Malaysia admits neglecting renewable energy in the last five years

Dismal interest in renewable energy resulted in only 18% of its 350MW installed capacity target achieved for 2005-2010, says the Malaysian government.

According to Dato’ Sri Peter Chin Fah Kui, minister of energy, green technology and water in Malaysia, the government introduced the fifth fuel policy in 2001 which has put RE at par among the conventional sources of energy such as coal, oil, hydro and gas as the fifth fuel for electricity generation but the purpose was not realized due to high cost of generation.

“In view of the need to diversify our energy sources, the government introduce the Fifth Fuel Policy in 2001. In the 10 year period of implementation of the policy, we found out the high cost of RE technology has translated high cost of generation which makes it unattractive for utility companies to buy renewable energy from RE generators. Our subsidy in fossil fuels adds to the problem because the utility companies will always favor the least option in dispatching the power required. Thus little concern was given to the long term benefits of using RE such as avoiding future cost to mitigate climate change,” he said.

“This has created an uneven playing field and it is reflected with the dismal achievement where, by end 2010, only 63 MW has been successfully connected to the grid which is only 18% from the 350MW target that was set for under the Ninth Malaysia Plan (2005-2010)," he added.

Now as Malaysia strives to transform its economy from a middle income to high income by 2020 however, the government according to Mr. Chin Fah Kui has now taken serious consideration on the slow development of RE in Malaysia. Also, given the fact that there is a huge RE potential in Malaysia, the government has approved the National RE Policy and Action Plan in April last year.

“Our power planning requires an estimate of 10.8 GW of new generation capacity by 2020 and at the same time about 7.GW of existing capacity will need to be retired. We foresee by 2020, the total installed capacity will be increased by 16% over the installed capacity in 2011,” the government official said.

As at the second quarter of 2011, Tenaga National Berhad, the domestic power utility in Malaysia, forecasts an increase in electricity growth of 6.5% in 2011 compared to 2010, which was driven by commercial and domestic sectors with growth of 9.2% and 7.4%, respectively.