Malaysia on Renewable Energy and

Energy Efficiency
Roadmap and Incentives

RENUKA RADAKRISHNAN

Penang Green Council

23rd April 2022
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 Per Capita Electricity Consumption in Malaysia Continues To Increase
aysia – Energy Consumption Data Analytics
al Electricity Consumption (GWh)
Electricity consumption per capita [kWh/person]
7,000

6,000

5,000

4,000

3,000

2,000

1,000

0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2000 2010 2020 2030 2040
http://bseep.gov.my/App_ClientFile/df08bc24-99fb-47a3-937f-dc25df9d3997/Assets/BSEEP%20NCA2017/PAPER%203-
%20MARINA%20YONG%20Dynamic%20Mandate%20for%20the%20Future.pdf
 Electricity
Saving
Potential in
Malaysia

https://www.eria.org/publications/cost-effectiveness-of-the-energy-efficiency-and-conservation-policy-in-the-association-of-southeast-asian-nations/
 Malaysia Renewable Energy Timeline (2001-2022)

2001-2005 2006-2010 2011-2015 2016-2020 Nov 2021

• 8th Malaysia • 9th Malaysia • 10th Malaysia • 11th Malaysia • Malaysia
Plan Plan Plan Plan Renewable
Energy
• Small RE • Rooftop • RE Act 2011 • Rooftop solar Roadmap
Power Solar • Sustainable quota (MyRER) by
(SREP) • Malaysia Energy through Ministry of
• Biomass Building Development Large Scale Energy and
Power Integrated Authority Act Solar (LSS), Natural
Generation Photovoltaic 2011 Net Energy Resources
• COGEN Full (MBIPV)- • SEDA Metering (KeTSA)
focus on grid (NEM) and
Scale Model • Introduction
(BIOGEN) solar PV Self
of FiT
market, Consumption
• Oil palm scheme
incentive etc (SELCO)
byproducts
for small • National RE
scale Policy and
electricity Action Plan
(NREPAP)
2010 – est
policy guide
for RE
development
 Malaysia Renewable Energy Roadmap (MyRER)
 framework to achieve 31% RE share in the national capacity mix by 2025 and 40% by 2035.
 set to be implemented as a guide for RE industry players on the
- direction of national RE development
- potential, targets & strategic framework
- reference for RE capacity projections
 considers two distinct scenarios:
Business as Usual (BAU) - implementation of existing policies and programmes without further
extension/ introduction of new programmes
New Capacity Target (NCT) - higher RE capacity target to align with further decarbonization of electricity
sector toward 2035 milestone.
 Key Actions MyRER
SOLAR BIOENERGY HYDRO TECHNOLOGY

• Review future NEM programmes • Increase bioenergy through • Continue optimising small hydro • Explore new RE technologies,
to converge energy cost. FiT(Auction & tender) and FiT through auctioning, consider resources and solutions for cost
Decrease NEM tariffs to continue explore new opportunity development cost for low head efficient deployment
create incentives and high head system
• Explore feasibility of bioenergy • Assess required energy storage
• Explore new business models power to improve economy • Encourage hydro-geological for system stability maintenance.
(corporate PPA, 3rd party access study to identify new potential
framework, greater avenue for • Assess auction system beyond sites, leading to development of
distributed generations, FiT to support capacity build up open access geo-referenced
monetisation through RE Certs database for developers
• Conduct study of grid extension
• Explore LSS auction (floating to allow additional bioenergy • Explore lifetime extension of
solar. Engagement and development and micro grid existing hydro plants
involvement of state Gov on power plant
suitable sites for solar • Coordinate with States to
development. expedite on implementations and
• Leverage feedstock (Waste to
Energy) to address waste operations
management and supply energy
to grid • Improve existing tendering
process for small hydro
• Study on bio-CNG power development
generation and biomass co-firing
in coal fired power plants

• Encourage studies
&assessments in bioenergy
technology
 Current RE in Malaysia
NEM FiT
(Net Energy Metering) (Feed in Tariff)
- Electricity produced
- Energy generated from solar PV
from renewable
will be used first, the excess will
resources (RE)
be exported to grid on ‘1 on 1’
basis
- Fixed rate
payable for each unit of
renewable energy sold
to Distribution
Licensees (TNB)
LSS
SELCO
(Large Scale Solar)
(Self Consumption)
- A bidding
- Electricity is being
programme by Energy
generated for own
Commission to drive
usage and any excess
down the Levelized
is not allowed to be
Cost of Energy (LCOE)
exported to the grid
for the development
of large scale solar
photovoltaic plant
(LSS)

NEM 1.0
• November 2016
• Quota Allocation: 500MW
• Energy produced from solar PV
will first be consumed, and any
excess will be exported to TNB at
Displaced Cost Rate
- Low voltage: RM 0.31/kWh
- Mid Voltage: RM 0.238/kWh
Evolution of NEM
NEM 2.0 NEM 3.0
• January 2019 • Quota Allocation: 800MW
• Quota Allocation: 500MW • SEDA was appointed as
Implementing Agency
• Alteration to the existing NEM 1.0
• Divided into 3 categories:
• Allows excess solar PV energy to NEM Rakyat-100MW
be exported to the grid on “1 to 1 NEM GoMen- 100 MW
offset” basis. NOVA (Net Offset Virtual
Aggregration)- 600MW
• By 31st December 2020, the quota
has been fully distributed • Applicable until 31st December
2023
 NEM 3.0
(Eligibility Criteria & Main Requirements)

Rakyat GoMen NOVA

Applicant Criteria Domestic consumer (not used as hotel, Government buildings Commercial,, industrial, mining and agriculture
boarding house or any form of business or
service)
Capacity Limit Single phase: ≤ 4 kWac Up to 1000kW (1MW) Nett Offset: ≤ 1MW
Three phase: ≤ 10 kWac Nett Offset + Virtual Aggregation: ≤ 5MW
Categories of TNB Domestic Tariff: Tariff A: Kediaman Commercial Tariff TNB consumers under the following Tariff
consumers Tariff B:LV Commercial Tariff
Tariff C1: MV General Commercial Tariff
Tariff C2: MV Peak/ Off-Peak Commercial Tariff
Mechanism & Roll 1 to 1 (12months) SELCO+ (1 month)
over
Offset Rate/ Effective First 10 years: 1 to 1 offset First 10 years: Average SMP
period After 10 years: Migrate to Self Consumption After 10 years: Migrate to Self Consumption

Type of Installation PV panels mounted on building rooftops

 FEED-in TARIFF (FiT)

 originally available for all the main RE resources (biomass, biogas, small hydro and solar PV). Due to the

rapid decreasing costs, new mechanisms, such as LSS auctions, NEM and SELCO, have been

introduced, replacing the FiT mechanism for solar PV.

 As of the end of 2020, 574 MW of RE capacity have been installed under the FiT programme, majority of

which has been taken up by solar PV (323 MW), while biomass, biogas, and small hydro have a combined

cumulative installed capacity of 252 MW.

 Large Scale Solar Auction (LSS)

 introduced in 2016 to support the uptake of utility-scale solar PV systems with capacities
of 1-100 MW.

 The scheme award LSS rights based on the lowest bid for off-take prices. The result;
competition between developers has pushed off-take solar prices down by 13%
between 2016 to 2017.
 SELCO (Self Consumption)
 Introduced in 2017 for solar PV system owners who intend to use the electricity
generated for self-consumption purposes only.

 No electricity generated are exported to the grid, however, SELCO users benefit from
the shortened installation process as the power system study is not required for
system sizes up to 425 kWac.

 As of December 2020, 93 MW capacity has been installed under this scheme.

Energy
Efficiency -
Building
Energy Use in
Southeast Asia
 Regulations and Cost of Investment (EE)

 The Efficient Management of Electrical Energy Regulations 2008 mandate that any installations that receive
electrical energy from a licensee or supply authority with a total electricity consumption equal to or exceeding 3 million
kilowatt-hours (kWh) over any period of 6 consecutive months must appoint a registered electrical energy manager.

 The MS1525: Code of Practice for Energy Efficiency and Use of Renewable Energy for Non-Residential
Buildings (introduced in 2001 and updated in 2008) is mandatory under the Uniform Building By-Laws. Penang is one
of the few states to have gazetted partial version of MS1525 (covering energy management, roof thermal etc). SEDA is
currently working with MPPJ on rolling out the full version of MS1525.

 Additional cost incurred in typical compliance with MS1525 is RM3-4 investment cost per kwh savings. An
integrated approach will cost much less – RM0.60-RM2 investment cost for every kWh savings

 The Energy Efficiency and Conservation Act is still waiting to be gazetted. It will make it mandatory to have energy
manager for certain energy users, and will focus on capacity building and guidance, instead of ‘stick’.
 • Malaysia Debt Ventures – loans for
ESCOs to carry out EPC

• CIMB

• Green Tech schemes (GITA/GITE)

• Green Technology Financing Scheme

Current EE Financing Options – tax rebate and guarantee. Focusing
on RE and EE

• From 2016-2019, Energy Audit

Conditional Grant was given to
building owners to hire local EXCOs
to undertake energy audit, and to
invest in recommended measures
exceeding the amount of grant (of
max RM50,000).

• Hong Leong Bank EE seed funding

 Green Investment Tax Incentives (GITA/ GITE)
 Mandated to Malaysian Green Technology And Climate Change Corporation (MGTC) , this incentive is to
strengthen the development of green technology through Green Investment Tax Allowances (GITA) for the purchase
of green technology equipment/assets and Green Income Tax Exemption (GITE) for green technology service
providers.
 Green Technology Financing Scheme (GTFS)

 Government provides a rebate of 2% per annum on the interest fees charged

for loans by financial institutions for the first seven years of the loan and
guarantees 60% of the green components cost.
 applicable for producers of green technology (RE generators), green
technology users, and energy efficiency-related projects.
 Following on the positive uptake of GTFS scheme, Ministry of Finance has
launched GTFS 3.0 in 2021, extended until 2023.
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