Malaysia Needs To Step Up Adoption of Renewable Energy

Renewable energy (RE) proponents want the government to step on the pedal, but conditions show that speeding up adoption is easier said than done.

For a start, several hurdles, such as costs, viability and the lack of state support, have to be overcome.

There are good reasons to go for renewable energy production, and they are not just for the benefit of the environment.

As Lionel Yap, former head of the secretariat at the Malaysian Photovoltaic Industry Association, pointed out, big businesses now make RE a criterion in their choice of an investment destination.

“Tech giants such as Amazon, Google, Apple and Microsoft are eye-balling Southeast Asia to set up their hyper-scale data centres and, for now, Indonesia seems to be ahead in the race to win them over,” Yap told FMT Business.

These companies are part of the RE100, a global corporate initiative that brings together large businesses that are fully committed to renewable electric energy production.

Proponents have cited several reasons for going the RE way. For a start, the price of coal, currently one of the main feedstocks for electricity generation, has soared to more than US$300 (RM1,337) per tonne. Yap said a swifter adoption of RE would save the government a lot in subsidy.

Industry players admitted that there are challenges with producing RE, hence they need support to overcome them.

For a start, viability is a problem. As Gading Kencana Sdn Bhd founder Muhamad Guntor Tobeng pointed out, solar power generation in Malaysia peaks for only five hours a day – from 11am to 3pm. By 7pm, charging ends. And if it rains, power generation dips by 20%.

Solar energy now accounts for only 1.2% of all the electricity generated in Malaysia, mostly because many operating licences have been revoked and there are delays in the completion of large-scale solar (LSS) plant projects.

Oil palm biomass is another feedstock for electricity generation but a lack of support from both government and industry has mostly left the proposal in the dust.

CMS Waste Management Sdn Bhd managing director Ronnie CW Tan said he had tried and failed over the last two decades to get the local oil palm sector to turn empty fruit bunches (EFB) into biomass for RE.

Another entrepreneur has simply given up.

As Tan pointed out, it is all the more painful given the fact that Malaysia produces more than 25 million tonnes of EFB waste annually.

Cost is another factor. According to Malaysian Palm Oil Board (MPOB) director-general Ahmad Parveez Ghulam Kadir, the use of biomass may not be as cost-effective as envisaged. “There is a high moisture content, so the pre-treatment cost is high,” he told FMT Business.

Coupled with feed-in tariffs and a lack of competitive pricing, it is not so viable. Nothing illustrates this better than the fact that only one biomass production plant is still operating today.

Another problem is the lack of coordination among government agencies, industry players and RE players, Parveez said.

He said the plantation industries and commodities ministry is looking into centralising the collection of biomasses. However, Tan pointed out that this idea was mooted “a couple of decades ago” but has yet to become a reality.

Given such challenges, it does not look like RE will become the mainstay in energy generation in Malaysia for some time to come, but there is hope.

Recently, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that the government was planning to turn Malaysia into a biomass hub, using material derived from agri-commodity waste.

This, he said, would not only reduce waste but also generate revenue.

This is befitting for a country that is now the world’s second-largest producer of palm oil, and the biggest contributor of biomass.

The concept of using effluents from palm oil mills for electricity generation had been pursued under the economic transformation programme since 2010.

As of 2020, 50 biogas plants were already generating power for the grid. The road to extensive EV use is still long, but a start has been made.