy
Strategy intends to develop non-oil based sources of energy such as natural gas,
hydropower, and coal.
1990 Electricity Supply Act Established the state-owned ulity Tenaga Nasional Berhad to be peninsular
Malaysias naonal electricity provider, created by privasing and corporasingthe NEB.
1999 Pusat Tenaga Malaysia
formed
Pusat Tenaga Malaysia (PTM) created to promote energy eciency and
renewable energy.
1999 Five-Fuel
Diversicaon Strategy
Renewable sources of energy recognised as the h primary fuel in naonal
energy supply.
2001 Small Renewable
Energy Programme
launched
Small Renewable Energy Power (SREP) Programme created to achieve ve
percent renewable electricity supply by 2005.
2002 Malaysian Energy
Commission formed
Department of Electricity and Gas Supply at the Ministry of Energy transformed
into a regulatory agency responsible for energy maers
Table 2: Timeline of major energy policy events in Malaysia, 1949 to 2010
Figure 11: Fuel mix for Malaysian electricity generaon, 1995 to 2010 (%)
-
8/2/2019 #10 Malaysia
14/36
12
coal and hydroelectricity in the naons electricity mix,
depicted in Figure 11.
Notwithstanding reliance on fossil fuels to meet most
naonal energy and electricity demand, Malaysia is
blessed with abundant renewable resources. One study
esmates no less than 30,700MW of renewable energy
potenal shown in Table 3, when in 2009 exisng in-
stalled capacity was less than 23,000MW.5 Similarly, the
Internaonal Energy Agency projected that realisablepotenal for renewables in Malaysia was about 130 Ter-
rawa-hours (TWh) per year by 2030, but that in 2006
the country generated only 101.3TWh. Both esmates
imply that Malaysia could possibly be completely pow-
ered by renewable resources.6
Malaysian planners seem cognisant of this potenal, and
embarked in 2001 to capture some of it through the
Small Renewable Energy Power (SREP) Programme. One
expert we interviewed explained the decision to pro-
ceed with the SREP as follows:
We had the four fuel policy operang for many
years, and it was basically successful at promot-
ing large hydro and a collecon of natural gas and
coal-red power plants. But we saw the need to
promote other types of renewable energy. Though
we had some diesel power plants, these were inef-cient, costly, and pollung. Most of the large hy-
dro potenal had either already been tapped, or
were in places like Sabah and Sarawak, hundreds
of kilometres away from major urban centres. In-
creased reliance on coal was thought to be too
environmentally damaging, and was somemes
opposed by local communies. Natural gas was al-
ready an uncomfortably large share of the naonal
electricity porolio. Renewables were seen as the
only viable alternave.
The Malaysian government also recognised that a collec-
on of pernicious barriers prevented the wider adopon
of renewable energy in the late 1990s and early 2000s.
These included lack of a naonal policy in support of
renewable energy, the percepon that waste-to-energy
and palm oil technologies were pollung, inability to
cover project costs and lack of nancing, and poor coor-
dinaon among dierent naonal players and ministries.
One study went so far as to argue that renewable energy
was looked upon as a primive and dirty fuel.7
To address these issues, the Ministry of Energy, Green
Technology, and Water announced the SREP on May 11,
2001. It was intended to be the main vehicle to meet
the renewable energy targets espoused by the Eighth
and Ninth Malaysia Plans as well as the Third Outline
Perspecve Plan. Eligible technologies for the SREP were
limited to biomass, biogas, municipal solid waste, so-
lar photovoltaics, and mini-hydroelectric facilies. The
Ministry established a Special Commiee on Renewable
Energy (SCORE) to oversee the programme and permit-
ted projects up to 10MW of installed capacity. These
projects could sell to two of the three major ulies in
Malaysia: Tenaga Nasional Berhad (TNB) in peninsular
Malaysia or Sabah Electricity Sendirian Berhad (SESB)
in Borneo. Project developers had to negoate a REPPA
with the relevant ulity according to a willing buyer,
willing seller model and were granted a license for 21
years aer the commissioning of a plant. Renewable en-
ergy project developers were responsible for the costs
of grid connecon and ulity system reinforcement in-
cluding cables, transformers, switchgears, protecon
equipment, and metres, and were required to distribute
electricity into the network between 11 to 33 kV. Facili-
es had to be within ten kilometres of the nearest in-
terconnecon point to the grid, and all facilies had to
meet regulaons set by the Department of Environment.
Lastly, a minimum 30 percent equity had to be held in all
projects by Bumiputera (indigenous Malaysian) stake-
holders, and foreign companies were allowed to parci-
pate only with a maximum equity of 30 percent. Project
developers also had to go through a somewhat cumber-some and complicated process involving an applicaon
for approval followed by an applicaon for license
depicted in Figures 12 and 13. Ancillary support mecha-
Sources MW
Hydropower 22,000
Solar photovoltaics 6,500
Biomass and Biogas 1,300
Mini-Hydro 500
Municipal Solid Waste 400
Total 30,700
Table 3: Achievable renewable energypotenal for Malaysia (MW)
-
8/2/2019 #10 Malaysia
15/36
13
Figure 12: SREP Approval applicaon process owchart
-
8/2/2019 #10 Malaysia
16/36
14
Figure 13: SREP License applicaon process owchart
-
8/2/2019 #10 Malaysia
17/36
15
nisms, such as Pioneer Status or Income Tax Allowance
and tax exempon on equipment, were implemented in
tandem with the SREP. Appendix B provides the full list
of project criteria.
At the me the SREP was launched, it was believed
that accomplishing a ve percent share of renewable
electricity supply by 2005, or a total of 500 megawas
(MW)the stated goal of the Eighth Malaysian Plan
would save the country about US$2 billion over those
ve years.8 Respondents told us that the SREP was de-
signed to accomplish mulple goals.
First, it was seen as a way to tap the waste energy po-
tenal from the palm oil industry, one of the largest ag-
ricultural sectors in the country. One parcipant told us
that we thought we could get at least 600MW alone,
100MW above the target, from the 400 plus palm oil
mills producing millions of tons of empty fruit bunches,
palm fronds, and palm oil mill euent each year. In-
deed, at the price of only US$30 per barrel of oil, one
study esmated the value of palm oil waste at more than
US$200 billion.9 Given that the price of oil is three mes
that amount in early 2011, ostensibly US$600 billion of
value exists. A separate assessment calculated at least
665MW of renewable energy capacity from biomass as
well, gures presented in Table 4.10 Another study as-
sessed a whopping 2,400MW of potenal,11 and yet an-
other study calculated 2,059MW from the 71.3 million
tons of empty fruit bunch produced each year along with
the 19 million tons of crop residue.12
Second, the SREP was heralded as a way to promote
innovaon and technological learning in alternaves
Malaysia had lile experience with, such as waste incin-
eraon, small-scale hydro, and solar photovoltaic panels.
Malaysians produce roughly 20,000 tons of waste every
day, enough to bury the Petronas Towers under a pile of
trash every four days, but also enough to create US$10
billion of revenue if converted to electricity. Solar ener-
gy potenal was cited as extremely favorable with 6.0
to 6.5kWh of potenal energy per square metre, given
Malaysias locaon on the equator.13
Third, the SREP was seen as a mechanism to also help
achieve the countrys remaining electricaon goals.
While more than 99 percent of the countrys populaon
has access to the exisng grid, about 150,000 to 200,000
homes, mostly in the poorest and most rural parts of Ma-
laysia, sll rely on diesel generators or receive no modern
energy services at all. The SREP programme was partly
hoped to develop smaller scale systems, especially mini-
hydro and solar, which would reach hard-to-access popu-
laons. Another respondent commented that hydro
and solar provide a convenient and cost-eecve way to
produce power in rural areas as it is near impossible to
build transmission lines to cater for the small number of
homes currently o-grid, and SREP was believed to help
develop suitable o-grid and micro-grid technologies.
Fourth and nally, SREP was conceived as a way to reduce
Malaysias greenhouse gas emissions and environmental
polluon, especially from the palm oil industry. Every
single ton of palm oil creates six tons of palm fronds,
ve tons of empty fruit bunches (EFB), one ton of palm
trunks, one ton of mesocarp ber, 750 kilograms of palm
kernel cake and endocarp, and a staggering 100 tons of
palm oil mill euent (POME). Before it is discharged,
POME is usually collected in open ponds or storage
takes to degrade, a pracce that produces voluminous
amounts of greenhouse gas emissions, as every ton cre-
ates 28 cubic metres of methane.14 Taken together, such
emissions from the palm oil industry account for roughly
12 percent of naonal greenhouse gas emissions, and
converts what is in essence a fugive emission into a
source of electricity that was seen as aracve.
Despite these reasons in favor of renewable energy,
however, implementaon did not proceed as planned.
In 2003 a study noted that major obstacles remained in
Malaysia two years aer SREP had started, including lack
of economies of scale, poor percepon of commercial vi-
ability for projects, and higher risk premiums for nanc-
ing.15 At the end of 2005, SREP had achieved a meager
2.4 percent of its original goal. As the Minister of Energy,
Tun Dr. Lim Keng Yaik, noted at the me:
The SREP has not been able to connect the envis-
aged 500MW of electricity generated from renew-
SourcesQuanty
(kton/yr)
Potenal
Generaon
(GWh)
Potenal
Capacity
(MW)
Rice Mills 424 263 30
Wood Industry 2,177 598 68
Palm Oil Mills 17,980 3,197 365
Bagasse 300 218 25
Palm Oil
Mill Euent
(POME)
31,500 1,587 177
Total 72,962 5,863 665
Table 4: Biomass electricity potenal in Malaysia
-
8/2/2019 #10 Malaysia
18/36
16
able sources to the naonal grid. What it has been
able to deliver in the last four years is 12MW from
two projects. The wide gap between policy and im-
plementaon clearly indicates that there are barri-
ers to the eecve transion from a convenonal
to a sustainable model of energy development.16
The Ministers comments were conrmed by an inde-
pendent study which noted that the development of
renewable energy technology was not suciently de-
veloped in Malaysia.17 Costs of producon were sll
higher than many other countries at 725 U.S. cents/
kWh, compared to convenonal electricity costs of 46
U.S. cents/kWh. Lack of informaon on renewable en-
ergy was referenced as a major barrier, palm oil facilies
were sll not converng their waste to electricity, and
weak public awareness about the benets of renewable
energy was widespread.
Because of these problems, Malaysian planners extend-
ed the SREP for another ve years but scaled down its
targets to 350MW: 300MW in peninsular Malaysia, and
50MW for Sabah in Borneo. When, yet again, implemen-
taon lagged far behind targets, the SREP was revised
at the end of 2006 to increase taris from 17 Malaysian
sens/kWh to 19 sens/kWh and later 21 sens/kWh, though
this was only for biomass and biogas technologies, not
mini-hydro and solar system, as shown in Table 5.
Even the revised taris, nonetheless, did not signicantly
accelerate parcipaon in the programme. At the end
of 2010, Table 6 shows that only 61.7MW of renewableenergy capacity had been connected to the grid from 11
projects. Of these projects, roughly 80 percent were re-
lated to waste and palm oil. As Table 7 illustrates, an addi-
onal 33 projects with 210.85MW of capacity were in the
pipeline but not yet approved or licensed. Total renewable
energy supply, including projects supported by SREP as
well as those from other programmes an incenves, was
217MW,18 less than a one percent share for the country.
Renewable
electricity priceBiomass Biogas
Mini
hydro
Solar
Photovoltaics (PV)
17 sen / kWh
(2001)X X X X
19 sen / kWh
(2006)X X
21 sen / kWh
(2007)X X
Table 5: Revised taris under the SREP, 2001 to 2009
Project Developer Project Locaon Capacity (MW) Fuel Source
TSH Bioenergy Sdn. Bhd. Tawau, Sabah 10Empty fruit
bunches (EFB)
Seguntor Bioenergy Sdn. Bhd. Jalan Seguntor, Sandakan Sabah 10 EFB
Kina Biopower Sdn. Bhd. Lot 2, Jalan Seguntor, Labuk Road Sandakan Sabah 10 EFB
Esajadi Power Sdn. Bhd. Sungai Kadamaian, Kundasang, Sabah 2 Mini hydro
Esajadi Power Sdn. Bhd. Sungai Pangapuyan, Kota Marudu, Sabah 4.5 Mini hydro
Recycle Energy Sdn. Bhd.Lot 3041 & 3042 Mukim Semenyih Daerah Hulu
Langat Selangor5.5 Municipal waste
MHES Asia Sdn. Bhd.HS(D) 12572, Lot PT No. 3226, Mukim Serng,
Negeri Sembilan10 EFB
AMDB Perng Hydro Sdn Bhd Sg. Perng, Bentong Pahang 4 Mini hydro
Renewable Power Sdn. Bhd. Sg. Kerling , Selangor 2 Mini hydro
Bell Eco Power Sdn. Bhd. Parit Ju, Batu Pahat, Johor 1.7 Biogas
Jana Landll Sdn. Bhd. Puchong, Selangor 2 Biogas
Table 6: Licensed and operaonal SREP projects (as of February, 2011)
-
8/2/2019 #10 Malaysia
19/36
17
For all intents and purposes, the SREP was subopmal.
As one respondent told us:
The SREP is not a success. From 2001 to 2008,
most of the duraon of the programme, 50 proj-
ects were approved for a capacity of 288MW,
but 40 percent were cancelled, and one-quarter
were issued with licenses but never started op-
erang. One-third were not issued with licenses,
and only 13MW was built for the rst eight years
of the programme.
Another parcipant calculated that about two-thirds
of the projects proposed under SREP never progressedand that even today, the major players are not geng
into the renewable energy business they just dont
want to get involved. Sll others commented that our
conclusion is that the SREP is a failure. The government
needs to relook at it if they wish to see some success
in the near future and the SREP experience has been
dismal. A slew of recent studies have also implied the
same, with one interviewing key stakeholders in Malay-
sia and nding that regulators and investors commonly
see renewable energy as immature, exoc, unproven,
and risky.19 Another argued that ulisaon of renew-
able energy [in Malaysia] is sll very low.20 The Inter-
naonal Energy Agency documented that a lack of stan-
dard codes and cercaon, inadequate training, and
mistrust among nanciers and investors sll remained in
Malaysia.21 Another study analogously argued that lim-
ited local experience, improperly designed regulaons,
and lack of awareness were impeding the diusion of re-
newable energy.22 Yet another study concluded in their
assessment that renewable energy in Malaysia is sll
being generated on a small-scale basis [even though]
Malaysia is blessed with abundant resources The
progress in bringing renewable energy generaon into
the mainstream has been slow.23
Why, then, did the SREP fail to meet its targets, catalyze
the growth of the renewable energy industry, and over-come the barriers it was intended to prevail against? This
secon explains the challenges facing SREP implementa-
on. It argues that obstacles were partly technical, dealing
with actual renewable electricity power plant design and
training issues; in part economic due to low electricity tar-
is, unaracve nancing rates, and connued subsidies
to fossil fuel producers; and partly instuonal, involving
aws in programme design, resistance, and regulatory
failures. Table 8 provides an overview of these barriers.
Technical Obstacles
One major technical obstacle involved developing re-
newable electricity systems that would work in a Ma-
laysian context. One respondent noted that the palm
oil industry, for instance, had no experience with ad-
vanced boiler technology and no understanding of bio-
CategoryNumber of
projectsCapacity
Mini-Hydro 9 50.8MW
Biomass 14 140MW
Biogas 10 20.05MW
Total 33 210.85MW
Table 7: SREP projects under construcon and
approved (but not yet licensed or operaonal)
Dimension Explanaon
Technical
Lack of technology such as boilers that
could combust empty fruit bunches and
experience with digesters.
Insucient educaon, training, and
sharing of experience among all
stakeholders (e.g. planners, developers,
electric ulies, research instutes,
nancial instuons)
Expensive feasibility studies and high grid
interconnecon costs.
Economic
Low electricity taris for renewable power
producers.
Unfamiliarity and resistance of nanciers
and bankers.
Subsidies to fossil fuels and the failure
to include the cost of externalies in
electricity prices.
Instuonal
Flaws in programme design including
capacity caps, long lead mes for project
approval, and no authority given to
programme managers over enforcement.
Disinterest and occasional hoslity
from naonal ulies and convoluted
Renewable Energy Power Purchase
Agreements (REPPAs).
Lack of adequate and strongly
implemented naonal policy frameworks.
Table 8: Summary of challenges facing theSREP in Malaysia
-
8/2/2019 #10 Malaysia
20/36
18
gas technology, meaning engineers encountered numer-ous problems related to how to combust empty fruit
bunches or gasify palm oil euent. Thus, biomass proj-
ects had to proceed with a lot of costly trial and error.
Small hydroelectric projects had trouble because of the
great uctuaon in water supply between the wet and
dry seasons, and were also locaon dependent, given
the ten kilometre restricon set by TNB. Most of the
Malaysian landlls were not designed or well suited to
capture methane gas, and the country had praccally
no experience with designing and using solar panels to
generate commercial electricity, which is why no solar
projects were ever sponsored by SREP.
The Bukit Tagar sanitary landll gas capture power plant
we visited, took years to design and involved geo-syn-
thec clay liners, high design polyethylene blankets, wa-
ter treatment facilies, anaerobic closing ponds, gas ex-
tracon wells, pumps, blowers, ame arresters, and are
stacks. The Kajang waste incineraon plant we visited
had to specially design a refuse derived fuel cycle that in-
volved magnecally sorng waste, drying and shredding,
spling and recycling non-combusble items, digesng
organic waste, combusng the remaining material, and
treang euent. One ocial at the Bell Palm Oil biogas
facility we visited shown in Figure 14 called designing thedigester system as a nightmare, and also menoned
how devastang palm oil plantaons could be to the lo-
cal environment if managed improperly. As one respon-
dent summed it up, when the SREP kicked o, not many
people knew about renewable electricity, so we had to
develop it all on our own.
Another closely related obstacle was lack of skills and
insucient educaon, training, and quality assurance.
While it is clear that all stakeholders are making their own
eorts to build their capacity in renewable energy, one
respondent noted that there was no centralised training
instuon, no place to learn about how to innovate tech-
nology, instead we had to do our research on an ad hoc
basis. Another respondent menoned that although his
instute undertakes research in solar, biogas, waste and
other renewable energy technologies, their ndings have
contributed lile toward the SREP. It is therefore not sur-
prising that there is a seeming imbalance when it comes
to stakeholder capacity, with some real innovaons hap-
pening in some places but not others.
Such lack of capacity became apparent during two of
the site visits we conducted to TNB renewable energy
demonstraon plants. We showed up at the rst, a hy-
Figure 14: The digester tanks of the 1.7MW Bell Palm Oil Facility
-
8/2/2019 #10 Malaysia
21/36
19
brid system at the Langkawi Cable consisng of 16kWpof solar panels and two 50kW diesel generators shown
in Figure 15, only to nd that it was no longer working,
despite being built in 2002. As one of the operators told
us, all the solar panels are broken, lightning short cir-
cuited the system, we cant get spare parts and wouldnt
even know what to do with them if we did. The second,
a TNB solar-wind hybrid project on Pulau Perhenan in
Terengganu, was no longer operaonal due to lack of
maintenance skills and interest from its operators.
As one local community member told us, that system
hasnt been working for years even though its sll fea-
tured on the TNB website, its just decoraon now, its
been long abandoned. Even at one of the operaonal
SREP sites we visited, one of the facility managers told
us that spare parts and maintenance is a big problem,
we had to hire a full-me technician from China to live at
the plant, because there was no one available to train us
in what to do. One dimension to this issue of capacity is
poor project feasibility assessments, with many sub-
standard projects passing the approval stage that never
should have. The reason is that planners didnt really
have the experse to approve a project, but they did
anyways because they wanted to be seen as cooperang
with the new SREP. Clearly, the lack of a strong capac-
ity building component within the SREP is a missed op-portunity for stakeholders to build experse, share their
experiences, and propagate best pracces.
A nal technical obstacle relates to onerous interconnec-
on and feasibility requirements spulated by TNB. One
project developer exclaimed that we were forever at the
mercy of TNB to say which substaon to interconnect to,
what type of circuit breakers and equipment we had to
use, how much we had to spend on feasibility studies.
That same project developer esmated that such com-
plicaons accounted to a staggering 20 percent of the
total project cost (though other project managers told us
interconnecon costs amounted to only 25 percent of
total costs). Another remarked that its hard connecng
to TNBs grid, there is the legimate concern that our dis-
tribuon system could damage their network, but they
also set very stringent protecon requirements that re-
ally complicated the technical eciency of our project.
Economic and Financial Obstacles
In the economic realm, insucient taris for renew-
able electricity providers hobbled project develop-
ers. One respondent noted that the taris paid to
SREP developers were not based on sound economic
principles, they were set with no consideraon of ac-
Figure 15: The inoperable solar-diesel hybrid system at the Langkawi Cable Car in Kedah, Malaysia
-
8/2/2019 #10 Malaysia
22/36
20
tual cost recovery. The original tari of 17/sen perkWh was shockingly low, far below even the actual
cost of operang SREP facilies. In the case of the
Bukit Tagar sanitary landll, operators told us that it
would have made more sense to just use the electricity
onsite for the facility, since they were paying 30 sen/
kWh for electricity but could only sell at 21 sen/kWh.
This, however, was not allowed, forcing the landll
in essence to sell electricity to TNB for 21 sen per unit
that we then buy right back at 30 sen. Another project
developer told us that SREP taris pay only enough to
cover operaon costs and to run the plant, we make
no money at all unless we get carbon credits under the
CDM. A third project developer we spoke with con-
curred, and noted that without CDM, projects would
never make itSREP is insucient. At another facility,
respondents argued that the tari is too low, we dont
even get enough to cover operaons, we need extra
income from pping fees, recycling, and making plas-
c resin onsite. For solar projects, respondents men-
oned that at least RM 1.70 per kWh would be needed
to make projects viable, more than seven mes the
rate currently oered by TNB. As another respondent
noted, the SREP rate is way too low for such projects
to be commercially viable.
Because the tari was so low, respondents noted thatmany project developers could make more money do-
ing other things with renewable fuels. Palm oil mill-
ers, for example, can use wastes and residues to gen-
erate grid electricity, or as a component of maresses
and chipboards, for use in the paper and pulp industry,
to make animal feed, or to manufacture compost fer-
liser. SREP is just another opon for mills, one re-
spondent told us, but its not a key factor, something
extra, somemes a nuisance, somemes worth do-
ing. Managers also spend much of their me focusing
on acquiring land for the expansion of palm oil mills
shown in Figure 16, rather than generang electricity.
Landll gas, similarly, can be used to generate electric-
ity, or when upgraded and sweetened used for a va-
riety of other applicaons including heang, cooking,
and a transport fuel.
A separate economic obstacle dealt with lack of nanc-
ing and the unfamiliarity of Malaysian banks with re-
newable electricity projects. One respondent noted
that when SREP started, local banks were unwilling
and unready to give nancing. Project developers usu-
ally had to go abroad to Chinese and Japanese nan-
ciers. Another commented that bank managers had
Figure 16: Land in Perak is cleared to make way for the expansion of palm oil mills
-
8/2/2019 #10 Malaysia
23/36
21
no idea about renewable energy, its hard for them to
visualise what a landll gas capture or municipal solid
waste plant looks like.
Lastly, subsidies to natural gas and oil, along with energy
prices that do not reect full costs result in an oversup-
ply of electricity generated from fossil fuel sources andimpede the diusion of technologies under SREP, espe-
cially as the country is already 99 percent electried. As
one respondent put it, the marketplace in Malaysia is
not fair, fossil fuels have been cross-subsidised for de-
cades, eroding the move to go into renewables the
playing eld isnt only uneven, its an enrely dierent
game. Another argued that the explanaon behind
SREPs poor performance is that other items and dam-
ages associated with fossil fuels, such as carbon dioxide
or acid rain, are not factored into taris, Malaysians are
not paying the full cost of electricity. Such senments
have been conrmed by other studies, with one study
nong that in Malaysia there is sll massive support for
convenonal energy sources in the forms of subsidies
and export credits.24 The result is a lack of economies
of scale for renewable energy, and arcially low pric-
es for fossil fuel supply presented in Table 9.
Polical and Instuonal Obstacles
Just as signicant as technical and economic barriers,
a collecon of instuonal obstacles wreaked havoc
on the SREP. Our respondents idened no less than
seven. First is that the capacity cap of 10MW was set
too low, according to some respondents, for it ruled
out economies of scale for hydroelectric, waste, and
biomass projects. Another remarked that the 10MW
cap created a no mans land where smaller projects
had too many transacon costs such as interconnec-
on fees and negoang with TNB, but larger proj-
ects were funconally excluded. Yet another jokingly
called the SREP the small-small renewable energy
programme. The 10MW cap, one respondent told us,
meant all we could do was generate peanuts, noth-
ing more.
Second, the inial ve percent and 500MW by 2005
naonal target was set without any feasibility studies
and chosen almost randomly, without consultaon with
key stakeholders in the industry. One parcipant told
us that they didnt know where either of the numbers
came from, it surely wasnt by consulng the experts.
Third, altering the taris in 2005 was seen as pickingwinners since it only applied to biomass and palm oil
technologies, and not solar and hydro technologies. One
respondent called the low tari for solar PV odd since
that technology had the highest costs compared to all
qualied systems.
Fourth, REPPAs took too long to negoate and TNB
had the ability to stall or delay whenever they wanted
to, and the 21 year operang license was hard to meet
given that many of the fuel contracts and nancing
agreements for things like fruit bunches or waste weredone on ten and een year bases.
Fih, all SREP projects had to be approved by SCORE,
but the commiee met only twice a year, meaning if a
project missed the rst session they would have to wait
another six months to apply.
Sixth, neither SCORE nor the Malaysian Energy Commis-
sion had the authority to enforce SREP, or to reconcile
complaints about TNB, or to expedite projects. Such or-
ganisaon were also compromised and prone to con-
icts of interest since their members included TNB and
the Malaysian Palm Oil Board, but not solar and hydro
developers or consumer advocate groups. One respon-
dent went so far as to suggest that the Energy Commis-
sion really does nothing, its just a surrogate for TNB and
has their interests in mind.
Seventh, the SREP had limited oversight and poor
evaluaon, meaning problems like those above were
not caught or remedied.
Add all of these design aws up, and some projects took
ve years or longer to get completed, some develop-
ers never bothered to complete the process, and many
more never bothered to start in the rst place. Another
SourceElectricity
generaon cost
Gas and Coal Electricity 46
Hydro 112
Mini-Hydro 510
Geothermal 710
Biomass 715
Solar 2025
Table 9: Exisng levelised costs of electricity
generaon in Malaysia (including subsidies),2009 (U.S. Cents/kWh)
-
8/2/2019 #10 Malaysia
24/36
22
project developer told us that it took a terribly longme to go through the SREP processit was supposed
to be done in three months, and took us ten mes lon-
ger. Furthermore, the ten kilometre restricon to the
grid meant that many rural areas and Orang Aslicom-
munies were sll too far from the grid to qualify for a
project, and had to instead rely on inecient, expensive,
and pollung diesel generators like the one in Figure 17.
Another key instuonal problem was resistance from
TNB, the only buyer in peninsular Malaysia that renew-
able power producers could sell to. TNB had all the
bargaining power, didnt need renewable energy, and
saw the SREP as a threat to its revenue and prots. It
was a recipe for disaster, another respondent told us,
with TNB seng extremely low taris, seng perfor-
mance provisions that facilies had to deliver electricity
at precise capacity factors, levying penales for short-
falls in expected generaon, demanding half of the sav-
ings developers accrued from tax reducons, intenon-
ally delaying the approval of projects to put pressure
on developers to accept unfair provisions, and seng
unfair standby taris for backup power. All three of thesite visits we undertook revealed that project develop-
ers had asked for greater amounts of capacity but had
been denied from TNB: Kajang could generate 10MW
but was limited to exporng less than 7MW; Bukit Tagarcould do 6MW but was limited to 1MW; Bell could have
done 4MW but was limited to 1.7MW. One respondent
explained that:
TNB sees independent renewable power produc-
on as a lose-lose situaon because it displaces
their capacity, and lowers their electricity sales.
Pung them in charge of SREP was akin to let-
ng a fox manage a chicken coop, or an atheist in
charge of a church. TNB put up hurdles every way
they could.
A nal instuonal challenge related to the lack of a na-
onal, cohesive, strongly implemented policy framework
on renewable energy. As one respondent put it, SREP
was designed and implemented with no thought or rela-
onship to the various other ongoing renewable energy
programmes, there was no harmonisaon, no coordina-
on. The Ministry of Energy, for example, had to com-
pete with the Malaysian Energy Commission and TNB
over the direcon of naonal electricity policy in addi-
on to actors like the Ministry of Housing taking chargeof waste, the Ministry of Science technological develop-
ment, the Department of Environment regulaons, its
a convoluted policy landscape. Another respondent
Figure 17: A diesel generator provides electricity to the Long Wat Penan Selement in the interior of Sarawak
-
8/2/2019 #10 Malaysia
25/36
23
spoke about a mishmash between the SREP and local
policies and regulaons that would sll impede projects
even aer TNB would give approval, with hydroelectric
projects, because they deal with water, and waste proj-
ects, because they interfere with pping fees, especially
polemic. Apparently communicaon between local and
naonal governments was not good and requirements
and standards diered state by state, with Johor having
dierent requirements than Pahang which is sll dier-
ent than Selangor.
Even though SREP did not meet its targets, it oers
many lessons for energy planners and policymakers. Atthe top of the list is beer design: SREP was hobbled
from the start by capacity caps, a lengthy approval pro-
cess, lack of monitoring, exclusion of stakeholders, and
few (if any) pre-feasibility studies. Project developers
had to pay the cost of interconnecon and had to build
systems within ten kilometres of the exisng electricity
grid. Operang licenses were spulated to be 21 years
but nancing agreements and fuel contracts rarely ex-
tended beyond ten years. Electricity taris were
changed under the programme in 2001, 2006, and
2007, and targets were revised downward in the middle
of the programme. Projects supposed to take three
months to design, approve, install, and connect ended
up taking 35 years, and scores of project developers
abandoned their eorts midstream. Each of these de-
sign aws, especially the 10MW cap, arcially, and
perhaps unnecessarily, prevented an organic renewable
electricity market from taking hold.
In addion, the ecacy of SREP was eroded by fragmen-
taon and lack of cohesion with other Malaysian energy
policies, notably connued subsidies for natural gas and
oil as well as conicts with state guidelines and policies
concerning hydroelectricity, waste-to-energy, and palm
oil euent and waste. A sort of policy gap existed be-
tween the loy targets enshrined in SREP and the local
developers and ocials on the ground charged with re-
alising those targets.
Relying on the dominant state-owned electric ulity TNB
also proved to be a mistake, as was the willing seller,
willing buyer model of REPPAs. Rather than embrace re-
newable energy, evidence from our pool of respondentsstrongly suggests that TNB opposed it and used a variety
of taccs, such as interconnecon fees, costly feasibility
studies, and delays, to discourage projects. Part of this is
understandable, given that the structure of SREP meant
that small-scale renewable electricity projects traded o
with TNB revenues and prots.
Equally important, electricity taris under SREP did not
match true producon costs, were not based on sound
economics, and did not provide cost recovery for projectdevelopers. Every single project we visited highlighted
the need for extra streams of income, from CDM credits
to pping fees and recycling, in order to be nancially
viable. When taris under SREP were changed in 2006,
this was made without cosng studies and created the
percepon of picking winners of biomass and biogas.
Finally, and perhaps the most important lesson of all:
Malaysian planners could have given up aer SREP and
abandoned the idea of renewable electricity overall,
but they instead learned from its dicules are imple-
menng a progressive set of new policies, including an
ambious feed-in tari. Unlike the SREP, this new policy
framework will guarantee access to the grid by requir-
ing TNB and other ulies to accept all electricity from
private renewable electricity producers. It will stream-
line approval and sing procedures, and also set taris
based on reasonable rates of return to project vendors.
The new policy framework is seng up a single agency,
the Sustainable Energy Development Authority (SEDA),
to consult with stakeholders and then monitor and eval-uate progress. Planners in Malaysia expect total grid con-
nected renewable energy capacity to grow from 219MW
in 2011 to 4,000MW by 2030 and 21,370MW by 2050.25
Such targets have also been incorporated into the 10th
Malaysian Plan (20112015) and a Naonal Renewable
Energy Policy and Acon Plan. Though it is uncertain if
such ambious targets will be accomplished, the move is
a sign that if you dont succeed at promong renewable
energy at rst, try, try again. Ulmately, the experience
with SREP implies that planners can learn just as much
from project failures as successes.
-
8/2/2019 #10 Malaysia
26/36
24
Date Instuon LocaonNumber of
interviews
Mar 2010 Board of Naonal Economic Advisory Council Kuala Lumpur, Selangor 1
Apr 2010 Ministry of Energy, Green Technology & Water Putrajaya, Selangor 1
May 2010 United Naons Development Programme Malaysia Kuala Lumpur, Selangor 1
May 2010 Instute of Strategic & Internaonal Studies Malaysia Kuala Lumpur, Selangor 1
May 2010 Sarawak State Government Kuching, Sarawak 1
May 2010 Ministry of Natural Resources and Environment Putrajaya, Selangor 1
May 2010 Friends of the Earth Kuching, Sarawak 1
May 2010 Global Environment Facility Kuala Lumpur, Selangor 1
Jul 2010 Sarawak Hidro Sdn Bhd Kuala Lumpur, Selangor 3
Jul 2010 United Naons Development Programme Malaysia Kuala Lumpur, Selangor 5
Jul 2010 Economic Planning Unit, Prime Ministers Department Putrajaya, Selangor 2
Jul 2010 Public Private Partnership Unit, Prime Ministers Department Putrajaya, Selangor 8
Jul 2010 Corridor Development Unit, Prime Ministers Department Putrajaya, Selangor 1
Jul 2010 Regional Corridor Development Authority Putrajaya, Selangor 2
Jul 2010 Ministry of Tourism Kuala Lumpur, Selangor 1
Jul 2010 Centre for Environment, Technology, and Development Malaysia Petaling Jaya, Selangor 1
Jul 2010 OSK Research Kuala Lumpur , Selangor 1
Jul 2010 Ministry of Energy, Green Technology & Water Putrajaya, Selangor 2
Jul 2010 Sime Darby Kuala Lumpur, Selangor 2
Jul 2010 Petronas Kuala Lumpur, Selangor 3
Jul 2010 State Planning Unit, Sarawak State Government Kuching, Sarawak 1
Jul 2010 Sarawak Energy Berhad Kuching, Sarawak 4
Jul 2010 Universi Malaysia Sarawak Kuching, Sarawak 1
Jul 2010 Sarawak Rivers Board Kuching, Sarawak 2
-
8/2/2019 #10 Malaysia
27/36
25
Date Instuon LocaonNumber of
interviews
Jul 2010 Natural Resources and Environment Board Sarawak Kuching, Sarawak 2
Jul 2010 Sarawak Electricity Supply Company Kuching, Sarawak 2
Jul 2010 Alstom Hydro Bakun, Sarawak 1
Jul 2010 Sarawak Hidro Berhad Bakun, Sarawak 3
Jul 2010 Borneo Resources Instute Malaysia Kg. Mudung Abun, Sarawak 1
Jul 2010 PACOS Kg. Mudung Abun, Sarawak 1
Jul 2010 Sarawak Energy Berhad Batang Ai, Sarawak 2
Jul 2010 Sarawak Electricity Supply Company Batang Ai, Sarawak 3
Jan 2011 Eco-Ideal Consulng Sdn. Bhd. Kuala Lumpur, Selangor 1
Jan 2011 Malaysian Energy Commission Putrajaya, Selangor 2
Jan 2011 Renewable Power Sdn. Bhd. Kerling, Selangor 2
Jan 2011 Forest Research Instute Malaysia Kepong, Selangor 1
Jan 2011 Ministry of Energy Putrajaya, Selangor 3
Jan 2011 Tenaga Nasional Berhad Putrajaya, Selangor 1
Jan 2011 Malaysian Palm Oil Board Kuala Lumpur, Selangor 5
Jan 2011 Renewable Energy Research Centre (SIRIM) Kuala Lumpur, Selangor 1
Jan 2011 JD Energy Systems Shah Alam, Selangor 1
Jan 2011 Langkawi Development Authority Langkawi, Kedah 3
Jan 2011 Bell Palm Industries Sdn. Bhd. Batu Pahat, Johor 1
Feb 2011 United Naons Development Programme Bangkok, Thailand 1
Feb 2011 Kub-Berjaya Enviro Sdn. Bhd.Bukit Tagar Sanitary Landll,
Selangor1
Feb 2011 Recycle Energy Sdn. Bhd. Semenyih, Selangor 4
-
8/2/2019 #10 Malaysia
28/36
26
SCORE will adopt the following Guidelines in promong
the development of grid-connected small with regards
to power plants:
1. SREP shall apply to all types of renewable sources
of energy, including biomass, biogas, municipal
waste, solar, mini-hydro and wind.
2. Project developers will have to negoate the Re-
newable Electricity Purchase Agreement with
the relevant Ulity, including the selling price on
a willing-seller, willing buyer basis, based on take
and pay.
3. The RE electricity producer shall be given a licencefor a period of 21 years, to be eecve from the
date of commissioning of the plant.
4. RE electricity producers will be responsible for all
the costs of the grid-connecon, the relevant Ul-
ity system reinforcement (electric cables, trans-
former, switchgears and other protecon equip-
ment) and the necessary metreing installaon. The
distribuon grid interconnecon shall be made at
a voltage between 11 33 kV.
5. The small RE power plant shall be located within adistance of 10km from the nearest interconnecon
point. Excepon is given for hydro power genera-
on project.
6. No stand-by charges shall be levied. However, if
back energy is requested by project developers,
it will be charged accordingly with the prevailing
tari.
7. Power generaon through co-generaon technol-
ogy shall be given special preference.
8. Maximum capacity of a small RE power plant de-signed for sale of power to the grid shall be 10MW.
A power plant can be more than 10MW in size,
but the maximum capacity that will be allowed
for power export to the distribuon grid will be no
more than 10MW.
9. The small RE power plant must be ready for grid-
connecon within 12 months from the date of ap-
proval for such grid connecon. This is applicable
for exisng plant that wishes to connect to the
grid. However, in the case of proposals for seng
up new RE power plants (or where re-powering
is proposed) that require the installaon of new
boilers or turbo-generator systems, the plant shall
be commissioned within 24 months. The spu-
lated period of construcon unl commissioning
shall be counted from the date of signing of the
Renewable Electricity Purchase Agreement (REPA)
between the developer and the ulity.
10. The RE power plant must meet all environmental
regulaons set by the Department of Environment
(DoE), and the developer of the project is respon-
sible for obtaining the necessary approval of DoE,
and any other statutory approvals required.
11. The minimum of 30% equity in an RE power plant
project must be by Bumiputera shareholder(s). For-
eign agency / company is allowed to parcipate in
SREP project with maximum parcipaon equity of
30%.
-
8/2/2019 #10 Malaysia
29/36
27
1. Yin RK. Case study research: Design and methods. 4
ed. Newbury Park, USA: Sage Publishing; 2008.
2. Blaikie N. Designing Social Research. UK: Polity Press;
2000.
3. Wheen DA, Cameron KS. Developing Management
Skills. 8 ed. Upper Saddle River, NJ, USA: Prence Hall
Publishing; 2010.
4. Lim, Chin Haw, Elias Salleh, and Philip Jones. 2006.
Renewable Energy Policy and Iniaves in Malay-
sia. Internaonal Journal on Sustainable Tropical
Design Research and Pracce 1(1) (December), pp.
3340.
5. Oh, Tick Hui, Shen Yee Pang, and Shing Chyli Chua.
2010. Energy Policy and Alternave Energy in
Malaysia: Issues and Challenges for Sustainable
Growth, Renewable and Sustainable Energy Reviews
14, pp. 12411252.
6. Olz, Samantha and Milou Beerepoot. 2010. Deploy-
ing Renewables in Southeast Asia: Trends and Poten-
als (Paris: Internaonal Energy Agency/OECD).
7. Koh, Mok Poh and Hoi Why Kong. 2002. Renewable
Energy in Malaysia: A Policy Analysis, Energy for Sus-tainable Development6(3) (September), pp. 3139.
8. Mohamed, Abdul Rahman and Keat Teong Lee. 2006.
Energy for Sustainable Development in Malaysia:
Energy Policy and Alternave Energy, Energy Policy
34, pp. 23882397.
9. Shigeoka, Hitoshi. 2004. Overview of Internaonal
Renewable Energy Policies and Comparison with Ma-
laysias Domesc Policy(Kuala Lumpur: Pusat Tenaga
Malaysia).
10. Ibrahim, Hassan. 2002. Small Renewable EnergyPower Programme for the Promoon of Renewable
Energy Power Generaon, Presentaon to the First
Meeng of ASEM Green IPPs Network, Bangkok, Oc-
tober 2425.
11. Lim et al 2006.
12. Mohamed and Lee 2006.
13. Ibid.
14. Sovacool, BK and IM Drupady. Innovaon in the
Malaysian Waste-to-Energy Sector: Applicaons
with Global Potenal, Electricity Journal 24(5) (June,
2011), pp. 29-41.
15. Jaafar, Mohd. Zamzam, Wong Hwee Kheng, Norhaya-
Kamaruddin. 2003. Greener Energy Soluons for a
Sustainable Future: Issues and Challenges for Malay-
sia. Energy Policy31, pp. 10611072.
16. Lim Keng Yaik. Renewable Energy and Malaysia.
Presentaon to the Regional Forum on Sustainable
Energy, Marriot Hotel Putrajaya, April 11, 2005.
17. Mohamad et al. 2006.
18. Malek, Badriyah Abdul. 2010. Renewable Energy
Development in Malaysia, Presentaon to EU-Ma-
laysia Cooperaon in Green Technology, June 1.
19. Sovacool, BK. A Comparave Analysis of Renewable
Electricity Support Mechanisms for Southeast Asia,Energy35(4) (April, 2010), pp. 17791793.
20. Lee, Chung Lau, Kok Tat Tan, Keat Teong Lee, Abdul
Rahman Mohamad. 2009. A Comparave Study on
the Energy Policies in Japan and Malaysia in Fullling
Their Naons Obligaons Towards the Kyoto Proto-
col, Energy Policy37, pp. 47714778.
21. Olz and Beerepoot 2010.
22. Mustapa, Si Inda, Leong Yow Peng, and Amir
Hisham Hashim. 2010. Issues and Challenges of
Renewable Energy Development: A Malaysian Ex-perience, Presentaon to the PEA-AIT Internaonal
Conference on Energy and Sustainable Development,
Empress Hotel, Chang Mai, Thailand, June 24.
23. Oh et al. 2010: 1245, 1251.
24. Oh et al. 2010: 1251.
25. Malek 2010.
-
8/2/2019 #10 Malaysia
30/36
28
The authors are appreciave to the Centre on Asia and Globalisaon and
the Lee Kuan Yew School of Public Policy for some of the nancial assistance
needed to conduct the research interviews, eld research, and travel for this
project. The authors are also extremely grateful to the Naonal University
of Singapore for Faculty Start-up Grant 09-273 as well as the MacArthur
Foundaon for Asia Security Iniave Grant 08-92777-000-GSS, which have
supported elements of the work reported here. Any opinions, ndings, and
conclusions or recommendaons expressed in this material are those of the
authors and do not necessarily reect the views of the Centre on Asia and
Globalisaon, Lee Kuan Yew School of Public Policy, Naonal University of
Singapore, or MacArthur Foundaon. Also, the views of the author(s) ex-
pressed in this study do not necessarily reect the views of the United States
Agency for Internaonal Development or the United States Government.
-
8/2/2019 #10 Malaysia
31/36
29
Benjamin K. Sovacool is an Assistant Professor at the Lee
Kuan Yew School of Public Policy. Dr Sovacool has worked
as a researcher, professor and consultant on issues per-
taining to energy policy, the environment and science and
technology policy. He has served in advisory and research
capacies at the U.S. Naonal Science Foundaons Elec-
tric Power Networks Eciency and Security Programme, Virginia Tech Consor-
um on Energy Restructuring, Virginia Centre for Coal and Energy Research,
New York State Energy Research and Development Authority, Oak Ridge Na-
onal Laboratory, Semiconductor Materials and Equipment Internaonal,
U.S. Department of Energys Climate Change Technology Programme and the
Internaonal Instute for Applied Systems and Analysis near Vienna, Austria.
Dr Sovacool has published or edited six books, more than 100 academic ar-
cles and presented at more than 60 internaonal conferences and symposia
in the past few years. His email is [email protected]
Ira Marna Drupady is currently a research associate at the
Lee Kuan Yew School of Public Policy, where she also gradu-
ated with a Masters in Public Policy in 2010. She currently
researches energy security, rural electricaon, and energy
development and poverty. Before joining the LKY School,
she worked as a Project Assistant with the Asia-Europe
Foundaon. She can be reached at [email protected]
-
8/2/2019 #10 Malaysia
32/36
30
A worker with a fresh batch
of fruit bunches at a palm oil
plantaon in Terengganu
-
8/2/2019 #10 Malaysia
33/36
31Energy Governance Case
Studies Series
1. Lighng Laos: The governance implicaons
of the Laos rural electrificaon programme
2. Gers just want to have fun: Evaluang the
renewable energy and rural electricity
access project (REAP) in Mongolia
3. Living up to energy governance
benchmarks: The Xeketam hydropower
project in Laos
4. Seling the score: The implicaons of the
Sarawak Corridor of Renewable Energy
(SCORE) in Malaysia
5. What went wrong? Examining the Teachers
Solar Lighng Project in Papua New Guinea
6. Summoning the sun: Evaluang Chinas
Renewable Energy Development Project
(REDP)
7. Rural energy development on the Roofof the World: Lessons from microhydro
village electrificaon in Nepal
8. The radiance ofSoura Shakt: Installing two
million solar home systems in Bangladesh
9. Untapped potenal: The diffi cules of the
Small Renewable Energy Power (SREP)
Programme in Malaysia
-
8/2/2019 #10 Malaysia
34/36
32
The view from the top of the Langkawi Cable
Car in Kedah, home to a hybrid dieselsolar
power system no longer in operaon
-
8/2/2019 #10 Malaysia
35/36
33
-
8/2/2019 #10 Malaysia
36/36
The Lee Kuan Yew School of Public Policy is an autonomous,
professional graduate school of the Naonal University of
Singapore. Its mission is to help educate and train the next
generaon of Asian policymakers and leaders, with the ob-
jecve of raising the standards of governance throughout the
region, improving the lives of its people and, in so doing, con-
Strategic partners