The Kajang Waste‐to‐ Energy Facility near Kuala Lumpur in Selangor
Contents Executive Summary 2 Introduction 4 Conceptual and Research Methods 4 The Malaysian Electricity Sector 10 The Small Renewable Energy Power (SREP) Programme 12 Challenges to Implementation 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
2 The Small Renewable Energy Power (SREP) Programme was the premier policy mechanism implemented by the national government of Malaysia to promote renewable electricity facilities less than ten megawatts (MW) in capacity from 2001 to 2010. The SREP aimed to install 500MW of total renewable energy capacity by 2005, or about five percent of national 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 facilities such as the one shown in Figure 1. Malaysian planners therefore modified and extended the SREP for another five years and lowered its target to 350MW by 2010. However, by the end of December 2010 only 11 projects constituting 61.7MW of capacity had been installed. This study investigates what happened. It explores the history of the SREP in Malaysia, its drivers and benefits, and the challenges planners faced when implementing it. It finds that the SREP largely failed to meet its targets because of technical, economic, and institutional barriers. Obstacles were partly technical, dealing with actual renewable electricity power plant design and training issues; in part due to an economic worldview in Malaysia that prioritised low electricity tariffs, unattractive financing rates, and continued subsidies to fossil fuel producers; and partly institutional, involving flaws 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-feasibility studies. Its efficacy was diluted by fragmentation and lack of cohesion with other Malaysian energy policies. Relying on the dominant state-owned electric utility Tenaga Nasional Berhad proved to be a mistake, as was the “willing seller, willing buyer� model of renewable energy power purchase agreements. Electricity tariffs under SREP did not match true production costs, were not based on sound economics, and did not provide cost recovery for project developers. Rather than abandon their renewable energy efforts, Malaysian planners seem to have learned from the difficulties facing the SREP and are in the process of implementing 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 don’t succeed at promoting renewable energy at first, try, try again.
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
approach by asking five initial questions for each interview and then allowing interview subjects to elaborate in as much detail as they wanted. The five questions were:
4 The Malaysian Small Renewable Energy Power (SREP) Programme attempted to install 500MW of qualified biomass, biogas, municipal solid waste, solar photovoltaics, and mini-hydroelectric facilities by 2005, but ended up achieving only 12MW of capacity by that date. Malaysian planners altered the SREP by lowering its target to 350MW and extending it for another five 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 explores the history of the SREP in Malaysia, its drivers and benefits, and the challenges planners faced when implementing it. It then discusses what the experiences with the SREP tell us about how to design future energy projects in developing economy contexts such as Malaysia. The SREP was a central component of Malaysian energy policy, and thus it provides an ideal situation to explore the dynamics at work within national energy planning. The SREP was specifically the cornerstone of the country’s Fifth Fuel Diversification Plan and also featured prominently in the Eighth Malaysia Plan (2001 to 2005) and the Ninth Malaysia Plan (2006 to 2010). Investigating the drivers, benefits, and challenges facing SREP offers a deeper understanding of the pressures and interests related to Malaysian policymaking.
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 benefits arising from the SREP? 4. What were the significant challenges to implementation? 5. What lessons or insights does the SREP offer for the study of energy policy design and implementation more generally? The authors supplemented these five questions with “probing response techniques” when clarification or elaboration was sought and “reflecting response techniques” in order to elicit reflection when warranted.3 Because of these interviewing strategies, participants often introduced new topics into the conversation not anticipated by the authors. Interviews lasted between thirty and ninety minutes with the average time of 45 minutes. In total, 89 participants from 38 institutions from four Malaysian provinces — Sarawak, Selangor, Johor, and Kedeah — were interviewed over the course of March 2010 to February 2011. Those interviewed were selected to represent the broadest possible array of stakeholders associated with the SREP, and included members of: • Engineering and consulting firms such as the Berjaya Corporation, Renewable Energy Berhad, Recycled Energy Berhad, Core Competencies Berhad, and Eco-Ideal Consulting;
To understand the impediments facing the SREP, and to be consistent with the other case studies, the authors selected a qualitative case study methodology to gain the richest possible level of insight into the dynamics of the SREP in Malaysia. As methodological scholar Robert Yin has noted, such approaches allow researchers to attain deep knowledge about a given phenomenon and develop a highly descriptive comprehension of the subject under study.1 After conducting a preliminary literature review of documents related to the SREP to provide context, plans were made to conduct semi-structured research interviews and site visits. In designing the interview questions, the authors employed an “inductive approach” to minimise interpretative bias caused by researchers trying to force answers into preset cognitive categories.2 We implemented this
• Government and regulatory agencies such as the Malaysian Energy Commission (Suruhanjaya Tenaga), Ministry of Energy, Green Technology, and Water (Kementerian Tenaga, Teknologi Hijau dan Air), Malaysia Energy Centre (Pusat Tenaga Malaysia), and the Economic Planning Unit in the Prime Minister’s Department; • Energy companies and electric utilities, including Petronas, Sime Darby, Tenaga Nasional Berhad, Sarawak Energy Berhad, and Syarikat Sesco Berhad (formerly known as the Sarawak Electricity Supply Corporation); • Research institutes, civil society organisations, and trade organisations including the Centre for Environment, Technology, and Development Malaysia, Malaysian Palm Oil Board, and United Nations Development Programme Malaysia.
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Figure 2: Researcher Ira Martina Drupady at the Malaysian Palm Oil Board
Figure 3: Researcher Ira Martina Drupady and Dr. Benjamin K. Sovacool at the Sungai Kerling Minihydro Plant
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
Location
Connection
Directly supported by SREP / 5th Fuel Policy
Sarawak Energy Bhd.
Batang Ai, Sarawak
On-grid
No
Jul 2010
2,400MW
Ministry of Finance/Sarawak Hydro Bhd.
Bakun, Sarawak
On-grid
No
Jul 2010
944MW
Sarawak Energy Bhd.
Murum, Sarawak
On-grid
No
Jul 2010
Microhydro
25kW
Mudung Abun Community
Denang, Sarawak
Off-grid
No
Jul 2010
Long Lawen Microhydro Plant
Microhydro
10kW
Long Lawen Community
Long Lawen, Sarawak
Off-grid
No
Jul 2010
Lubok Antu Palm Oil Mill
Palm Oil
1MW
Salcra Sdn. Bhd.
Sri Aman, Sarawak
Off-grid
No
Jul 2010
Sungai Kerling Minihydro Plant
Minihydro
2MW
Renewable Power Sdn Bhd.
Kerling, Selangor
On-grid
Yes
Jan 2011
Langkawi Cable Car SolarDiesel Hybrid
Solar photovoltaics / Diesel
109.5kW
Langkawi Development Authority and Tenaga Nasional Bhd.
Pulau Langkawi, Kedah
Off-grid
Yes
Jan 2011
Hybrid Integrated Renewable Energy System
Solar / Wind / Diesel
400kW
State Government of Terengganu and Tenaga Nasional Bhd.
Pulau Perhentian, Terengganu
Off-grid
Yes
Jan 2011
TDM Palm Oil Estate
Palm Oil
1.0MW
TDM Plantation Sdn. Bhd.
Dungun, Terengganu
Off-grid
No
Jan 2011
Kajang Wasteto-Energy Plant
Waste Incineration
8.9MW
Core Competences Sdn. Bhd., Recycle Energy Sdn. Bhd.
Semenyih, Selangor
On-grid
Yes
Jan 2011
Bukit Tagar Sanitary Landfill
Landfill Gas Capture
1MW
Kub-Berjaya Enviro Sdn. Bhd.
Bukit Tagar, Selangor
On-grid
Yes
Jan 2011
Bell Palm Oil Mill
Palm Oil Mill Effluent (POME) Methane Capture and Empty Fruit Bunch Incineration
1.7MW gas capture, 10MW Combustion (under construction)
Bell Eco Power Sdn. Bhd. and Bell Palm Industries Sdn. Bhd.
Batu Pahat, Johor
On-grid
Yes
Feb 2011
Name
Type of facility
Capacity
Owner / Operator
Batang Ai Hydroelectric Station
Hydroelectric
108MW
Bakun Hydroelectric Project
Hydroelectric
Murum Hydroelectric Project
Hydroelectric
Kg. Mudung Abun Microhydro Plant
Date visited
Table 1: Summary of Malaysian renewable energy site visits
Participants were guaranteed anonymity to encourage candor, respect confidentiality, and adhere to institutional review board guidelines at the authors’ institution; however, Appendix A lists all institutions visited. Figures 2–5 depict some of these visits and interviews.
To ensure a degree of triangulation and reliability, the literature review and interviews were augmented with direct observation and site visits to thirteen renewable energy facilities in Malaysia over the course of July 2010 to February 2011, some of them shown in Figures 6–10.
7
8
Figure 6: The 2MW Kerling Minihydro Plant
Figure 7: The 8.9MW Kajang Waste-to-Energy Plant
9
Figure 8: The 1MW Bukit Tagar Landfill Gas Capture Plant
Figure 9: The 1MW Lubok Antu Palm Oil Mill
10
Figure 10: The 109.5kW solar-diesel hybrid at the upper terrace of the Langkawi Cable Car
As Table 1 summarises, these included a mix of hydroelectric, palm oil estate, landfill gas capture, waste incineration, and hybrid solar-diesel and solar-wind-diesel facilities that were both off-grid and on-grid, large and small in size, directly supported by the SREP and not supported, throughout the states of Johor, Kedah, Sarawak, Selangor, and Terengganu. The authors also attended a Renewable Energy Power Purchase Agreement (REPPA) negotiation, the Bengkel Bersama Stakeholders Bagi Penyediaan on January 27, 2011, hosted at the Marriott Hotel in Putrajaya, Malaysia.
To better understand the drivers pushing the creation of the SREP, it is necessary to briefly introduce readers to the Malaysian electricity sector. Though Table 2 shows that prominent national policies related to energy have existed since 1949, four are the most pertinent: the country’s National Energy Policy of 1979, the 1981 Four-Fuel Diversification Strategy, the Electricity Supply Act of 1990, and the Fifth Fuel Diversification Policy of 2001.
The National Energy Policy of 1979 came after the oil shocks of the 1970s, when Malaysia was heavily dependent on imported oil. It stipulated three main objectives: (1) ensure an adequate and cost effective supply, in essence maximum use of domestic resources; (2) utilise energy efficiency and conservation and eliminate wasteful consumption; (3) protect the environment, or achieve the other two objectives without degrading Malaysia’s rich ecological and social heritage. The Four Fuel Diversification Strategy of 1981 explicitly promoted hydroelectricity, natural gas, and coal as an alternative to oil, and dropped national 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 privatisation of the electricity sector and enabled independent power producers to enter the wholesale electricity generation market. After a major blackout in 1993 followed by rolling brownouts in 1995, the government began planning its Fifth Fuel Diversification Policy of 2001 intended to promote other forms of renewable energy. These measures—especially privatisation and the fuel diversification policies—have seen oil’s share of national energy supply drop precipitously since the 1980s and the rise of
Date
Event
Description
1949
Central Electricity Board formed
Central Electricity Board (CEB) created by the government for electricity generation, transmission, and distribution in Malaysia.
1965
National Electricity Board formed
CEB is renamed to the National 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
National Petroleum Policy
Sets regulations for the oil and natural gas industries to ensure economic development needs are met.
1979
National Energy Policy
Sets the three objectives of supply, utilisation, and the environment.
1980
National Depletion Policy
National Petroleum Policy is augmented to extend the life of domestic energy reserves and lower reserve to production ratios.
1981
Four-Fuel Diversification 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 utility Tenaga Nasional Berhad to be peninsular Malaysia’s national electricity provider, created by privatising and corporatising the NEB.
1999
Pusat Tenaga Malaysia formed
Pusat Tenaga Malaysia (PTM) created to promote energy efficiency and renewable energy.
1999
Five-Fuel Diversification Strategy
Renewable sources of energy recognised as the fifth primary fuel in national energy supply.
2001
Small Renewable Energy Programme launched
Small Renewable Energy Power (SREP) Programme created to achieve five 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 matters
Table 2: Timeline of major energy policy events in Malaysia, 1949 to 2010
Figure 11: Fuel mix for Malaysian electricity generation, 1995 to 2010 (%)
11
12
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 energy potential for Malaysia (MW)
coal and hydroelectricity in the nation’s electricity mix, depicted in Figure 11. Notwithstanding reliance on fossil fuels to meet most national energy and electricity demand, Malaysia is blessed with abundant renewable resources. One study estimates no less than 30,700MW of renewable energy potential shown in Table 3, when in 2009 existing installed capacity was less than 23,000MW.5 Similarly, the International Energy Agency projected that realisable potential for renewables in Malaysia was about 130 Terrawatt-hours (TWh) per year by 2030, but that in 2006 the country generated only 101.3TWh. Both estimates imply that Malaysia could possibly be completely powered by renewable resources.6
Malaysian planners seem cognisant of this potential, 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 proceed with the SREP as follows: ÎÎ We had the four fuel policy operating for many years, and it was basically successful at promoting large hydro and a collection of natural gas and coal-fired power plants. But we saw the need to promote other types of renewable energy. Though we had some diesel power plants, these were inefficient, costly, and polluting. Most of the large hydro potential had either already been tapped, or were in places like Sabah and Sarawak, hundreds
of kilometres away from major urban centres. Increased reliance on coal was thought to be too environmentally damaging, and was sometimes opposed by local communities. Natural gas was already an uncomfortably large share of the national electricity portfolio. Renewables were seen as the only viable alternative. The Malaysian government also recognised that a collection of pernicious barriers prevented the wider adoption of renewable energy in the late 1990s and early 2000s. These included lack of a national policy in support of renewable energy, the perception that waste-to-energy and palm oil technologies were polluting, inability to cover project costs and lack of financing, and poor coordination among different national players and ministries. One study went so far as to argue that renewable energy was looked upon as a “primitive 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 Perspective Plan. Eligible technologies for the SREP were limited to biomass, biogas, municipal solid waste, solar photovoltaics, and mini-hydroelectric facilities. The Ministry established a Special Committee on Renewable Energy (SCORE) to oversee the programme and permitted projects up to 10MW of installed capacity. These projects could sell to two of the three major utilities in Malaysia: Tenaga Nasional Berhad (TNB) in peninsular Malaysia or Sabah Electricity Sendirian Berhad (SESB) in Borneo. Project developers had to negotiate a REPPA with the relevant utility according to a “willing buyer, willing seller model” and were granted a license for 21 years after the commissioning of a plant. Renewable energy project developers were responsible for the costs of grid connection and utility system reinforcement including cables, transformers, switchgears, protection equipment, and metres, and were required to distribute electricity into the network between 11 to 33 kV. Facilities had to be within ten kilometres of the nearest interconnection point to the grid, and all facilities had to meet regulations set by the Department of Environment. Lastly, a minimum 30 percent equity had to be held in all projects by Bumiputera (“indigenous Malaysian”) stakeholders, and foreign companies were allowed to participate only with a maximum equity of 30 percent. Project developers also had to go through a somewhat cumbersome and complicated process involving an “application for approval” followed by an “application for license” depicted in Figures 12 and 13. Ancillary support mecha-
13
Figure 12: SREP Approval application process flowchart
14
Figure 13: SREP License application process flowchart
Quantity (kton/yr)
Potential Generation (GWh)
Potential Capacity (MW)
424
263
30
Wood Industry
2,177
598
68
Palm Oil Mills
17,980
3,197
365
300
218
25
31,500
1,587
177
72,962
5,863
665
Sources
Rice Mills
Bagasse Palm Oil Mill Effluent (POME) Total
Table 4: Biomass electricity potential in Malaysia
nisms, such as Pioneer Status or Income Tax Allowance and tax exemption on equipment, were implemented in tandem with the SREP. Appendix B provides the full list of project criteria. At the time the SREP was launched, it was believed that accomplishing a five percent share of renewable electricity supply by 2005, or a total of 500 megawatts (MW)—the stated goal of the Eighth Malaysian Plan— would save the country about US$2 billion over those five years.8 Respondents told us that the SREP was designed to accomplish multiple goals. First, it was seen as a way to tap the waste energy potential from the palm oil industry, one of the largest agricultural sectors in the country. One participant 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 effluent each year.” Indeed, at the price of only US$30 per barrel of oil, one study estimated the value of palm oil waste at more than US$200 billion.9 Given that the price of oil is three times 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, figures presented in Table 4.10 Another study assessed a whopping 2,400MW of potential,11 and yet another 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 innovation and technological learning in alternatives Malaysia had little experience with, such as waste incin-
eration, 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 energy potential was cited as “extremely favorable” with 6.0 to 6.5kWh of potential energy per square metre, given Malaysia’s location on the equator.13 Third, the SREP was seen as a mechanism to also help achieve the country’s remaining electrification goals. While more than 99 percent of the country’s population has access to the existing grid, about 150,000 to 200,000 homes, mostly in the poorest and most rural parts of Malaysia, still rely on diesel generators or receive no modern energy services at all. The SREP programme was partly hoped to “develop smaller scale systems, especially minihydro and solar, which would reach hard-to-access populations.” Another respondent commented that “hydro and solar provide a convenient and cost-effective 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 off-grid, and SREP was believed to help develop suitable off-grid and micro-grid technologies.” Fourth and finally, SREP was conceived as a way to reduce Malaysia’s greenhouse gas emissions and environmental pollution, especially from the palm oil industry. Every single ton of palm oil creates six tons of palm fronds, five tons of empty fruit bunches (EFB), one ton of palm trunks, one ton of mesocarp fiber, 750 kilograms of palm kernel cake and endocarp, and a staggering 100 tons of palm oil mill effluent (POME). Before it is discharged, POME is usually collected in open ponds or storage takes to degrade, a practice that produces voluminous amounts of greenhouse gas emissions, as every ton creates 28 cubic metres of methane.14 Taken together, such emissions from the palm oil industry account for roughly 12 percent of national greenhouse gas emissions, and converts “what is in essence a fugitive emission into a source of electricity that was seen as attractive.” Despite these reasons in favor of renewable energy, however, implementation did not proceed as planned. In 2003 a study noted that major obstacles remained in Malaysia two years after SREP had started, including lack of economies of scale, poor perception of commercial viability for projects, and higher risk premiums for financing.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 time: ÎÎ The SREP … has not been able to connect the envisaged 500MW of electricity generated from renew-
15
16
able sources to the national grid. What it has been able to deliver in the last four years is 12MW from two projects. The wide gap between policy and implementation clearly indicates that there are barriers to the effective transition from a conventional to a sustainable model of energy development.16 The Minister’s comments were confirmed by an independent study which noted that the development of renewable energy technology was not sufficiently developed in Malaysia.17 Costs of production were still higher than many other countries at 7–25 U.S. cents/ kWh, compared to conventional electricity costs of 4–6 U.S. cents/kWh. Lack of information on renewable energy was referenced as a major barrier, palm oil facilities were still not converting their waste to electricity, and weak public awareness about the benefits of renewable energy was widespread. Because of these problems, Malaysian planners extended the SREP for another five years but scaled down its targets to 350MW: 300MW in peninsular Malaysia, and 50MW for Sabah in Borneo. When, yet again, implementation lagged far behind targets, the SREP was revised at the end of 2006 to increase tariffs from 17 Malaysian sens/kWh to 19 sens/kWh and later 21 sens/kWh, though
Project Developer
Renewable electricity price
Biomass Biogas
17 sen / kWh (2001)
X
X
19 sen / kWh (2006)
X
X
21 sen / kWh (2007)
Minihydro
Solar Photovoltaics (PV)
X
X
X
X
Table 5: Revised tariffs under the SREP, 2001 to 2009 this was only for biomass and biogas technologies, not mini-hydro and solar system, as shown in Table 5. Even the revised tariffs, nonetheless, did not significantly accelerate participation in the programme. At the end of 2010, Table 6 shows that only 61.7MW of renewable energy capacity had been connected to the grid from 11 projects. Of these projects, roughly 80 percent were related to waste and palm oil. As Table 7 illustrates, an additional 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 incentives, was 217MW,18 less than a one percent share for the country.
Project Location
Capacity (MW)
Fuel Source
TSH Bioenergy Sdn. Bhd.
Tawau, Sabah
10
Empty 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 Selangor
5.5
Municipal waste
MHES Asia Sdn. Bhd.
HS(D) 12572, Lot PT No. 3226, Mukim Serting, Negeri Sembilan
10
EFB
AMDB Perting Hydro Sdn Bhd
Sg. Perting, 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 Landfill Sdn. Bhd.
Puchong, Selangor
2
Biogas
Table 6: Licensed and operational SREP projects (as of February, 2011)
Category
Number of projects
Capacity
Mini-Hydro
9
50.8MW
Biomass
14
140MW
Biogas
10
20.05MW
Total
33
210.85MW
Table 7: SREP projects under construction and approved (but not yet licensed or operational)
For all intents and purposes, the SREP was suboptimal. As one respondent told us: ÎÎ The SREP is not a success. From 2001 to 2008, most of the duration of the programme, 50 projects were approved for a capacity of 288MW, but 40 percent were cancelled, and one-quarter were issued with licenses but never started operating. One-third were not issued with licenses, and only 13MW was built for the first eight years of the programme.
17
Why, then, did the SREP fail to meet its targets, catalyze the growth of the renewable energy industry, and overcome the barriers it was intended to prevail against? This section explains the challenges facing SREP implementation. 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 tariffs, unattractive financing rates, and continued subsidies to fossil fuel producers; and partly institutional, involving flaws in programme design, resistance, and regulatory failures. Table 8 provides an overview of these barriers. Technical Obstacles One major technical obstacle involved developing renewable electricity systems that would work in a Malaysian context. One respondent noted that the palm oil industry, for instance, had “no experience with advanced boiler technology and no understanding of bio-
Dimension
Another participant calculated that “about two-thirds of the projects proposed under SREP never progressed” and that “even today, the major players are not getting into the renewable energy business … they just don’t want to get involved.” Still 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 Malaysia and finding that regulators and investors “commonly see renewable energy as immature, exotic, unproven, and risky.”19 Another argued that “utilisation of renewable energy [in Malaysia] is still very low.”20 The International Energy Agency documented that a lack of standard codes and certification, inadequate training, and mistrust among financiers and investors still remained in Malaysia.21 Another study analogously argued that limited local experience, improperly designed regulations, and lack of awareness were impeding the diffusion of renewable energy.22 Yet another study concluded in their assessment that “renewable energy in Malaysia is still being generated on a small-scale basis [even though] Malaysia is blessed with abundant resources … The progress in bringing renewable energy generation into the mainstream has been slow.”23
Explanation Lack of technology such as boilers that could combust empty fruit bunches and experience with digesters.
Technical
Insufficient education, training, and sharing of experience among all stakeholders (e.g. planners, developers, electric utilities, research institutes, financial institutions) Expensive feasibility studies and high grid interconnection costs. Low electricity tariffs for renewable power producers.
Economic
Unfamiliarity and resistance of financiers and bankers. Subsidies to fossil fuels and the failure to include the cost of externalities in electricity prices. Flaws in programme design including capacity caps, long lead times for project approval, and no authority given to programme managers over enforcement.
Institutional
Disinterest and occasional hostility from national utilities and convoluted Renewable Energy Power Purchase Agreements (REPPAs). Lack of adequate and strongly implemented national policy frameworks.
Table 8: Summary of challenges facing the SREP in Malaysia
18
Figure 14: The digester tanks of the 1.7MW Bell Palm Oil Facility
gas technology, meaning engineers encountered numerous problems related to how to combust empty fruit bunches or gasify palm oil effluent.” Thus, “biomass projects had to proceed with a lot of costly trial and error.” Small hydroelectric projects had trouble “because of the great fluctuation in water supply between the wet and dry seasons, and were also location dependent, given the ten kilometre restriction set by TNB.” Most of the Malaysian landfills “were not designed or well suited to capture methane gas,” and “the country had practically 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 landfill gas capture power plant we visited, took “years” to design and involved geo-synthetic clay liners, high design polyethylene blankets, water treatment facilities, anaerobic closing ponds, gas extraction wells, pumps, blowers, flame arresters, and flare stacks. The Kajang waste incineration plant we visited had to specially design a refuse derived fuel cycle that involved magnetically sorting waste, drying and shredding, splitting and recycling non-combustible items, digesting organic waste, combusting the remaining material, and treating effluent. One official at the Bell Palm Oil biogas
facility we visited shown in Figure 14 called designing the digester system as “a nightmare,” and also mentioned how devastating palm oil plantations could be to the local environment if managed improperly. As one respondent summed it up, “when the SREP kicked off, 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 insufficient education, training, and quality assurance. While it is clear that all stakeholders are making their own efforts to build their capacity in renewable energy, one respondent noted that “there was no centralised training institution, no place to learn about how to innovate technology, instead we had to do our research on an ad hoc basis.” Another respondent mentioned that although his institute undertakes research in solar, biogas, waste and other renewable energy technologies, their findings have contributed little toward the SREP. It is therefore not surprising that there is a seeming imbalance when it comes to stakeholder capacity, with some real innovations happening in some places but not others. Such lack of capacity became apparent during two of the site visits we conducted to TNB renewable energy demonstration plants. We showed up at the first, a hy-
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Figure 15: The inoperable solar-diesel hybrid system at the Langkawi Cable Car in Kedah, Malaysia
brid system at the Langkawi Cable consisting of 16kWp of solar panels and two 50kW diesel generators shown in Figure 15, only to find 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 circuited the system, we can’t get spare parts and wouldn’t even know what to do with them if we did.” The second, a TNB solar-wind hybrid project on Pulau Perhentian in Terengganu, was no longer operational due to “lack of maintenance skills” and “interest” from its operators. As one local community member told us, “that system hasn’t been working for years even though it’s still featured on the TNB website, it’s just decoration now, it’s been long abandoned.” Even at one of the operational 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-time 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 substandard projects passing the approval stage that never should have.” The reason is that “planners didn’t really have the expertise to approve a project, but they did anyways because they wanted to be seen as cooperating with the new SREP.” Clearly, the lack of a strong capac-
ity building component within the SREP is a missed opportunity for stakeholders to build expertise, share their experiences, and propagate best practices. A final technical obstacle relates to onerous interconnection and feasibility requirements stipulated by TNB. One project developer exclaimed that “we were forever at the mercy of TNB to say which substation 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 estimated that such complications accounted to a staggering 20 percent of the total project cost (though other project managers told us interconnection costs amounted to only 2–5 percent of total costs). Another remarked that “it’s hard connecting to TNB’s grid, there is the legitimate concern that our distribution system could damage their network, but they also set very stringent protection requirements that really complicated the technical efficiency of our project.” Economic and Financial Obstacles In the economic realm, insufficient tariffs for renewable electricity providers “hobbled” project developers. One respondent noted that “the tariffs paid to SREP developers were not based on sound economic principles, they were set with no consideration of ac-
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Figure 16: Land in Perak is cleared to make way for the expansion of palm oil mills
tual cost recovery.” The original tariff of 17/sen per kWh was “shockingly low, far below even the actual cost of operating SREP facilities.” In the case of the Bukit Tagar sanitary landfill, 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 landfill 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 tariffs pay only enough to cover operation 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 concurred, and noted that “without CDM, projects would never make it—SREP is insufficient.” At another facility, respondents argued that “the tariff is too low, we don’t even get enough to cover operations, we need extra income from tipping fees, recycling, and making plastic resin onsite.” For solar projects, respondents mentioned that at least RM 1.70 per kWh would be needed to make projects viable, “more than seven times the rate currently offered by TNB.” As another respondent noted, “the SREP rate is way too low for such projects to be commercially viable.”
Because the tariff was so low, respondents noted that many project developers could make more money doing “other things” with renewable fuels. Palm oil millers, for example, can use wastes and residues to generate grid electricity, or as a component of mattresses and chipboards, for use in the paper and pulp industry, to make animal feed, or to manufacture compost fertiliser. “SREP is just another option for mills,” one respondent told us, “but it’s not a key factor, something extra, sometimes a nuisance, sometimes worth doing.” Managers also spend much of their time focusing on acquiring land for the expansion of palm oil mills shown in Figure 16, rather than generating electricity. Landfill gas, similarly, can be used to generate electricity, or when upgraded and “sweetened” used for a variety of other applications including heating, cooking, and a transport fuel. A separate economic obstacle dealt with lack of financing and the unfamiliarity of Malaysian banks with renewable electricity projects. One respondent noted that “when SREP started, local banks were unwilling and unready to give financing. Project developers usually had to go abroad to Chinese and Japanese financiers.” Another commented that “bank managers had
no idea about renewable energy, it’s hard for them to visualise what a landfill gas capture or municipal solid waste plant looks like.” Lastly, subsidies to natural gas and oil, along with energy prices that do not reflect full costs result in an oversupply of electricity generated from fossil fuel sources and impede the diffusion of technologies under SREP, especially as the country is already 99 percent electrified. As one respondent put it, “the marketplace in Malaysia is not fair, fossil fuels have been cross-subsidised for decades, eroding the motive to go into renewables … the playing field isn’t only uneven, it’s an entirely different game.” Another argued that the explanation behind SREP’s poor performance is that “other items and damages associated with fossil fuels, such as carbon dioxide or acid rain, are not factored into tariffs, Malaysians are not paying the full cost of electricity.” Such sentiments have been confirmed by other studies, with one study noting that in Malaysia “there is still massive support for conventional energy sources in the forms of subsidies and export credits.”24 The result is a “lack of economies of scale for renewable energy,” and “artificially low prices” for fossil fuel supply presented in Table 9.
Source
Electricity generation cost
Gas and Coal Electricity
4–6
Hydro
1–12
Mini-Hydro
5–10
Geothermal
7–10
Biomass
7–15
Solar
20–25
Table 9: Existing levelised costs of electricity generation in Malaysia (including subsidies), 2009 (U.S. Cents/kWh) Political and Institutional Obstacles Just as significant as technical and economic barriers, a collection of institutional obstacles “wreaked havoc” on the SREP. Our respondents identified 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 man’s land” where “smaller projects had too many transaction costs such as interconnection fees and negotiating with TNB, but larger projects were functionally 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, nothing more.” Second, the initial five percent and 500MW by 2005 national target was set “without any feasibility studies” and “chosen almost randomly, without consultation with key stakeholders in the industry.” One participant told us that they “didn’t know where either of the numbers came from, it surely wasn’t by consulting the experts.” Third, altering the tariffs in 2005 was seen as “picking winners” since it only applied to biomass and palm oil technologies, and not solar and hydro technologies. One respondent called the low tariff for solar PV “odd” since that technology had the highest costs compared to all qualified systems. Fourth, REPPAs took “too long to negotiate” and “TNB had the ability to stall or delay whenever they wanted to,” and the 21 year operating license was “hard to meet given that many of the fuel contracts and financing agreements for things like fruit bunches or waste were done on ten and fifteen year bases.” Fifth, all SREP projects had to be approved by SCORE, but the committee met only twice a year, meaning if a project missed the first session they would have to wait another six months to apply. Sixth, neither SCORE nor the Malaysian Energy Commission “had the authority to enforce SREP, or to reconcile complaints about TNB, or to expedite projects.” Such organisation were also “compromised” and prone to “conflicts of interest” since their members included TNB and the Malaysian Palm Oil Board, but not solar and hydro developers or consumer advocate groups. One respondent went so far as to suggest that “the Energy Commission really does nothing, it’s just a surrogate for TNB and has their interests in mind.” Seventh, the SREP had “limited oversight” and “poor evaluation,” meaning problems like those above were “not caught or remedied.” Add all of these design flaws up, and some projects took “five years or longer” to get completed, “some developers never bothered to complete the process,” and “many more never bothered to start in the first place.” Another
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Figure 17: A diesel generator provides electricity to the Long Wat Penan Settlement in the interior of Sarawak
project developer told us that “it took a terribly long time to go through the SREP process—it was supposed to be done in three months, and took us ten times longer.” Furthermore, the ten kilometre restriction to the grid meant that many rural areas and Orang Asli communities were still too far from the grid to qualify for a project, and had to instead rely on inefficient, expensive, and polluting diesel generators like the one in Figure 17. Another key institutional problem was resistance from TNB, the only buyer in peninsular Malaysia that renewable power producers could sell to. TNB had “all the bargaining power,” “didn’t need renewable energy,” and “saw the SREP as a threat to its revenue and profits.” “It was a recipe for disaster,” another respondent told us, “with TNB setting extremely low tariffs, setting performance provisions that facilities had to deliver electricity at precise capacity factors, levying penalties for shortfalls in expected generation, demanding half of the savings developers accrued from tax reductions, intentionally delaying the approval of projects to put pressure on developers to accept unfair provisions, and setting unfair standby tariffs for backup power.” All three of the site visits we undertook revealed that project developers had asked for greater amounts of capacity but had been denied from TNB: Kajang could generate 10MW
but was limited to exporting less than 7MW; Bukit Tagar could do 6MW but was limited to 1MW; Bell could have done 4MW but was limited to 1.7MW. One respondent explained that: ÎÎ TNB sees independent renewable power production as a lose-lose situation because it displaces their capacity, and lowers their electricity sales. Putting them in charge of SREP was akin to letting a fox manage a chicken coop, or an atheist in charge of a church. TNB put up hurdles every way they could. A final institutional challenge related to the lack of a national, cohesive, strongly implemented policy framework on renewable energy. As one respondent put it, “SREP was designed and implemented with no thought or relationship to the various other ongoing renewable energy programmes, there was no harmonisation, no coordination.” The Ministry of Energy, for example, had to “compete” with the Malaysian Energy Commission and TNB over the “direction of national electricity policy” in addition to “actors like the Ministry of Housing taking charge of waste, the Ministry of Science technological development, the Department of Environment regulations, it’s a convoluted policy landscape.” Another respondent
spoke about a “mishmash between the SREP and local policies and regulations that would still impede projects even after TNB would give approval, with hydroelectric projects, because they deal with water, and waste projects, because they interfere with tipping fees, especially polemic.” Apparently communication between local and national governments was “not good” and requirements and standards “differed state by state, with Johor having different requirements than Pahang which is still different than Selangor.”
Even though SREP did not meet its targets, it offers many lessons for energy planners and policymakers. At the top of the list is better design: SREP was “hobbled” from the start by capacity caps, a lengthy approval process, lack of monitoring, exclusion of stakeholders, and few (if any) pre-feasibility studies. Project developers had to pay the cost of interconnection and had to build systems within ten kilometres of the existing electricity grid. Operating licenses were stipulated to be 21 years but financing agreements and fuel contracts rarely extended beyond ten years. Electricity tariffs 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 3–5 years, and scores of project developers abandoned their efforts midstream. Each of these design flaws, especially the 10MW cap, artificially, and perhaps unnecessarily, prevented an organic renewable electricity market from taking hold. In addition, the efficacy of SREP was eroded by fragmentation and lack of cohesion with other Malaysian energy policies, notably continued subsidies for natural gas and oil as well as conflicts with state guidelines and policies concerning hydroelectricity, waste-to-energy, and palm oil effluent and waste. A sort of policy gap existed between the lofty targets enshrined in SREP and the local developers and officials on the ground charged with realising those targets. Relying on the dominant state-owned electric utility TNB also proved to be a mistake, as was the “willing seller, willing buyer” model of REPPAs. Rather than embrace renewable energy, evidence from our pool of respondents strongly suggests that TNB opposed it and used a variety of tactics, such as interconnection 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 off with TNB revenues and profits. Equally important, electricity tariffs under SREP did not match true production costs, were not based on sound economics, and did not provide cost recovery for project developers. Every single project we visited highlighted the need for extra streams of income, from CDM credits to tipping fees and recycling, in order to be financially viable. When tariffs under SREP were changed in 2006, this was made without costing studies and created the perception of “picking winners” of biomass and biogas. Finally, and perhaps the most important lesson of all: Malaysian planners could have given up after SREP and abandoned the idea of renewable electricity overall, but they instead learned from its difficulties are implementing a progressive set of new policies, including an ambitious feed-in tariff. Unlike the SREP, this new policy framework will guarantee access to the grid by requiring TNB and other utilities to accept all electricity from private renewable electricity producers. It will streamline approval and sitting procedures, and also set tariffs based on reasonable rates of return to project vendors. The new policy framework is setting up a single agency, the Sustainable Energy Development Authority (SEDA), to consult with stakeholders and then monitor and evaluate progress. Planners in Malaysia expect total grid connected 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 (2011–2015) and a National Renewable Energy Policy and Action Plan. Though it is uncertain if such ambitious targets will be accomplished, the move is a sign that if you don’t succeed at promoting renewable energy at first, try, try again. Ultimately, the experience with SREP implies that planners can learn just as much from project failures as successes.
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Date
Institution
Location
Number of interviews
Mar 2010
Board of National Economic Advisory Council
Kuala Lumpur, Selangor
1
Apr 2010
Ministry of Energy, Green Technology & Water
Putrajaya, Selangor
1
May 2010
United Nations Development Programme Malaysia
Kuala Lumpur, Selangor
1
May 2010
Institute of Strategic & International 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 Nations Development Programme Malaysia
Kuala Lumpur, Selangor
5
Jul 2010
Economic Planning Unit, Prime Minister’s Department
Putrajaya, Selangor
2
Jul 2010
Public Private Partnership Unit, Prime Minister’s Department
Putrajaya, Selangor
8
Jul 2010
Corridor Development Unit, Prime Minister’s 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
Universiti Malaysia Sarawak
Kuching, Sarawak
1
Jul 2010
Sarawak Rivers Board
Kuching, Sarawak
2
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Date
Institution
Location
Number 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 Institute 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 Consulting 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 Institute 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 Nations Development Programme
Bangkok, Thailand
1
Feb 2011
Kub-Berjaya Enviro Sdn. Bhd.
Bukit Tagar Sanitary Landfill, Selangor
1
Feb 2011
Recycle Energy Sdn. Bhd.
Semenyih, Selangor
4
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SCORE will adopt the following Guidelines in promoting 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 negotiate the Renewable Electricity Purchase Agreement with the relevant Utility, 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 licence for a period of 21 years, to be effective from the date of commissioning of the plant. 4. RE electricity producers will be responsible for all the costs of the grid-connection, the relevant Utility system reinforcement (electric cables, transformer, switchgears and other protection equipment) and the necessary metreing installation. The distribution grid interconnection shall be made at a voltage between 11 – 33 kV. 5. The small RE power plant shall be located within a distance of 10km from the nearest interconnection point. Exception is given for hydro power generation 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 tariff. 7. Power generation through co-generation technology shall be given special preference. 8. Maximum capacity of a small RE power plant designed 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 distribution grid will be no more than 10MW. 9. The small RE power plant must be ready for gridconnection within 12 months from the date of approval for such grid connection. This is applicable for existing plant that wishes to connect to the grid. However, in the case of proposals for setting up new RE power plants (or where “re-powering� is proposed) that require the installation of new boilers or turbo-generator systems, the plant shall
be commissioned within 24 months. The stipulated period of construction until commissioning shall be counted from the date of signing of the Renewable Electricity Purchase Agreement (REPA) between the developer and the utility. 10. The RE power plant must meet all environmental regulations set by the Department of Environment (DoE), and the developer of the project is responsible 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). Foreign agency / company is allowed to participate in SREP project with maximum participation equity of 30%.
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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. Whetten DA, Cameron KS. Developing Management Skills. 8 ed. Upper Saddle River, NJ, USA: Prentice Hall Publishing; 2010. 4. Lim, Chin Haw, Elias Salleh, and Philip Jones. 2006. “Renewable Energy Policy and Initiatives in Malaysia.” International Journal on Sustainable Tropical Design Research and Practice 1(1) (December), pp. 33–40. 5. Oh, Tick Hui, Shen Yee Pang, and Shing Chyli Chua. 2010. “Energy Policy and Alternative Energy in Malaysia: Issues and Challenges for Sustainable Growth,” Renewable and Sustainable Energy Reviews 14, pp. 1241–1252. 6. Olz, Samantha and Milou Beerepoot. 2010. Deploying Renewables in Southeast Asia: Trends and Potentials (Paris: International Energy Agency/OECD). 7. Koh, Mok Poh and Hoi Why Kong. 2002. “Renewable Energy in Malaysia: A Policy Analysis,” Energy for Sustainable Development 6(3) (September), pp. 31–39. 8. Mohamed, Abdul Rahman and Keat Teong Lee. 2006. “Energy for Sustainable Development in Malaysia: Energy Policy and Alternative Energy,” Energy Policy 34, pp. 2388–2397. 9. Shigeoka, Hitoshi. 2004. Overview of International Renewable Energy Policies and Comparison with Malaysia’s Domestic Policy (Kuala Lumpur: Pusat Tenaga Malaysia). 10. Ibrahim, Hassan. 2002. “Small Renewable Energy Power Programme for the Promotion of Renewable Energy Power Generation,” Presentation to the First Meeting of ASEM Green IPPs Network, Bangkok, October 24–25. 11. Lim et al 2006. 12. Mohamed and Lee 2006. 13. Ibid. 14. Sovacool, BK and IM Drupady. “Innovation in the Malaysian Waste-to-Energy Sector: Applications with Global Potential,” Electricity Journal 24(5) (June, 2011), pp. 29-41. 15. Jaafar, Mohd. Zamzam, Wong Hwee Kheng, Norhaya-
ti Kamaruddin. 2003. “Greener Energy Solutions for a Sustainable Future: Issues and Challenges for Malaysia.” Energy Policy 31, pp. 1061–1072. 16. Lim Keng Yaik. “Renewable Energy and Malaysia.” Presentation 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,” Presentation to EU-Malaysia Cooperation in Green Technology, June 1. 19. Sovacool, BK. “A Comparative Analysis of Renewable Electricity Support Mechanisms for Southeast Asia,” Energy 35(4) (April, 2010), pp. 1779–1793. 20. Lee, Chung Lau, Kok Tat Tan, Keat Teong Lee, Abdul Rahman Mohamad. 2009. “A Comparative Study on the Energy Policies in Japan and Malaysia in Fulfilling Their Nations’ Obligations Towards the Kyoto Protocol,” Energy Policy 37, pp. 4771–4778. 21. Olz and Beerepoot 2010. 22. Mustapa, Siti Indati, Leong Yow Peng, and Amir Hisham Hashim. 2010. “Issues and Challenges of Renewable Energy Development: A Malaysian Experience,” Presentation to the PEA-AIT International Conference on Energy and Sustainable Development, Empress Hotel, Chang Mai, Thailand, June 2–4. 23. Oh et al. 2010: 1245, 1251. 24. Oh et al. 2010: 1251. 25. Malek 2010.
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The authors are appreciative to the Centre on Asia and Globalisation and the Lee Kuan Yew School of Public Policy for some of the financial assistance needed to conduct the research interviews, field research, and travel for this project. The authors are also extremely grateful to the National University of Singapore for Faculty Start-up Grant 09-273 as well as the MacArthur Foundation for Asia Security Initiative Grant 08-92777-000-GSS, which have supported elements of the work reported here. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National University of Singapore, or MacArthur Foundation. Also, the views of the author(s) expressed in this study do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
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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 pertaining to energy policy, the environment and science and technology policy. He has served in advisory and research capacities at the U.S. National Science Foundation’s Electric Power Networks Efficiency and Security Programme, Virginia Tech Consortium on Energy Restructuring, Virginia Centre for Coal and Energy Research, New York State Energy Research and Development Authority, Oak Ridge National Laboratory, Semiconductor Materials and Equipment International, U.S. Department of Energy’s Climate Change Technology Programme and the International Institute for Applied Systems and Analysis near Vienna, Austria. Dr Sovacool has published or edited six books, more than 100 academic articles and presented at more than 60 international conferences and symposia in the past few years. His email is bsovacool@nus.edu.sg Ira Martina Drupady is currently a research associate at the Lee Kuan Yew School of Public Policy, where she also graduated with a Masters in Public Policy in 2010. She currently researches energy security, rural electrification, and energy development and poverty. Before joining the LKY School, she worked as a Project Assistant with the Asia-Europe Foundation. She can be reached at iramartina@nus.edu.sg
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A worker with a fresh batch of fruit bunches at a palm oil plantation in Terengganu
Energy Governance Case Studies Series 1. Lighting Laos: The governance implications of the Laos rural electrification programme 2. Gers just want to have fun: Evaluating 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. Settling the score: The implications of the Sarawak Corridor of Renewable Energy (SCORE) in Malaysia 5. What went wrong? Examining the Teacher’s Solar Lighting Project in Papua New Guinea 6. Summoning the sun: Evaluating China’s Renewable Energy Development Project (REDP) 7. Rural energy development on the “Roof of the World”: Lessons from microhydro village electrification in Nepal 8. The radiance of Soura Shakti: Installing two million solar home systems in Bangladesh 9. Untapped potential: The difficulties of the Small Renewable Energy Power (SREP) Programme in Malaysia
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The view from the top of the Langkawi Cable Car in Kedah, home to a hybrid diesel�solar power system no longer in operation
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Strategic partners
The Lee Kuan Yew School of Public Policy is an autonomous, professional graduate school of the National University of Singapore. Its mission is to help educate and train the next generation of Asian policymakers and leaders, with the objective of raising the standards of governance throughout the region, improving the lives of its people and, in so doing, contribute to the transformation of Asia. For more details on the LKY School, please visit www.lkyspp.nus.edu.sg