National Energy Policies and the Electricity Sector in Malaysia

Abstract

Since its independence in 1957, Malaysia has gone a long way in developing its economy and infrastructures. As one of the fast growing developing nations, its world renowned infrastructures include the Petronas Twin Tower, SMART tunnel and Bakun hydro dam. A key component that enables this growth is its secure, affordable and reliable electricity sector. Eventhough the initial electricity facilities here was constructed by the British during colonization, Malaysia then continue to nurture its development and reliability through her national policies to ensure that it continues to support her growth and prowess. The main national policy involving the electricity sector in Malaysia is the National Energy Policy. It was formulated in 1979 to ensure efficient, secure and environmentally sustainable supplies of energy including electricity. Later other policies were also formulated to address the arising issues and concerns on the energy sector. Among them are the National Depletion Policy, the Four Fuel Diversification Policy and the Fifth Fuel Policy. This paper reviews and discusses their implementation and various impacts on the electricity sector in Malaysia.

Full text

Proceedings of ICEE 2009 3rd International Conference on Energy and Environment,
7-8 December 2009, Malacca, Malaysia
National Energy Policies and the Electricity Sector in
Malaysia
Thahirah Syed Jalal
Electronics and Communication Engineering Department,
Universiti Tenaga Nasional (UNITEN)
Selangor, Malaysia
thahirah@uniten.edu.my
Pat Bodger
Department of Electrical & Computer Engineering,
University of Canterbury,
Christchurch, New Zealand
pat.bodger@canterbury.ac.nz
Abstract— Since its independence in 1957, Malaysia has gone a
long way towards developing its economy and infrastructures. As
one of the fast growing developing nations, its world renowned
infrastructures include the Petronas Twin Towers, the SMART
tunnel and the Bakun hydro dam. A key component that enables
this growth is its secure, affordable and reliable electricity sector.
Even though the initial electricity facilities here were constructed
by the British during colonization, Malaysia continued to nurture
its development and improve its reliability through her national
policies, to ensure that it continued to support her growth and
prowess. The main national policy pertaining to the electricity
sector in Malaysia is the National Energy Policy. It was
formulated in 1979 to ensure efficient, secure and
environmentally sustainable supplies of energy, including
electricity. Later, other policies were also formulated to address
arising issues and concerns in the energy sector. Among them
were the National Depletion Policy, the Four Fuel Diversification
Policy and the Fifth Fuel Policy. This paper reviews and discusses
their implementation and various impacts on the electricity
sector in Malaysia.
Keywords- National energy policy, electricity supply industry,
energy resources, renewable energy, energy efficiency
I. INTRODUCTION
The electricity sector in Malaysia has grown much in the
last sixty years. As shown in Figure 1, in 1949, the electric
energy sold was only 141.3GWh [1] whereas by 2007, it had
grown to more than 89,000GWh [2]. This rapid growth has
been hand in hand with the nation’s economic growth,
especially within the industrial and manufacturing sectors.
Figure 1. Electric energy sales in Malaysia between 1949 and 2007 [1-3]
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
Year
Electricity Consumption (GWh)
The electricity supply industry is vertically integrated with
generally a monopolistic nature, where a utility company
handles all the generation, transmission and distribution of
electricity in a region. The main utility companies are Tenaga
Nasional Berhad (TNB) [4], Sarawak Electricity Supply
Company (SESCO) [5] and Sabah Electricity Limited (SESB),
each covering the region of the Peninsula Malaysia, Sarawak
and Sabah respectively. Each company initially started under
the British rule before the nation’s independence and has
remained till today. Since 1998, SESB became one of the
subsidiaries of TNB. In all three regions, there are also
independent power producers (IPPs) supplying some portion of
the electricity supply to the utility companies to transmit to the
consumers.
The sector is governed by several institutions, each with
their own functions and areas of jurisdiction, as shown in Table
I.

441
TABLE I. THE KEY INSTITUTIONS IN THE ENERGY SECTOR [6-9]
Institution Area of jurisdiction
Economic
Planning Unit
(EPU)
Responsible for formulating, regulating and
implementing policies, regulations, legislations,
programmes and projects to improve the economy
and also coordinate functions of other energy related
institutional bodies responsible for a specific sector.
Ministry of
Energy, Green
Technology
and Water
Policy formulator and service regulator for the
energy, green technology and water sectors; facilitate
and regulate the growth of these sectors
The Energy
Commission
(EC)
Handles all the regulatory functions of the Ministry
of Energy
Besides the institutions mentioned in Table I, the Malaysia
Energy Centre (Pusat Tenaga Malaysia, PTM) is another
important institution that coordinates various activities,
specifically planning and technological research, development
and demonstration in the energy sector [10].
All the three main electricity utilities in Malaysia are
government linked companies (with the government as the
main shareholder) and they are heavily regulated by the
institutions mentioned in Table I. Hence the electricity sector is
very much influenced by government policies.
Section II briefly discusses the policies that are in place.
Section III then describes the policies’ implementation and
Section IV which discusses the possible future directions of the
sector. This paper is concluded in Section V.
II. BRIEF HISTORY OF MALAYSIA’S NATIONAL POLICIE S
DEVELOPMENT
The energy policies in Malaysia are formulated by the
Energy Section of the EPU under the Prime Minister's
Department. It is renewed every five years as part of the Five
Year Malaysia Plan.
The very first major policy formulated concerning the
energy sector in Malaysia was in 1974. Under the Petroleum
Development Act 1974, Petroliam Nasional Berhad (Petronas)
was established as the national oil company and vested it with
the responsibility for exploration, development, refining,
processing, manufacturing, marketing and distribution of
petroleum products [9]. Next in 1975, the National Petroleum
Policy (1975) was formulated in the Third Malaysia Plan
(1976-1980) with the objective of bringing about efficient
utilization of the resource for industrial development, as well
ensuring that the nation exercises majority control in the
management and operation of the industry. Its aim was to
guide and regulate the fast growing petroleum industry in
Malaysia where massive production was encountered with an
average growth rate of about 40.5% per annum between 1970
and 1975 [9]. These two policies do not directly govern the
electricity sector and hence will not be discussed in great detail
in this paper. They are mentioned because they affect the way
the fuel resources are supplied to the electricity sector, where
the local resources are utilized as much as possible for power
generation to support the local petroleum industry.
An overall energy policy was formulated in 1979 (National
Energy Policy 1979) with broad guidelines on long term
energy objectives and strategies to ensure efficient, secure and
environmentally sustainable supplies of energy. This is the
main policy that governs the energy sector in Malaysia. Other
policies were later introduced to support its objectives and
implementations.
The National Depletion Policy 1980 was introduced to
safeguard the exploitation of natural oil reserves because of the
rapid increase in the production of crude oil. As a complement,
the Four Fuel Diversification Policy 1981 was then designed to
prevent over-dependence on oil as the main energy resource.
Its aim was to ensure reliability and security of the energy
supply by focusing on four primary energy resources: oil, gas,
hydropower and coal [9].
During the Seventh Plan period (1996-2000), for the
electricity sector, the main thrust was ensuring adequacy of
generating capacity as well as expanding and upgrading the
transmission and distribution infrastructure [11]. In 2000, the
Four Fuel Policy was amended to become the Fifth Fuel Policy
(Eighth Malaysia Plan 2001-2005) where renewable energy
(RE) was announced as the fifth fuel in the energy supply mix.
Energy efficiency was also encouraged to prevent Malaysia
from becoming a net energy importer which will affect her
economic growth [12].
The Ninth Plan strengthens the initiatives for energy
efficiency and renewable energy put forth in the Eighth
Malaysia Plan that focused on better utilisation of energy
resources [13]. An emphasis to further reduce the dependency
on petroleum provides for more efforts to integrate alternative
fuels. Various tax exemptions were introduced for energy
efficiency implementers and renewable energy generators. The
updates on the energy policies are summarized in Figure 2.
Figure 2. The national energy policies that directly governs the electricity
sector
III. POLICIES IMPLEMENTATION
In this section, the implementation of all the policies is
discussed under the implementation of the National Energy
Policy 1979. Since the three policies were formulated to
Fifth Fuel Policy
2000
Electricity
Sector
National Depletion
Policy 1980
Four Fuel
Diversification Policy
1981
National E nergy
Policy 1979

442
complement it, it is difficult to describe their implementation
separately.
The National Energy Policy 1979 has identified three
objectives, which are:
• supply,
• utilization and
• environmental
A. The supply objective
The Supply Objective was aimed to ensure the provision of
adequate, secure, and cost-effective energy supplies through
developing indigenous non-renewable and renewable energy
resources using least cost options and diversification of supply
sources both from within and outside Malaysia [9]. When the
national depletion policy was introduced in 1980, production
control on major oil fields was implemented. The major oil
fields of over 400 million barrels of oil initially in place (OIIP)
restricted their production to 1.75 per cent of OIIP. However,
in 1985, the ceiling was revised to 3 per cent in view of the fact
that 1.75 per cent was on the conservative side. As a result of
this policy, the total production of crude oil is currently limited
to about 650,000 barrels per day. As such, at the current
production rate, proven oil reserves are expected to last another
16 years [8].
In 1981, when the Government adopted the four-fuel
strategy, the strategy was to utilize non-oil domestic energy
resources, to increase the country’s self-reliance with respect to
energy supply and savings in foreign exchange [14]. It aimed
for a supply mix of oil, gas, hydropower and coal in energy
use. As much as possible, local resources of these fuels would
be used to enhance security of supply. The electricity sector has
shown the greatest achievement in terms of the four fuel policy
where the dependence upon fuel oil has been reduced. This can
be observed from the electricity generation fuel mix trends
from 1985 to 2005, as shown in Figure 3.
Figure 3. Electricity generation fuel mix in Malaysia from 1985 to 2005
[Malaysia Plan 5- 8]
Malaysian Electricity Generation Mix
0%
20%
40%
60%
80%
100%
1985 1990 1995 2000 2005
Year
Percentage
Others
Hydro
Gas
Coal
Oil
From Figure 3, the high dependence on oil in 1985 has
been significantly reduced throughout the years, substituted by
natural gas that is found in abundance in Malaysia. This has
been further enhanced when the IPPs came into the electricity
sector in 1993. The IPPs have a higher tendency to build gas
power plants due to quick plant up time, lower capital cost and
easy operation. The sector then became too dependent on gas
and the national depletion policy was later extended from crude
oil to include the natural gas reserves. An upper limit of 2,000
million standard cubic feet per day (mscfd) has been imposed
in Peninsular Malaysia. At the current rate of production,
known natural gas reserves are expected to last for about 70
years [8].
The government later strived to reduce dependence on gas.
Despite environmental and foreign exchange implications (coal
is imported from Indonesia and Australia), several coal power
plants were planned and built including a 3x700MW plant in
Manjung by TNB Janamanjung which was commissioned in
2003. The government is also planning to utilize nuclear power
as an electricity source by 2023, in view of the depletion of
coal and natural gas. In 2008, the Energy, Water and
Communications Minister, Datuk Shaziman Abu Mansor said,
“The Government was left with no choice but to use nuclear
energy as it was the better alternative”. He also said that the
exceptionally-high prices of gas and coal were another reason
the Government had to start looking for alternatives [15].
When the Fifth Fuel Policy was introduced in 2001,
renewable energy was targeted to be a significant contributor to
the country's national grid with the generation mix of 5% of the
total electricity demand by 2005 (about 500MW) [6, 16]. With
this aim, the Small Renewable Energy Program (SREP) was
launched in May 2001. Plants under the SREP projects can sell
up to a maximum of 10MW of electricity to the National Grid.
By the end of May 2003, a total of 48 projects were
approved with a grid connected capacity of 267.3 MW. Of
these, 28 were biomass projects, 16 mini-hydro and four
landfill gas. Apart from the SREP projects, the non-grid
connected facilities of palm oil mills produced for their own
consumption about 1,065 GWh or 1.3 per cent of the total
electricity generated in 2003. To encourage the utilisation of
RE, the 2001 Budget provided fiscal incentives for companies
which utilised biomass as a source of energy. These incentives
were extended for another three years until December 2005
[17]. However, within the five years duration, only two SREP
projects were successfully implemented [16] , which were:
• TSH Bioenergy project in Tawau (10MW) – the
first grid connected biomass power plant in
Malaysia using the fuel mixture of empty fruit
bunch (70%), fiber (20%) and dry shell (10%)
from palm oil wastes
• Jana Landfill in Puchong (2MW) – the first
landfill gas power plant in Malaysia
The renewable resources that were identified in Malaysia
can be generally categorized as biomass (including biogas),
solar and hydro for energy generation. Figure 4 shows the
details of the identified resources, based on their availability
and utilization prospects.

443
Figure 4. Identified renewable energy resources in Malaysia [16]
The target of 5% of RE penetration was revised to be
350MW in the Ninth Malaysia Plan. Out of 350MW, 245MW
was aimed to be achieved from biomass (193MW from palm
oil wastes, 35MW from MSW, 7MW from LFG, 10MW from
rice husk) whereas the remaining 105MW was from mini
hydro.
To encourage biomass utilization in Malaysia, the Biomass
Generation & Co-generation in the Malaysia Palm Oil Mill
(BioGen) was launched in October 2002. This is a United
Nations Development Programme (UNDP) and the Global
Environmental Facility (GEF) programme for the development
of cogeneration technology. Its application related to renewable
energy resources using POME and also to reduce the growth
rate of greenhouse gas (GHG) emissions from fossil fuel fired
combustion processes [18]. The detailed components of the
BioGen programme are provided in Table II.
TABLE II. THE BIOGEN PROGRAMME COMPONENTS [18].
Components Details
Component 1:
Biomass
Information
Services &
Awareness
Enhancement
Program
Address the information barriers that hinder the
development and implementation of biomass-
based grid connected power generation/CHP in
relevant industries such as the palm oil industry. It
involves the implementation of capacity building
activities and information dissemination services
to ensure information on biomass energy
technology is widely and freely available.
Component 2:
Biomass Policy
Study and
Institutional
Capacity
Building
Build on the existing policy studies regarding
renewable energy as the “fifth fuel” for power
generation, and aims to remove the institutional
and price-related barriers to the development and
implementation of biomass-based power
generation and CHP.
Component 3:
Biomass
Initiatives
Financing
Assistance
Program
Encourage the government, private sector and the
financial communities to provide financial
assistance to the development and implementation
of biomass-based power generation/cogeneration
projects.
Component 4:
Biomass-Based
Power
Generation
Demonstration
Demonstration sites are selected to participate in
the BioGen technology demonstration projects.
Component 5:
Biomass Energy
Technology
Development
Program
Train and provide support to local plant engineers
and operators for plant optimization and efficiency
From the programme, it is expected that a conducive
environment is created in Malaysia for biomass and co-
generation from palm oil mills. There are also two full scale
models that would be implemented in Malaysia [18]:
• 10MW biogas power plant in Serting
• 13 MW biomass power plant in Bahau (utilizing
EFB)
As for hydro as an energy resource, by 2007 there were
already 2,091MW and 29MW of hydro and mini hydropower
facilities in Malaysia. They constituted 9.6% and 0.1% of the
installed capacity respectively [2]. The 2400MW Bakun power
plant is expected to be commissioned by 2011. The
hydroelectric potential in Malaysia is very significant.
According to the national energy balance 2001, the
hydroelectric potential amounts to 29,000 MW (of which 2/3 is
in Sarawak). In comparison, the installed central electricity
generating capacity in 2007 is 21,815 MW [2]. Other
hydroelectric projects that have been identified are [19]:
Renewable Energy
Sources
Solar
Photovoltaics
Thermal
Hydro Biomass
Mini
H
y
dro
Palm Oil Wood Municipal Rice
Empty
Fruit
Bunch
(EFB)
Palm Oil
Mill
Effluent
(POME)
Fibre
Shell
Trunks
Forest
Saw
mill
Municipal
Solid
Waste
(MSW)
Landfill
Gas
(LFG)
Rice
Husk
Straws

444
Peninsular Malaysia:
• Nenggiri (450MW)
• Lebir (272MW)
• Galas (108MW)
• Ulu Terengganu (516MW)
• Tekai (156MW)
• Telom Dam (91MW)
• Maran (109MW)
Sarawak:
• Murum (900MW)
• Baleh (950MW)
• Pelagus (770MW)
Sabah:
• Liwagu (164MW)
If all these identified hydro projects are implemented, they
will have a profound effect on the generation mix in Malaysia.
However, problems related to land-use, socio-economics, and
environment impact makes it questionable whether all of this
potential can be harvested [20].
Another project also funded by UNDP-GEF is the
Malaysian Building Integrated Photovoltaics (MBIPV),
launched in May 2005. It is aimed to increase the utilization of
BIPV in Malaysia [21]. The programme components are
described in Table III.
TABLE III. THE MBIPV PROGRAMME COMPONENTS [21]
Components Details
Component 1:
BIPV
information
services,
awareness and
capacity building
program
Enhance the level of understanding and awareness
for the public and policy makers to understand the
technology, aware of its true benefits and
ecological significance; provide training for
installation contractors
Component 2:
BIPV market
enhancement and
infrastructure
development
program
Implement four showcases on selected newly
constructed premises which are a government
building, a commercial building, a highly visible
public building and a residence with a total
capacity of 100kWp to provide key references on
the value-added of BIPV technology integrated
into four different building envelopes;
Implement Suria 1000 programme where
1000kWp will be subsidized and installed over a 4
year period at residential or commercial buildings
(based on successful biddings by members of the
public).
Component 3:
BIPV policies
and financing
mechanism
program
Enhance the capacity of policy makers to develop
policies conducive for BIPV for the Tenth
Malaysia Plan
Component 4:
BIPV industry
development and
R&D
enhancement
program
Enhance R&D activities on product development,
provide technical assistance to improve the testing
facility on quality products and to increase the
involvement of the industry
The MBIPV programme is still ongoing and if successful,
will provide installed capacity of 1.5MWp of BIPV in
Malaysia by the year 2010. It also aims to reduce the current
BIPV cost by about 20% by the year 2010. It may also provide
inputs for policy makers to incorporate in the next Malaysia
plan that will further encourage the utilization of BIPV in
Malaysia.
Besides these programmes, Malaysia has commissioned its
first refuse-derived fuel (RDF) power plant in June 2009. The
plant, located in Semenyih, is capable of converting 1000
tonnes of MSW per day into RDF and utilizing it as fuel to
generate up to 5MW of electricity.
B. The utilization objective
The early stage of the utilization objective was to focus on
providing electricity to as many residents as possible. This was
implemented through the Rural Electrification Programme
where budgets were allocated in each Malaysia Plan for
electrification of isolated places. Previously, the government
also used the utility companies - National Electricity Board
(NEB) (TNB prior to privatization), SESB and SESCO - to
bear 50% of the capital cost of rural electrification
programmes. When they were privatized in the 1990s and more
IPPs came into picture sfrom 1997, the funds were obtained
through the Malaysian Electricity Supply Industry Trust
Account (MESITA), where each electricity company would
channel a percentage of its profits to the account for projects of
national interest. The programme has contributed to
electrification improvements in Malaysia as shown in Figure 5.

445
Figure 5. Rural Electrification Coverage from 1990-2005 [Malaysia Plan 5-
8]
Rural Electrification Coverage by Region in Percentage (1990-
2005)
0
20
40
60
80
100
120
Peninsular
Malaysia
Sabah Sarawak Malays ia
Region
Perce ntage (%)
1990
1995
2000
2005
The electricity supply has also improved where the number
of interruption incidences has been drastically reduced (see
Figure 6).
Figure 6. The electricity interruption incidences between 1995 to 2005 [12,
13]
303722
69584
47997
0
50000
100000
150000
200000
250000
300000
350000
1995 2000 2005
Year
Interruptio n Incidences (numb er)
Interruption Incidences (number)
This objective was aimed to promote the efficient
utilization of energy and to discourage wasteful and non-
productive patterns of energy consumption. The Government's
primary approach to realize this objective is to rely heavily on
the energy industry and consumers to exercise efficiency in
energy production, transportation, conversion, utilization and
consumption through the implementation of awareness
programmes. Demand side management initiatives by the utilities,
particularly through tariff incentives, have had some impact on
efficient utilization and consumption. Co-generations is also
encouraged to promote an efficient method for generating heat
energy and electricity from single energy sources.
The government believes that to enhance the level of
achievement of the Utilisation Objective, the market approach
needs to be supplemented by the regulatory approach [8]. In
January 2009, the energy efficiency regulation where large power
consumers (receiving total electrical energy equal to or
exceeding 3GWh in any period not exceeding six consecutive
months) made it compulsory to appoint energy managers and
report their consumption regularly to the EC [7]. The main
tasks of the energy managers are:
¾ to audit and analyse the total electrical energy
consumption
¾ to advise consumers on developing and
implementing measures to ensure efficient
management of electrical energy at the
installation; and
¾ to monitor effective implementation of the
measures referred
Several industrial energy efficiency initiatives are outlined
including various tax exemption provisions, energy auditing
programmes, energy service companies support programmes
and technology demonstration programmes. Energy efficient
technologies usually come with a high price tag, and industries
are often reluctant to invest in activities that do not have visible
benefits to the productivity or profit levels. Besides, factories
tend not to prioritise energy efficiency because of the relatively
low price of energy in Malaysia.
A notable programme is the Malaysian Industrial Energy
Efficiency Improvement Project (MIEEIP), conducted between
2001 and 2007. It is also another UNDP and GEF funded
programme. The objective of the MIEEIP is to create a
sustainable and conducive environment for energy efficient
industries in Malaysia. It was implemented in eight
components as shown in Table IV.

446
TABLE IV. THE MIEEIP PROGRAMME COMPONENTS [PTM, 2009]
Components Details
Component 1:
Energy-use
Benchmarking
Assist industries to detect their energy inefficiencies by
measuring and comparing their energy intensity at
process level and overall company level against peers
or industries.
Component 2:
Energy Audit
Free energy audits are performed at selected industries
to identify how energy is being used in the form of
electricity, gas, oil or steam. The potential for energy
savings are then identified and recommended.
Component 3:
Energy Rating
Promote the use of high efficiency motors by adopting
the European Committee of Manufacturers of EU
Electrical Machinery and Power Electronics (European
CEMEP) scheme as the basis for the Malaysian
standard for motors.
Component 4:
Energy Efficiency
Promotion
Disseminate information on energy efficient practices
and technology applications to the industries through
the publication of a quarterly newsletter.
Component 5:
ESCOs Support
Provide workshops, seminars and training sessions on
business plans, financing, energy engineering and
design tools and energy auditing to build the capacity of
local energy service companies (ESCO).
Component 6:
Energy Efficient
Technology
Demonstration
Seven companies have been selected to participate in
the MIEEIP energy efficient technology demonstration
projects, these factories are mainly from the 54 MIEEIP
audited sites.
Component 7:
Local Energy
Efficient
Equipment
Manufacturing
Support
Train and provide support to local equipment
manufacturers on high efficiency designs and
production technologies.
Component 8:
Financial
Institution
Participation
An energy efficient project loan financing scheme of
RM 16 million has been setup at the Malaysian
Industrial Development Finance Bhd. (MIDF). As fund
managers, MIDF has disbursed loans for several
demonstration projects. The allocations are made
available by the Global Environment Facilities (GEF)
and the Malaysian Electric Supply Industry Trust
Accoun t (MESITA)
Some of the deliverables of the programme were the
following publications:
• Energy Efficiency and Conservation Guidelines
• Boiler Best Practices
• Energy Audit Guidelines
Among its successful projects were:
• Heveaboard saves up to RM720,000 on its annual
bill from its wood dust fired thermal oil heater
project [8, 10]
• Cargill Palm Products saves more than RM1.9
million in energy costs
According to schedule, the project should have been
completed by now. An evaluation report on the programme’s
effectiveness would provide a good review on how energy
efficiency can be achieved in Malaysia’s industries.
C. The Environmental Objectives
This objective was intended to minimize the negative
impacts of energy production, transportation, conversion,
utilization and consumption on the environment. All major
energy development projects are subjected to the mandatory
environmental impact assessment requirement outlined in the
national environmental policies such as the National Policy on
the Environment 2002. The environmental objective has strong
pressure from the rapid energy demand growth in Malaysia.
Energy has strong environmental impacts at every level -
namely, exploitation of energy resources, energy supply and
energy demand levels. Environmental consequences, such as
emissions, discharges and noise, are subjected to the
environmental quality standards such as air quality and
emission standards. However, emission of pollutants to the
atmosphere constitutes the biggest impact of the energy sector
on the environment, the transportation industry being the
biggest culprit [8].
As part of her efforts to fulfill this objective, Malaysia
became a Party to the United Nations Framework on Climate
Change in July 1994 and has ratified the Kyoto Protocol on 4
September 2002. The Kyoto Protocol was enforced on 16th of
February 2005. Malaysia has been following the negotiations
and development of climate change issues very closely due to
the numerous implications that could arise from the agreements
achieved. As a developing country, Malaysia has no
quantitative commitments under the Kyoto Protocol at present.
However, through the Clean Development Mechanism (CDM),
Malaysia could benefit from investments in the green house
gasses (GHG) emission reduction projects, which will also
contribute towards the country's sustainable development
goals, the overall improvement of the environment and result in
additional inwards financial flows [22].
CDM projects result in certified emission reductions
(CERs) that could be traded in the international market. Like
any other trade, these CER units accrued through the CDM are
a commodity. These CERs would provide mutually shared
benefits between developing and developed countries. The first
applications for national CDM approval were received at the
end of 2002. The energy related projects which are in the
pipeline can be grouped into the following categories:-
• Energy Efficiency – to implement energy efficient
improvements such as in an energy intensive
factory
• Landfill Gas to Electricity – to utilize the methane
in landfill gas for electricity production
• Renewable Energy – to utilize any biomass,
biogas or hydropower for electricity generation
[22]
D. Other Implementation Efforts
Besides the efforts in enabling the technological
development in Malaysia, another commendable effort is the
sharing of information to the public on the country’s energy
usage. This is done through several mechanisms such as:

447
• Malaysia Energy Database and Information
System (MEDIS) - to establish a comprehensive
national database and information system to
support an integrated national energy planning
[23]
• Publications of periodic reports by the Energy
Commission on the performance of the energy
sector [7]
Another effort that has been implemented in conjunction
with the National Energy Policy is the Integrated Resource
Planning (IRP) project that attempts to take a comprehensive
approach towards energy planning. The project was conducted
in 2005 with the co-funding from the Danish International
Development Agency (DANIDA). Three modeling tools -
Comparative Techno-Economic Assessment of Energy Supply,
Energy Demand and Demand Side Management Option
(COMPEED), Long Range Energy Alternatives Planning
(LEAP) and Computable General Equilibrium (GCE) [24]
were introduced. Energy planners and regulators were to
evaluate the total costs and benefits of both the supply-side and
demand-side options in energy planning. It enabled them to
employ an optimal mix, which would provide energy at the
least financial, social and environmental cost. These programs
have enabled PTM to perform some integrated analyses, which
were [9]:
• Demand Side Management (DSM) analyses
• Assessment of the combined heat and power
(CHP)/ co-generation and
• Implementation of the Renewable Energy Power
Generation Policy
The government also seems to portray its keenness on
energy efficiency and renewable energy by example where
their head offices are specially designed for green intent. These
buildings are the low energy office of the Ministry of Energy,
Green Technology and Water office in Putrajaya and the Zero
Energy Office of PTM in Bandar Baru Bangi.
IV. FUTURE DIRECTIONS
In April 2009, the Ministry of Energy, Water and
Communications (MEWC) was replaced by the Ministry of
Energy, Green Technology and Water. At the same time, the
National Green Technology Policy was launched. Green
technology refers to products, equipment or systems which
satisfy the following criteria:
• Minimizes degradation of the environment
• Has a zero or low green house gas (GHG)
emission
• Safe for use and promotes a healthy and improved
environment for all forms of life
• Conserves the use of energy and natural resources
• Promotes the use of renewable resources [25].
This step can be interpreted as an affirmation of Malaysia’s
commitment towards sustainable development.
As the end of the Ninth Malaysia Plan is approaching in
2010, it will be interesting to observe whether the 350MW
target of RE will be achieved or not. It is also expected that the
coming Malaysia plan will place more emphasis on energy
efficiency and RE. A policy on nuclear energy is also in the
midst of being drafted by the relevant ministries [26].
V. CONCLUSIONS
Malaysia has elaborate energy policies that govern her
energy sector including its electricity industry. These have been
supported by numerous implementation efforts. Beside the
improvement in the country’s electrification rate and supply
quality and diversified electricity generation mix, the
penetration of RE is yet to be proven. The end of the Ninth
Malaysia Plan will provide a useful insight as to whether a
more intensive approach towards RE and EE is required.
ACKNOWLEDGMENT
The authors wish to gratefully acknowledge the updated RE
projects information provided by Sansubari Che Mud, Senior
Manager, Renewable Energy Unit, Tenaga Nasional Berhad.
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