《IRENA:2023马来西亚能源转型展望报告(英文版)(136页).pdf》由会员分享,可在线阅读,更多相关《IRENA:2023马来西亚能源转型展望报告(英文版)(136页).pdf(136页珍藏版)》请在三个皮匠报告上搜索。
1、MALAYSIA ENERGY TRANSITION OUTLOOK IRENA 2023 Unless otherwise stated,material in this publication may be freely used,shared,copied,reproduced,printed and/or stored,provided that appropriate acknowledgement is given of IRENA as the source and copyright holder.Material in this publication that is att
2、ributed to third parties may be subject to separate terms of use and restrictions,and appropriate permissions from these third parties may need to be secured before any use of such material.CITATIONIRENA(2023),Malaysia energy transition outlook,International Renewable Energy Agency,Abu Dhabi.ISBN:97
3、8-92-9260-357-1ABOUT IRENA The International Renewable Energy Agency(IRENA)is an intergovernmental organisation that supports countries in their transition to a sustainable energy future,and serves as the principal platform for international co-operation,a centre of excellence,and a repository of po
4、licy,technology,resource and financial knowledge on renewable energy.IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy,including bioenergy,geothermal,hydropower,ocean,solar and wind energy,in the pursuit of sustainable development,energy access,energy securi
5、ty and low-carbon economic growth and prosperity.www.irena.orgACKNOWLEDGEMENTS This report was prepared by IRENA in close collaboration with the Malaysian Ministry of Natural Resources,Environment and Climate Change,in consultation with Energy Commission,Sustainable Energy Development Authority,Sing
6、le Buyer,Tenaga Nasional Berhad,Sarawak Energy Berhad Sabah Electricity Sdn.Bhd.,and Malaysian Green Technology&Climate Change Corporation.IRENA is grateful for the support,external reviews and feedback received from the Ministry of Energy Natural Resources,Environment&Climate Change,Energy Commissi
7、on,Sustainable Development Authority,Malaysia Green Technology&Climate Change Corporation,Tenaga Nasional Berhad,Sabah Enbergy Sdn.Bhd.,Sarawak Energy Berhad,Yin Shao Loong(Khazanah Research Institute)and Beverley Allison Mcfrost.IRENA would like to thank the Government of Denmark for supporting IRE
8、NA with the work that formed the basis of this report.Chapters 2,3 and 5 of this report were authored by Badariah Yosiyana(IRENA),Deger Saygin(consultant)and Nor Ziha Zainol Abidin(consultant)under the guidance of Gurbuz Gonul(Director,IRENA Country Engagement and Partnerships),Binu Parthan(Head,Reg
9、ions)and Prasoon Agarwal(ex-IRENA).The executive summary,chapters 4 and 5 were authored by Maisarah Abdul Kadir,Adam Adiwinata,Sen Collins,Raul Miranda,Walter Sanchez and Nicholas Wagner under the guidance of Roland Roesch(Acting Director,IRENA Innovation and Technology Centre),Ricardo Gorini,Dolf G
10、ielen(ex-IRENA)and Emanuele Taibi(ex-IRENA).Additional review,valuable comments and suggestions were provided by IRENA colleagues Stephanie Clark,Ute Collier,Francis Field,Diala Hawila,and Nadia Ridwan(consultant).The following colleagues also provided methodological and analytical support for the r
11、eport:Maria Vicente Garcia,Krisly Guerra,Gayathri Prakash and Rodrigo Leme.The editor of this report was Lisa Mastny.Design by Phoenix Design Aid.DISCLAIMER This publication and the material herein are provided“as is”.All reasonable precautions have been taken by IRENA to verify the reliability of t
12、he material in this publication.However,neither IRENA nor any of its officials,agents,data or other third-party content providers provides a warranty of any kind,either expressed or implied,and they accept no responsibility or liability for any consequence of use of the publication or material herei
13、n.The information contained herein does not necessarily represent the views of all Members of IRENA.The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned.The d
14、esignations employed and the presentation of material herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region,country,territory,city or area or of its authorities,or concerning the delimitation of frontiers or boundaries.MALAYSIA ENERGY TRANSI
15、TION OUTLOOK4|MALAYSIA ENERGY TRANSITION OUTLOOKFOREWORDMalaysia is among the most highly developed states of the Southeast Asia region and a founding member of the Association of Southeast Asian Nations(ASEAN).Over the next three decades,the Malaysian economy is expected to triple in size,while its
16、 population is projected to rise to over 40 million people;consequently,primary energy supply in Malaysia is set to increase by 60%over the same period.Today,Malaysia stands at a crossroads.To meet this rising energy demand,the country could utilise its diminishing oil and gas resources and ultimate
17、ly become reliant on international imports.On the other hand,it can choose to tap its considerable renewable energy resource potential to provide affordable,domestic alternatives to fossil fuels.Malaysia has wisely begun to focus on the latter,setting near-term targets to increase renewable energy t
18、o help meet rising demand.The country has also announced its aim to reach net-zero emissions by as early as 2050 reflected in its latest National Energy Policy and continues to refine a long-term low-emission development strategy.Malaysia is well positioned to develop a sustainable energy system bas
19、ed on higher shares of renewable energy that can support socio-economic development,address climate change and achieve greater energy security.To support this transition,this report provides a long-term energy pathway to a cleaner and more sustainable energy system in Malaysia.It explores end-use se
20、ctor electrification,the rapid expansion of renewable generation,energy efficiency solutions,the role of emerging technologies such as clean hydrogen and batteries,as well as the importance of further power sector integration,both within the country and with neighbouring countries.The engagement of
21、the Ministry of Natural Resources,Environment and Climate Change,Tenaga Nasional Berhad(TNB),Sabah Energy Berhad,Sarawak Energy Berhad and the Sustainable Energy Development Agency(SEDA)were central to the development of this report.We are also grateful to the Government of Denmark for its support f
22、or IRENAs work in the ASEAN region.Malaysia can pursue a path to sustainability,prosperity,energy leadership and connectivity in ASEAN.This report,and the process undertaken to create it,represent an important phase in this journey.We stand ready to help Malaysia pursue an energy system based on the
23、 ample renewable energy resources available across the country and beyond,which can serve to lower energy costs,reduce emissions,drive economic development,and meet the countrys long-term energy and climate goals.Francesco La CameraDirector-General,IRENAMALAYSIA ENERGY TRANSITION OUTLOOK|5FOREWORDMa
24、laysia recognises the importance of a future-proof energy system that is modern,reliable and affordable.We also believe that a sustainable and low carbon energy sector is vital contain the impacts of climate change.Malaysias relative share of cumulative carbon dioxide emissions is nominal at 0.37%of
25、 global emissions and compared with its peers in emission terms,the country is emissions efficient,with a GNI per capita of USD 10 930 in 2021.Admittedly,however,it is still necessary for us to play our part in ensuring that our cumulative emissions remain low.Therefore,as a responsible global citiz
26、en,Malaysia has pledged,in tandem with the international community,to ramp up our mitigation measures and gradually decarbonise our energy sector.We aspire to be carbon neutral by 2050 and we take this goal seriously.Based on our existing plans and projections,the power sector is expected to increas
27、e its renewable energy capacity to 31%by 2025 and 40%in 2035,reducing the carbon intensity to GDP of the sector by 60%by as early as 2030,compared to the year 2000 baseline.At the same time,Malaysia aspires to remain a dynamic and pre-eminent trading nation.Therefore,in response to heightened global
28、 calls for urgent climate action and a systemic shift to more sustainable economic models,our country needs to explore and unleash sustainability-driven economic areas,opportunities and potential to support our future growth,while decarbonising its various economic sectors.Indeed,a just and successf
29、ul energy transition can emerge as a future source of jobs and business opportunities for our people.Hence,this Malaysia energy transition outlook which embodies the cumulative efforts of IRENA and the Ministry of Natural Resources,Environment and Climate Change is a timely document that presents op
30、tions for the nation to accelerate its energy transition and achieve our carbon-neutral goals.I am confident that it represents a positive contribution to long-term policy planning for the energy sector in Malaysia.I would also like to take this opportunity to acknowledge the valuable support,inputs
31、 and insights provided by all stakeholders during its preparation,which have provided depth and nuance to the energy transition pathway we are exploring.Finally,I would like to express my sincere gratitude to IRENA for its collaboration on this project,in addition to the Agencys continued,vital effo
32、rts in advancing renewable energy solutions globally.It is my earnest hope that this report will mark the beginning of a significant partnership,as well as further beneficial co-operation,between IRENA and the Ministry in furthering the global energy transition agenda.Nik Nazmi Nik Ahmad Minister of
33、 Natural Resources,Environment and Climate ChangeMalaysia6|MALAYSIA ENERGY TRANSITION OUTLOOKCONTENTSFOREWORD.4FIGURES,TABLES AND BOXES.7ABBREVIATIONS.10EXECUTIVE SUMMARY .12Key messages.12Introduction.14A sustainable future.141 INTRODUCTION.241.1 Country background.241.2 Renewables Readiness Assess
34、ment.251.3 REmap and FlexTool assessment.262 ENERGY CONTEXT .272.1 Energy sector.272.2 Electricity sector.312.3 Institutional structure.362.4 Strategic framework.372.5 Legal,regulatory and policy framework.392.6 Energy tariffs.433 RENEWABLE ENERGY DEVELOPMENT .473.1 Drivers of renewable energy deplo
35、yment.473.2 Current status and potential.483.3 Economics of renewable energy.493.4 Grid integration of renewables.503.5 Investment and financing.514 ENERGY TRANSITION OUTLOOK .534.1 Methodology and key assumptions .534.2 Energy transition in Malaysia .574.3 Power sector transformation and flexibilit
36、y.784.4 Special thematic focus:The role of hydrogen,bioenergy and local solar PV industry.1044.5 Investments,costs and benefits .1115 KEY CHALLENGES AND RECOMMENDATIONS .1175.1 Energy system and policy planning.1175.2 Regulatory and legal framework.1185.3 Technology and innovation.1215.4 Renewable e
37、nergy financing.123REFERENCES .126MALAYSIA ENERGY TRANSITION OUTLOOK|7FIGURESFigure 1 Malaysias total final energy consumption,by scenario,in 2018,2030 and 2050.16Figure 2 Malaysias power capacity expansion,2018 to 2050,under the PES,1.5-S RE100 and 1.5-S RE90.17Figure 3 Transmission lines and stora
38、ge in 2050 under the 1.5-S .17Figure 4 Inertia contribution by synchronous machines in the Peninsular grid in April 2050 under the 1.5-S RE90.18Figure 5 Energy carrier shares in total final consumption,2018 and under the 2050 1.5-S.19Figure 6 Energy-related CO2 emissions(positive y-axis)and reductio
39、ns due to technology by category compared to the PES(negative y-axis),under the 1.5-S for 2030 and 2050.20Figure 7 Total energy system cost of transitioning towards the 1.5-S over the PES,2018 to 2050.22Figure 8 Malaysias total primary energy supply,by source,2010 to 2019.27Figure 9 Estimated energy
40、 subsidies in Malaysia,2010 to 2022.29Figure 10 Total final consumption in Malaysia,by sector,2010 to 2019.30Figure 11 Total installed power capacity by region,2019.31Figure 12 Malaysias total installed renewable energy capacity,by source,2010 to 2021.32Figure 13 Malaysias total electricity output,b
41、y source,2010 to 2019.33Figure 14 Total electricity consumption by region,2019.34Figure 15 Electricity grids and utility distribution in Malaysia.34Figure 16 Overview of the renewable energy regulatory framework and the available financing instruments in Malaysia.40Figure 17 Large Scale Solar(LSS)pr
42、ogram and lowest bid prices in Malaysia,2016 to 2020.42Figure 18 Regional comparison of electricity prices for the business sector.44Figure 19 Overview of tariff structure before and after the Incentive-Based Regulation.45Figure 20 Enhanced Time of Use time zones.46Figure 21 Malaysias renewable ener
43、gy resource potential.48Figure 22 Overview of bioenergy resources availability in Malaysia.49Figure 23 Peninsular Malaysia electricity industry structure by functions as used in the Grid Code.51Figure 24 Description of REmap scenarios.54Figure 25 REmap tools for analysis of the end-use and power sec
44、tors.55Figure 26 Malaysias total final energy consumption by source and sector,all scenarios,2018,2030 and 2050.59Figure 27 Malaysias total primary energy supply by source,all scenarios,2018,2030 and 2050.60Figure 28 Energy-related emissions by sector,all scenarios,2018,2030 and 2050.61Figure 29 Ben
45、chmarked energy-related emission projection with carbon neutrality pledges and commitments,2010 to 2050.62Figure 30 Energy consumption in the buildings sector by end use and carrier,2018.63Figure 31 Energy consumption in the buildings sector by energy service and carrier,all scenarios,2018,2030 and
46、2050.65Figure 32 Energy efficiency indicators for residential buildings(left)and commercial and public sector buildings(right),all scenarios,2010 to 2050.66Figure 33 Transport energy consumption by end use and carrier,2018.678|MALAYSIA ENERGY TRANSITION OUTLOOKFigure 34 Electric vehicle growth proje
47、ction,all scenarios,2018,2030 and 2050.70Figure 35 Transport energy consumption by end use and carrier,all scenarios,2018 to 2050.71Figure 36 Trade-offs among avoid-shift-improve transport strategies.72Figure 37 Industrial sector energy consumption by sub-sector and carrier,all scenarios,2018,2030 a
48、nd 2050.75Figure 38 Industry sub-sector key measures and actions for decarbonisation.76Figure 39 Energy-related CO2 emissions by scenario,2018,2030 and 2050.77Figure 40 The REmap multi-model approach .81Figure 41 Malaysia representation with 9 nodes.83Figure 42 Electricity demand growth by sector an
49、d scenario,2018,2030 and 2050.84Figure 43 Power capacity growth by scenario,2018,2030 and 2050.85Figure 44 Power generation growth by technology for all scenarios,2018,2030 and 2050.87Figure 45 Key transmission lines to be expanded in the near term in the 1.5-S RE90 scenario.89Figure 46 Sum total of
50、 international line expansion for all scenarios,2018 to 2030.90Figure 47 CO2 emissions from the power sector and carbon intensity of power generation,all scenarios,2018 to 2050.90Figure 48 International line expansion in Malaysia in the 1.5-S RE100,2018 to 2050.92Figure 49 Non-variable renewable ene
51、rgy generation one-hour ramping by region for the PES and 1.5-S.95Figure 50 Surplus/deficit of electricity in 2050 in the 1.5-S RE90 scenario,not considering power exchange with neighbouring countries.96Figure 51 Transmission lines and storage under the 1.5-S in 2030(upper)and 2050(lower).97Figure 5
52、2 Dispatch operation in South Peninsular Malaysia(upper)and Central Sumatra,Indonesia(lower)in a high variable renewable energy week in 2050.99Figure 53 Dispatch operation in East Sabah in 2050.100Figure 54 Dispatch operation in Sarawak in 2050.100Figure 55 10-hour-Li-Ion battery deployment in Penin
53、sular Malaysia,Sabah and Sarawak under the 1.5-S RE90 scenario,2020 to 2050.101Figure 56 Spinning reserves provision in Peninsular Malaysia,Sabah and Sarawak in 2050 under the 1.5-S.102Figure 57 Inertia contribution by synchronous machines in the Peninsular grid in April 2050 under the 1.5-S RE90.10
54、3Figure 58 Green hydrogen and its applications.105Figure 59 Hydrogen demand projection for all scenarios,2030 and 2050.106Figure 60 Global hydrogen trade flows in the 1.5-S in 2050.107Figure 61 Hydrogen cost curve potential based on 2030 values.108Figure 62 Bioenergy demand in Malaysia,all scenarios
55、,2018 to 2050.109Figure 63 Solar PV installed capacity in Malaysia,2020,2030 and 2050.111Figure 64 Cumulative investments required by component in the 1.5-S RE 90 and 1.5-S RE100 by 2050.113Figure 65 Total clean and renewable energy investments required in Peninsular Malaysia,Sarawak and Sabah to 20
56、50 in the 1.5-S RE90.115Figure 66 Total energy system cost by sector and scenario,2018 to 2050.116Figure 67 Total energy system cost of transitioning towards the 1.5-S over the PES,2018 to 2050.116MALAYSIA ENERGY TRANSITION OUTLOOK|9TABLESTable 1 Selected key actions for achieving the 1.5-S in Malay
57、sia by 2050.15Table 2 Selected technology scale-up and investment needs to 2030 under the 1.5-S.21Table 3 Population and GDP growth assumptions.56Table 4 Summary table for Malaysia.58Table 5 Buildings sector summary for the three scenarios,2018,2030 and 2050.64Table 6 Estimated vehicle stock in Mala
58、ysia,2018,2030 and 2050.68Table 7 Transport sector summary for the three scenarios,2018,2030 and 2050.68Table 8 Industry sector summary for the three scenarios,2018,2030 and 2050.74Table 9 Renewable energy potential in Malaysia.79Table 10 Guiding considerations and motivations behind long-term power
59、 sector simulations for the ASEAN region.82Table 11 International interconnection capacity by scenario and region,2018,2030 and 2050.88Table 12 Renewable energy resources of Malaysias regions and of its close regional neighbours.91Table 13 Short-term investment requirement to 2030 in the 1.5-S.112Ta
60、ble 14 Total investment requirement,by scenario,2018 to 2050.114BOXESBox 1 The COVID-19 pandemics impact on the Malaysian economy.24Box 2 Energy subsidies in Malaysia.28Box 3 Malaysias climate policy and net zero targets.38Box 4 REmap Toolkit.54Box 5 Benchmarking IRENA analysis with net zero pledges
61、 and commitments until 2050.61Box 6 Managing energy efficiency in the residential and commercial sectors.65Box 7 Transitioning to electric vehicles in Malaysia.70Box 8 Decarbonising urban transport avoid,shift and improve policies.72Box 9 Carbon capture and storage for hard-to-decarbonise sectors.76
62、Box 10 The role of Malaysia in a highly renewable and decarbonised ASEAN power sector.9110|MALAYSIA ENERGY TRANSITION OUTLOOKABBREVIATIONSC degrees Celsius1.5-S 1.5C Scenario1.5-S RE 100 1.5C Scenario with 100%renewable generation1.5-S RE90 1.5C Scenario with 90%renewable generationASEAN Association
63、 of Southeast Asian NationsBES Baseline Energy ScenarioCCS carbon capture and storageCO2 carbon dioxideCOVID-19 Coronavirus diseaseDOSM Department of Statistics MalaysiaEJ exajouleETOU enhanced time of useFIT feed in-tariffGDP gross domestic productGITA Green Investment Tax AllowanceGITE Green Incom
64、e Tax ExemptionGJ gigajouleGt gigatonneGTFS Green Technology Financing SchemesGW gigawattHz HertzIBR incentive-based regulationICPT imbalance cost pass-thoughIPCC Intergovernmental Panel on Climate ChangeIPP independent power producerIRENA International Renewable Energy AgencyKeTSA Kementerian Tenag
65、a dan Sumber Asli(Ministry of Energy&Natural Resources)kV kilovoltkW kilowattkWh kilowatt-hourLao PDR Lao Peoples Democratic RepublicLCOE levelised cost of electricityLPG liquefied petroleum gasLSS large scale solarLT-LEDS long-term low emission development strategyLULUCF land use,land-use change an
66、d forestrym2 square metreMALAYSIA ENERGY TRANSITION OUTLOOK|11MESI Malaysia Electricity Supply IndustryMGATS Malaysian Green Attribute Tracking SystemMJ megajouleMoF Ministry of FinanceMoT Ministry of TransportMt million tonneMVA megavolt amperMW megawattMWh megawatt-hourMYR Malaysian ringgitNDC Nat
67、ionally Determined Contribution NEDA New Enhanced Dispatch ArrangementNEM net energy meteringNGV Natural Gas for VehiclesNRECC Ministry of Natural Resources,Environment and Climate Change(formerly KeTSA)PES Planned Energy ScenarioPJ petajoulePPA power purchase agreementPPP purchasing power parityPV
68、photovoltaicREmap Renewable Energy RoadmapRRA Renewables Readiness AssessmentSEB Sarawak Energy BerhadSEDA Sustainable Energy Development Authority SESB Sabah Electricity Sdn.Bhd.SREP small renewable energy powerST Energy Commission(Suruhanjaya Tenaga)SRI socially responsible investingTES Transformi
69、ng Energy ScenarioTNB Tenaga Nasional BerhadTOU time of usetscf trillion standard cubic feet of gasTWh terawatt-hourWETO World Energy Transitions OutlookUNFCCC United Nations Framework Convention on Climate Change USD United States dollar12|MALAYSIA ENERGY TRANSITION OUTLOOKEXECUTIVE SUMMARY KEY MES
70、SAGESMalaysia is an emerging economy located in Southeast Asia and a member state of the Association of Southeast Asian Nations(ASEAN).By 2050,Malaysias population is expected to rise to 40.7 million people and the economy will nearly triple in size.The countrys primary energy supply will increase b
71、y 60%to 6.7 exajoules(EJ)from 4.1 EJ in 2018.To meet rising energy demand while ensuring energy security and affordability in the future,Malaysia stands at a crossroads:either continue using its diminishing oil and gas resources while also turning to volatile international oil and gas markets to imp
72、ort energy,or tap the significant potential of renewable energy sources that can provide local and affordable alternatives to fossil fuels.The report shows that it is cheaper to do the latter,with the share of renewable energy reaching over half the countrys final energy mix by 2050,up from just 5%t
73、oday.Overall,the total cumulative energy system cost in the reports 1.5C Scenario(1.5-S)is USD 9 billion lower annually than in the main reference scenario,the Planned Energy Scenario(PES)in 2050.The avoided externalities due to health and climate change are between USD 2 billion and USD 4 billion a
74、nnually in the 1.5-S compared to the PES.Thus,transitioning towards renewable energy in the 1.5-S will save Malaysia between USD 9 billion and USD 13 billion annually in avoided energy,climate and health costs.In this lower-cost and lower-carbon future,the energy landscape in the country would chang
75、e from one dominated by fossil fuels,which currently comprise around three-quarters of primary energy demand,to one that sees deep electrification across all end-use sectors,with electricity making up 40%of final energy.This entails scaling up annual electricity consumption from around 150 terawatt-
76、hours(TWh)in 2018 to over 348 TWh by 2050,while also scaling up key renewable resources such as bioenergy,geothermal and hydrogen.MALAYSIA ENERGY TRANSITION OUTLOOK|13Renewable direct-use is also important,with 20%of final energy coming from these sources by 2050.The production of clean hydrogen and
77、 its derivative fuels must ramp up from negligible levels in 2020 to at least 1.5 million tonnes by 2050.The power sector would be greatly transformed,with two possible highly decarbonised routes explored in this report:a 100%renewable energy case(1.5-S RE100),and one with around 90%renewables combi
78、ned with carbon capture and storage(CCS)(1.5-S RE90).These cases show how the availability of key technologies can influence the decarbonisation pathway to allow for a balanced perspective of the impacts of relying on different technologies.The two cases entail between 103 gigawatts(GW)and 153 GW of
79、 installed solar photovoltaics(PV),with 36 GW of other renewables,supported by 20 GW of battery storage.Regardless of the case,renewables would become the backbone of the power system;this also largely applies to lower-ambition scenarios.To capitalise on the transition,Malaysia has an opportunity to
80、 capture large parts of the transition value chain,which will require the country to install up to 153 GW of solar PV,a total of 782 gigawatt-hours of storage and 109 million electric cars by 2050.The report concludes with a chapter covering key recommendations on how to accelerate the energy transi
81、tion in Malaysia.The broad categories include energy system and policy planning,regulatory and legal frameworks,technology and innovation,and financing.14|MALAYSIA ENERGY TRANSITION OUTLOOKINTRODUCTIONBetween 2010 and 2019,Malaysias total primary energy supply increased 3%annually on average,driven
82、by strong economic and industrial growth as well as rapid urbanisation.By 2050,primary energy supply is expected to increase 1.5%annually on average,to 6.7 EJ.Malaysia has traditionally been a producer of oil and natural gas,with large reserves spread across the offshore waters of Peninsular Malaysi
83、a and the two states of Sabah and Sarawak on the island of Borneo.However,with limited reserves,the country could soon become a net importer of oil and gas.Malaysias primary energy mix is dominated by fossil fuels,which have accounted for more than 95%of the total for the past decade.This includes l
84、arge amounts of imported coal to fuel the countrys power plants.Additionally,decades of direct and indirect fuel subsidisation policies in the country have kept energy prices low to spur economic growth,although several reforms made in the last decade have improved the governments fiscal balance.By
85、the end of 2021,Malaysia had a total installed electricity generation capacity of 33 GW connected to the grid.Power plants fired by coal and natural gas each accounted for around a third of the total installed capacity,with the rest consisting of a mix of large and small hydropower,biomass and solar
86、 PV.Based on the current plans for power generation,additional gas-fired plants are slated to be built in the coming decade,replacing old coal and gas units,while the country also seeks to increase solar PV capacity through various programmes.However,with the volatility in coal and gas prices in 202
87、1 and 2022,Malaysia has now reached a crossroads,at which it may choose to either continue its current trajectory or further accelerate its energy transition beyond its renewable energy targets,while also keeping energy affordable.Malaysia has huge untapped potential renewable energy sources that ca
88、n provide local and affordable alternatives to fossil fuels.The countrys installed capacities of solar PV and other renewables have been growing thanks to the establishment of concrete renewable energy policies and schemes,and a dedicated agency since the 2010s.However,more can be done to further ac
89、celerate the uptake of solar PV in order to exceed the target for renewable energy installed capacity of 40%by 2035.Furthermore,renewable energy targets should also be translated across other end-use consumption such as in the transport and industry sectors,which still rely heavily on fossil fuels.M
90、alaysias latest Nationally Determined Contribution(NDC)submission towards reducing greenhouse gas emissions under the Paris Agreement aims for an unconditional reduction in emission intensity(tonnes of CO2 emissions per unit of gross domestic product)of 45%by 2030 relative to the 2005 level.The coun
91、try has also announced a target for net zero emissions by as early as 2050,as echoed in its latest National Energy Policy,and is preparing a Long-Term Low Emission Development Strategy(LT-LEDS).This report is intended to shed light on possible energy pathways for how these targets can be met.This re
92、port focuses only on energy-related CO2 emissions and does not account for offsets from carbon sinks,however it is important to note that efforts are needed across all greenhouse gases emitting sources.A SUSTAINABLE FUTUREThe International Renewable Energy Agency(IRENA)has prepared Energy Transition
93、 Outlooks to detail long-term perspectives for the world(World Energy Transitions Outlook,WETO),for regions(such as ASEAN)and for countries(this study).The present outlook combines IRENAs Renewables Readiness Assessment with the Renewable Energy Roadmap(REmap)and Power System Flexibility Assessment
94、to chart possible energy pathways to 2050 for Malaysia.The accelerated energy transition scenarios presented include the Transforming Energy Scenario(TES)and the 1.5C Scenario(1.5-S),which is aligned with the 1.5-S in IRENAs WETO,targeting net zero emissions globally by 2050.MALAYSIA ENERGY TRANSITI
95、ON OUTLOOK|15The analysis shows that there are seven general key actions to achieving the 1.5-S.These are presented in Table 1.They include efforts focused on scaling clean electricity to between 90-100%of generation as well as increasing renewable solutions in end-uses.Electrification will play an
96、important role in important sectors such as transport and certain industry sub-sectors.Energy efficiency is also vital and improvements in energy intensity need to accelerate.Overall investment in energy transition investment needs to scale considerably,with as much as USD 415 billion needed in the
97、1.5-S.Finally carbon management solutions are also required to go the final mile in certain challenging sectors to reach net-zero emissions.Table 1 Selected key actions for achieving the 1.5-S in Malaysia by 2050REFERENCE TIME FRAME BASE VALUEWHERE WE NEED TO BE IN 2050,IN THE 1.5-SKEY ACTIONS1Clean
98、 electricityWith electricity generation doubling by 2050 in the 1.5-S,renewables must provide 90-100%of the total electricity supply by 2050,up from 16%in 2018.201816%90-100%2Maximiseuse of localrenewablesThe share of renewables in total final energy consumption will need to increase from 5%in 2018
99、to 59%by 2050.Direct electrification with renewables is the largest contributor,followed by bioenergy.Solar and hydrogen will also play important roles.20185%59%3ScaleinvestmentsustainablyAs much as USD 415 billion will need to be invested in energy transition technologies and related infrastructure
100、 in the 1.5-S by 2050,compared to USD 159 billion in the PES.PES to 2050USD 159 billionUSD 375-415 billion4Electrifyend usesThe share of electricity in total final energy consumption should increase from 26%in 2018 to 40%by 2050.201826%40%5EnergyefficiencyEnergy efficiency measures and efficient tec
101、hnologies are crucial.The energy intensity improvement rate will need to increase from 1.6%per year in the PES to 2.4%per year in the 1.5-S.PES to 20501.6%2.4%6Invest indisruptivetechnologiesThe production of clean hydrogen and its derivative fuels must ramp up from negligible levels in 2020 to at l
102、east 1.5 million tonnes by 2050.2020 0.1 million tonnes1.5 million tonnes7CarbonmanagementsolutionsWhile the measures outlined in this report reduce emissions 60%compared to the PES,to reach net zero emissions,CO2 capture will be required via CCS,bioenergy with carbon capture and storage(BECCS),and
103、other carbon removal and storage measures.PES to 2050Reductions of 120 million tonnes of CO2 16|MALAYSIA ENERGY TRANSITION OUTLOOKMalaysias total final energy consumption is projected to almost double by 2050 according to the Planned Energy Scenario(PES),which reflects current plans and policies for
104、 the energy sector.Driven by an increasing urban population and economic growth,the countrys overall energy demand is expected to grow 2.0%annually.However,with deep electrification across all end-use sectors,fuel switching to renewables,and energy efficiency measures as outlined in the TES and the
105、1.5-S the total final energy consumption can be reduced further by 15%to 22%(Figure 1).Almost one-fifth of Malaysias demand for fuels by 2050 in the 1.5-S will be renewable-based coming from bioenergy,renewable direct-use(such as solar thermal)and hydrogen a large shift from just 1%today.Electricity
106、 will comprise up to 40%of final energy consumption,reflecting the additional electricity demand required to power the transport sector and green hydrogen production.With higher electrification and energy efficiency in the 1.5-S,the countrys total energy consumption will be reduced by almost a quart
107、er in the 1.5-S compared to the PES by 2050.Figure 1 Malaysias total final energy consumption,by scenario,in 2018,2030 and 205001234PESPESTES1.5-SPESTES1.5-S201820302050EJ01234PESPESTES1.5-SPESTES1.5-S201820302050EJBioenergyCoalElectricityHydrogenNatural gasOilSolarBuildingsIndustryTransportElectric
108、ity will become the dominant energy carrier in both the TES and the 1.5-S by 2050,and will become the second most important carrier in the PES.Electricity demand is expected to at least double from todays levels to 2050 regardless of the scenario.Therefore,how the countrys power generation capacity
109、is expanded to meet this demand will be instrumental in achieving national targets for emission reduction and net zero emissions.To chart possible alternatives to a continued reliance on fossil fuels in power generation,this report presents two highly decarbonised routes forward for the Malaysian po
110、wer system:a 100%renewables system(1.5-S RE100)and one that is around 90%renewable,with the rest relying on carbon capture and storage(1.5-S RE90).These cases do not seek to present a singular 1.5-S,but rather show how such a system could be achieved based on the technology choices available.Solar P
111、V is key across all scenarios due to Malaysias abundant solar resources.However,the 100%renewables case calls for very significant expansion of solar and a similarly large expansion of battery storage of around 21GW by 2050.MALAYSIA ENERGY TRANSITION OUTLOOK|17Solar PV will play a key role in power
112、generation regardless of the scenario.Figure 2 Malaysias power capacity expansion,2018 to 2050,under the PES,1.5-S RE100 and 1.5-S RE90From a national perspective,imports of electricity will have a part to play in the future.However,the country has an interesting role in providing renewables and fle
113、xibility to neighbouring countries,in particular from Sarawak and Sabah to Kalimantan(Indonesia)and as far away as the Philippines.From an ASEAN regional perspective,an interconnection linking Western and Eastern Malaysia may not be cost effective(for more on regional interconnection,see IRENA,2022)
114、.This means that any power deficit in Peninsular Malaysia could be potentially supplied mostly by electricity from neighbouring countries,namely from Sumatra,Indonesia(Figure 3).Domestic transmission as well as regional interconnection will need to be expanded in the 1.5-S.Figure 3 Transmission line
115、s and storage in 2050 under the 1.5-S 31 58 13 14 116 44 14-26 2 151 50 3-11-2 190 2018SolarOther REFossil fuel no CCSPES 2050SolarOther REFossil fuel no CCSFossil fuels CCS1.5-S RE90 2050SolarOther REFossil fuel no CCSFossil fuels CCS1.5-S RE100 2050GW050 100 150 200 250 OceanHydropowerOther REFoss
116、il fuel no CCSFossil fuels CCSBioenergySolar14 GW9 GW3.8 GW3.6 GW3.5 GW4 GW2 GW2 GW5 GW0.5 GW0.5 GW0.1 GW0.1 GW0.6 GW0.2 GW1.3 GW6.2 GW4.2 GW11 GW2.5 GWStorageCross-border Interconnectors Main domestic transmission lines2 GW 2.5 GW7 GW2 GW1.5 GW4 GW1 GWDisclaimer:This map is provided for illustratio
117、n purposes only.Boundaries and names shown on this map do not imply the expression of any opinion on the part of IRENA concerning the status of any region,country,territory,city or area or of its authorities,or concerning the delimitation of frontiers or boundaries.18|MALAYSIA ENERGY TRANSITION OUTL
118、OOKDeployment of energy storage would be substantial,in particular in Sabah and Peninsular Malaysia.In the case of Sarawak,hydropower reservoirs act as storage,and therefore other technologies are not needed.This also has implications for the provision of spinning reserves in the country.Spinning re
119、serves equal to 10%of the load can be met at all times by both hydropower and storage without the use of fossil-fuel-based provision.Nonetheless,stability protocols need to be redesigned as power systems move from synchronous machines to inverter-based generation.Results suggest that inertia availab
120、le in the system by 2050 would not be enough to maintain stability after a hypothetical in-feed loss larger than 2 GW(Figure 4).The system should be planned to reliably operate with fewer and fewer synchronous machines in the future,when grid-forming inverters are likely to assume the leading role.U
121、pholding system stability will need to change as operations move from synchronous machines to inverter-dominated generation.Figure 4 Inertia contribution by synchronous machines in the Peninsular grid in April 2050 under the 1.5-S RE900 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 0004/1/2050
122、4/2/20504/3/20504/4/20504/5/20504/6/20504/7/20504/8/20504/9/20504/10/20504/11/20504/12/20504/13/20504/14/20504/15/20504/16/20504/17/20504/18/20504/19/20504/20/20504/21/20504/22/20504/23/20504/24/20504/25/20504/26/20504/27/20504/28/20504/29/20504/30/2050MWsNorth gasEast gasSouth gasCentral gasPerak g
123、asNorth hydroEast hydroCentral hydroPerak hydroNorth bioEast bioSouth bioCentral bioPerak bioInertia to keep RoCoF at 1 Hz/s after a theoretical 2 GW infeed lossInertia to keep RoCoF at 1 Hz/s after a theoretical 3 GW infeed lossBiomass HydropowerNatural gasBioenergy will play a role in Malaysias en
124、ergy transition,contributing around 16%of total final consumption by 2050 in the 1.5-S(Figure 5).Its application will be mostly as biofuel,for instance in aviation,as well as substituting fossil fuels in some industrial sub-sectors,such as the iron and steel,and cement industries.To further unlock t
125、he potential of bioenergy in Malaysia,it is crucial to have stronger inter-institutional co-ordination and strategy that includes bioenergy as part of the energy transition,while also addressing sustainability and industrial concerns to scale up potential resources.MALAYSIA ENERGY TRANSITION OUTLOOK
126、|19Hydrogen will provide a complementary solution to meet the countrys ambitious climate objectives.Green hydrogen will comprise up to 5%of total final consumption(including non-energy use)in the 1.5-S by 2050,where it will play a role in decarbonising some industrial sub-sectors and meeting a growi
127、ng export market for green hydrogen in Asia and the Pacific.Bioenergy has wide application in end uses,but hydrogen also begins to play a role in the 1.5-S towards 2050.Figure 5 Energy carrier shares in total final consumption,2018 and under the 2050 1.5-STFEC(%)7%Biofuels1%Coal29%Electricity24%Natu
128、ral gas1%23%Oil1%Solar9%Biomass5%Hydrogen3%Coal21%Electricity30%Natural gas1%1%45%OilBiofuelsNon-energyNon-energy20182050 1.5-S2.7 EJTotal final energy consumption4.3 EJTotal final energy consumptionMalaysia aims to reach net zero emissions by as early as 2050.If the established measures in the 1.5-
129、S are met the country can reduce its energy-sector emissions to only 120 million tonnes of CO2 by 2050,a reduction of 58%compared to the current pathway(Figure 6).However,carbon offsetting via land use,land-use change and forestry(LULUCF)will be instrumental for Malaysia to go the final mile and rea
130、ch net-zero emissions,where other CO2 removal technologies can be considered to further offset remaining emissions.20|MALAYSIA ENERGY TRANSITION OUTLOOKThe majority of emission reductions in the 1.5-S result from electrification with renewables or from energy efficiency.Figure 6 Energy-related CO2 e
131、missions(positive y-axis)and reductions due to technology by category compared to the PES(negative y-axis),under the 1.5-S for 2030 and 2050(150)(100)(50)0 50 100 150 200 250 300Mt CO2201820302050BECCS and other carbon removal measuresHydrogen and its derivativesRenewables(power and direct uses)OilC
132、oal and cokeElectrification of end uses(direct)PES emissions1.5-S emissionsEnergy conservation and efciencyNatural gasOver the period to 2030,significant investment will need to be directed to renewables,energy efficiency,and enabling technologies and infrastructure.In the nearer term,to 2030,more t
133、han 17 GW of solar PV will need to be installed,requiring investment of USD 10.8 billion(Table 2).Grid expansion will require an investment of USD 8 billion to 2030.Electric vehicles will increase to as high as 2.9 million electric cars,with the need for over 150 000 public chargers by 2030.MALAYSIA
134、 ENERGY TRANSITION OUTLOOK|21Table 2 Selected technology scale-up and investment needs to 2030 under the 1.5-STECHNOLOGY20181.5-S IN 2030TOTAL INVESTMENT(USD)SHORT-TERM INVESTMENT REQUIREMENT(2018-2030)POWERSolar PVInstalled capacity0.4 GW17.1 GW10.8 billionBioenergyInstalled capacity0.2 GW0.4 GW0.8
135、 billionHydropowerInstalled capacity6.1 GW9.4 GW7.1 billionENERGY EFFICIENCYEnd-use sectors-13.6 billionGRID AND FLEXIBILITYTransmission(national)37 000 km50 000 km4.8 billionDistribution 412 000 km555 000 km3.6 billionStorage0 MW62 MW0.03 billionELECTRIFICATIONPublic electric vehicle chargers 10 00
136、0150 000 units 3.7 billionNote:km=kilometres.Overall,investments totalling up to USD 415 billion will be required until 2050 in IRENAs 1.5-S,more than two-and-a-half times higher than in the PES.Much of the additional investment(up to 40%)will be needed to build renewable power capacity,while one-th
137、ird will be in grids and flexibility.The remainder will be distributed across end-use sectors to increase energy efficiency,scale up electric vehicle charging infrastructure and support green hydrogen.When considering the total cost of the energy system(fuel costs,operations and maintenance,and fina
138、ncing costs)as well as externalities,the 1.5-S results in lower overall energy system costs and additional reduced external costs(Figure 7).22|MALAYSIA ENERGY TRANSITION OUTLOOKThe 1.5-S is more cost-effective than the PES and also reduces external costs related to health and the environment.Figure
139、7 Total energy system cost of transitioning towards the 1.5-S over the PES,2018 to 2050RecommendationsChapter 5 discusses four key recommendation categories for how to accelerate the energy transition in Malaysia.These include energy system and policy planning,regulatory and legal frameworks,technol
140、ogy and innovation,and financing.Selected key takeaways include:Utilise the long-term opportunities of the energy transition through the development of cohesive and integrated long-term energy planning strategies.Malaysia has taken important steps to transform its energy system to a more secure,clea
141、n and affordable one in the future.However,more attention is needed to integrate various policies for and beyond the power sector to achieve a more comprehensive and transparent long-term energy policy and planning strategy,aimed at energy transition and achieving climate targets.In the short term t
142、o 2030,investment of more than USD 26 billion is needed to expand solar PV capacity,electric vehicle charging infrastructures and renewable direct-use supply alone.0 50 100 150 200 250 300282 Costsavings237 Costsavings39 25 23%added cost savings(1.5-S RE90)27%added cost savings(1.5-S RE100)49 90 59%
143、added cost savings(1.5-S RE100)49%added cost savings(1.5-S RE90)Incremental energy system cost savingsReduced externalities-climate changeReduced externalities-outdoor air pollutionCumulative energy system cost savings1.5-S RE90 vs PESSavings from reduced externalities(low)Savings from reduced exter
144、nalities(high)Cumulative energy system cost savings1.5-S RE100 vs PESUSD billionMALAYSIA ENERGY TRANSITION OUTLOOK|23Develop a stronger regulatory framework by enhancing the LSS programme and a well-functioning FIT mechanism.Malaysias renewable regulatory framework needs to strengthen the e-bidding
145、system of the FIT with respect to project selection criteria and to overcome financing issues.To ensure the continued success of the LSS programme,regularity and periodicity are needed for a predictable investment environment,and solutions will need to be developed related to land use and grid conne
146、ction issues.Develop new policy mechanisms for increased participation of various consumers and open new renewable energy markets,including using models beyond the traditional PPAs.It is necessary to develop new policy mechanisms to increase economic viability and to encourage the participation of v
147、arious consumers and clarify the next steps in the rooftop solar PV market once the NEM 3.0 has ended.To ensure the success of the NEM programme,new business and financing models should be developed beyond the traditional PPA.These should be tailored to the economic viability of such systems for var
148、ious consumer groups,including the effective use of voluntary markets such as renewable energy certification and corporate sourcing,complemented by an enhanced time-of-use electricity tariff.Improve system flexibility for cost-effective integration of renewables.Studies show large potential for the
149、integration of renewables to the grid.Use of Malaysias significant renewable energy resource potential is limited by grid issues.An ambitious and long-term plan is needed,with an emphasis on specific regions,that shows the extent that renewables can be integrated with the transmission grid including
150、 solutions to overcome the current integration challenges as well as the flexibility solutions needed to enable this.Flexibility must be harnessed in all sectors of the energy system from power generation,transmission and distribution systems,to storage(both electrical and thermal)and increasingly t
151、o flexible demand (i.e.demand-side management and sector coupling with smart cooling and electric vehicle charging systems).In the short term alone(to 2030),the required investment needs total USD 4.8 billion in domestic transmission,USD 3.6 billion in distribution and USD 0.02 billion in energy sto
152、rage.Support enabling technologies in the end-use sectors with a focus on hard-to-abate sectors.Transforming how end-use sectors consume energy is crucial in enabling a net-zero energy system.Attention needs to be paid to challenging sectors,such as transport and industry.The government needs to con
153、sider programmes that support key enabling technologies in these sectors,for instance by focusing on electric vehicles in transport and related charging infrastructure.In industry,clean fuels will be required,including support for green hydrogen.Wider principles of supporting changes to use habits,w
154、ider structural change and circular economy should also be considered and supported through government policy.Accelerate renewable energy finance.Financing renewable energy investments remains an important barrier to accelerating Malaysias energy transition.There is a need to assess and understand t
155、he barriers and needs of the market to develop suitable financing products and models tailored to individual renewable energy technologies and to strengthen the capacity of national financing institutions to enable their use,coupled with a transparent electricity market design.Total energy sector in
156、vestment needs in the 1.5-S are up to USD 375 to USD 415 billion by 2050,more than twice those in the PES.The power sector makes up most of this investment requirement,accounting for almost 40%of total investment in the 1.5-S.Within the present decade,total power sector investment needs will reach a
157、t least USD 30 billion,or around 1.5 times more than in the PES.Finance schemes must consider the diverse nature of the investment need,ranging from financing large renewable power projects to grids and infrastructure,and from energy efficiency in homes and business to biofuel supply and electric ve
158、hicle chargers.24|MALAYSIA ENERGY TRANSITION OUTLOOK1.1 COUNTRY BACKGROUNDMalaysia is the third largest country in the Association of Southeast Asian Nations(ASEAN).The country is divided into two regions:West Malaysia also known as Peninsular Malaysia,which is located on the peninsula sharing its n
159、orthern border with Thailand and East Malaysia,which shares borders with Indonesia and Brunei.The states of Labuan,Sabah and Sarawak are situated in East Malaysia.Major cities such as Kuala Lumpur and Johor Bahru are located in Peninsular Malaysia,which is also the economic hub of the country.More t
160、han 32.4million people were living in Malaysia at the end of 2018(DOSM,2021).Between 2010 and 2021,Malaysias gross domestic product(GDP),in current international purchasing power parity(PPP),grew from USD 578 billion to USD 970 billion,reflecting average annual growth of 5.6%(World Bank,2021a).Malay
161、sias economy is expected to grow further in the coming years to transition the country to high-income level by 2024.So far,Malaysias strategy to grow its economy has been to diversify towards the manufacturing and service sectors.At the end of 2021,exports of goods and services accounted for around
162、69%of the total gross domestic product(GDP)(World Bank,2021b),whereas imports represented 61.8%(World Bank,2021c).Malaysias economic outlook is based on five-year plans,with the 12th Malaysia Plan 2021-2025 focusing on strengthening security,wellbeing and inclusivity,and advancing sustainability(GoM
163、,2021a).Box 1 The COVID-19 pandemics impact on the Malaysian economyThe first COVID-19 case in Malaysia appeared in early February 2020,followed by an outbreak in March.Subsequently the Movement Control Order was introduced,helping to reduce the spread of the virus.Although restrictions were eased i
164、n May to re-open businesses,a new wave of infections in September resulted in new lockdowns in various states until January 2021.A more stringent Movement Control Order was introduced in most states,international borders remained closed and overseas travel was restricted until March 2021.The pandemi
165、c impacted Malaysias economy,particularly vulnerable households.The economy contracted 5.8%in 2020 but recovered the following year with 3.1%growth in 2021(BNM,2022a).To respond to the pandemic,at the end of June 2021 the Malaysian government unveiled a USD 36 billion stimulus package(Shukry and Ngu
166、i,2021).Several measures in the package addressed clean energy investments,including:the undertaking of the fourth phase of Malaysias Large Scale Solar(LSS)auction scheme for a total of 1 GW of capacity;a total of USD 3.1 billion(MYR 13 billion)for the installation of LED streetlighting and the inst
167、allation of rooftop solar PV systems;and investments in new transmission lines.Within this package,planned investments in renewable energy capacity totalled USD 3 billion,with the investment size of projects ranging from USD 10 million to USD 50 million.Among the estimated benefits from these invest
168、ments are the creation of around 6 000 new jobs and a reduction of 1 million tonnes of carbon dioxide(CO2)equivalent emissions(EY,2021).INTRODUCTION1MALAYSIA ENERGY TRANSITION OUTLOOK|25Long-term economic and population projections indicate that Malaysias energy demand will continue to grow.In the p
169、ast two decades,energy demand has grown by around 3%per year,and growth is estimated to average around 1.4%per year until mid-century.Malaysia is traditionally a fossil fuel producer with large reserves of oil and natural gas.Although it remains a net exporter of gas and oil,its coal imports have be
170、en increasing to meet the growing energy demand.Meanwhile,renewable energy plays a marginal role in the total primary energy supply,representing around 3.4%as of 2019,with much of this supplied from traditional hydropower resources(ST,2022a).Malaysia has a huge untapped potential of renewable energy
171、 resources that can provide local and affordable alternatives to fossil fuels and help to diversify the energy mix.1.2 RENEWABLES READINESS ASSESSMENTThe International Renewable Energy Agency(IRENA)developed the Renewables Readiness Assessment(RRA)as a tool for carrying out comprehensive evaluations
172、 of the conditions for renewable energy deployment in particular countries.The RRA is a country-led,consultative process.It provides a venue for multi-stakeholder dialogue to identify challenges to renewable energy deployment and to devise solutions to existing barriers.The assessment presents gover
173、nments with short-and medium-term recommendations to guide the formation of new policies or the reform of existing policies to achieve a more enabling environment for renewable energy.For Malaysia,the RRA process has been led by the Government of Malaysia,with technical support from IRENA,and has gr
174、eatly benefited from stakeholder input.These stakeholders include the Ministry of Natural Resource,Environment and Climate Change(NRECC,then known as KeTSA),transmission and distribution utilities,power project developers,development partners,financial institutions,civil society and academia.The con
175、sultative process was initiated at the Government&Internal Stakeholders Consultation Session workshop held online on 3 September 2021.The workshop was based on a background paper describing the challenges and opportunities for renewable energy development.During this online event,experts discussed t
176、he state of renewable energy in Malaysia as well as various challenges and possible solutions.These insights informed a draft report presented in the follow-up validation Expert Consultation Workshop with all relevant industry players held on 9 September 2021,which was jointly organised by NRECC and
177、 IRENA.In addition,the analysis benefited from bilateral interviews with key stakeholders.The RRA process in Malaysia has produced the following outputs:an analysis of the existing policy environment and renewable energy market;identification of the critical and emerging issues associated with renew
178、able energy development;and a set of recommendations for taking advantage of the opportunities revealed by the policy analysis and extensive consultations with numerous stakeholders.The co-ordinated approach employed to produce this RRA helps in setting priorities,in consultation with bilateral and
179、multilateral co-operation agencies,financial institutions,and the private sector,for implementing the recommended actions.26|MALAYSIA ENERGY TRANSITION OUTLOOK1.3 REMAP AND FLEXTOOL ASSESSMENTThe Renewable Energy Roadmap or REmap process is a key pillar of IRENAs work in assessing the energy transit
180、ion.REmap focuses on energy system analysis to the year 2050 and assesses energy transition technologies with an emphasis on renewable energy and energy efficiency solutions.REmap consists of three levels of analysis:country(e.g.this report),regional(such as the second Renewable Energy Outlook for A
181、SEAN)and global(the World Energy Transitions Outlook or WETO)(IRENA,2022a,2022b).REmap utilises a toolkit that allows for the development of full energy balances covering the whole energy system,including energy demand,energy transformation and losses,and primary energy supply.The toolkit is based o
182、n modules that can be used depending on the specific requirements and data availability of each project.The toolkit is a parametric model where future energy demand and supply are assessed based on input parameters,such as activity levels,energy service penetration,technology shares and fuel mixes.I
183、t is a bottom-up approach.These are all exogenous inputs to the model,and energy demand is fully determined from those inputs through deterministic model equations.The toolkit does not rely on cost-optimisation nor multi-criteria methods.The IRENA REmap-FlexTool approach for the design and elaborati
184、on of the Malaysia Energy Transition Outlook aims to create technical pathways focusing on different scenarios and cases.A bottom-up approach analysis was carried out for details on the energy demand by end-use sector.This included a substitution analysis on technology options for renewables and an
185、assessment of associated costs,investments and benefits in close collaboration with country energy experts through a series of multi-stakeholder consultative workshops and expert meetings.The power sector was modelled using PLEXOS for capacity expansion,and a flexibility assessment was performed usi
186、ng IRENAs FlexTool product.More information on these models can be found in section 4.The process of developing the scenarios is a collaborative one involving close consultation with the governmentof Malaysia and other stakeholders in the country.Focal points are appointed,and IRENA engages stakehol
187、ders through a series of meetings,consultations and discussions todefine the scope and ambition and to discuss scenario results.Two expert consultation workshops on preliminary demand outlook results were held with government stakeholders and larger stakeholders in September 2021.In addition,the ana
188、lyses of end-use sectors,the power sector and hydrogen benefited from bilateral meetings and inputs with key stakeholders held in 2021 and 2022.These included the Energy Commission(Suruhanjaya Tenaga ST);the electricity suppliers Tenaga Nasional Berhad(TNB),Sabah Electricity Sdn Bhd(SESB)and Sarawak
189、 Energy Berhad(SEB);and the Malaysian Green Technology and Climate Change Corporation(MGTC).A power sector technical discussion was held on 17 March 2022,in which the majority of the stakeholders mentioned above participated.Additionally,IRENAs Director General,Francesco La Camera,presented early re
190、sults on the study during a keynote speech at the 5th International Sustainable Energy Summit(ISES 2022)in Kuala Lumpur in August 2022.Preliminary results also were presented at the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change(COP 27)held in Sharm El-Sh
191、eikh,Egypt in November 2022.MALAYSIA ENERGY TRANSITION OUTLOOK|272.1 ENERGY SECTORMalaysias total primary energy supply grew by 2.9%in 2019,to reach a total of 4.1 exajoules(EJ)(Figure8)(ST,2020a,2021a).All fuels recorded an increase except for coal,which showed a negative growth of 5.5%due to lower
192、 imports of coal.Natural gas accounted for 42%of the total primary energy supply in 2019,followed by crude oil,petroleum and others at 33.3%,coal and coke at 21.4%,and renewables at 3.4%.By 2019,renewables share in the total primary energy supply comprises mostly hydropower(2.3%)but also small contr
193、ibutions from other renewables(1.1%).Solar energy grew significantly between 2012 and 2020 with the rapid expansion of Solar PV installations in the country during the period.Although the use of biofuels is increasing rapidly,hydropower continues to make the largest contribution to renewables in the
194、 country,with a total supply of 93 PJ in 2020.Malaysias energy supply is still heavily dominated by fossil fuels.Figure 8 Malaysias total primary energy supply,by source,2010 to 2019 Source:ST,2021a.ENERGY CONTEXT20001720182019EJNatural gasCoal and cokeHydropower&ren
195、ewablesCrude oilPetroleum products&others28|MALAYSIA ENERGY TRANSITION OUTLOOKMalaysia has traditionally been a producer of fossil fuels,with large reserves of oil and natural gas.As of 2019,a total of 4.7 billion barrels of crude oil and condensate reserves existed in the country,spread evenly acro
196、ss Peninsular Malaysia,Sabah and Sarawak.1 The country also has large natural gas reserves.As of 2019,estimated natural gas reserves consisted of 9.9 trillion standard cubic feet(tscf)of associated gas and 69.3tscf of non-associated gas.2 Reserves in Sarawak accounted for more than half of this tota
197、l(58%or 45.8tscf,followed by Peninsular Malaysia(27%)and Sabah(the remaining 15%).For coal,Malaysia has reserves totalling 276 million tonnes of different coal types.3 Over the past decade,total natural gas production in Malaysia has ranged between 2.7 EJ and 3.0 EJ per year.Gas is typically exporte
198、d as liquefied natural gas,with exports reaching 1.2 EJ in 2019;0.04 PJ of gas was exported through pipelines.Imports reached 0.1 PJ for LNG,and 0.2 PJ for pipelines.Crude oil production reached around 1.25EJ in 2019.Malaysia is a net exporter of crude oil,with net export of around 0.1 EJ in 2019.Ho
199、wever,the country was a net importer of petroleum products(by 0.2 EJ)in 2019,with total imports of 17.6 million tonnes of oil equivalent.Malaysias refineries processed nearly 1.0 EJ equivalent of crude oil,of which two-thirds came from local production.Coal production reached around 3.4 million metr
200、ic tonnes in 2019.Malaysias coal imports have been increasing steadily and reached 0.8 EJ in 2019.Coal exports are negligible.The main sources of energy supply in Malaysia are oil and natural gas with equal shares followed by coal.Three-quarters of all oil supply is for the transport sector.Industry
201、,including non-energy uses,is the second largest oil consumer,accounting for 17%of the total oil supply.A small share of oil is also used for electricity generation in both centralised power plants as well as for self-generation.More than half of all natural gas supply is for industry,followed by el
202、ectricity generation which uses another 40%of the total.Coal is supplied mainly for electricity generation(more than 90%),with the rest used mainly in industry.Box 2 Energy subsidies in MalaysiaEnergy subsidies are a long-standing topic in Malaysia and have undergone several reforms in recent decade
203、s in an effort to balance government spending,natural resource use and economic growth while maintaining affordability for consumers.Energy subsidies in the country exist in several forms and have eaten up at least 7%of the annual GDP during the past decade(Figure 9)(UNSTAT,2022).The largest subsidi
204、es are in the transport sector,and consumer prices at petrol and diesel stations in Malaysia are among the lowest globally(Murugiah,2022).Government spending on petroleum subsidies represented between 10%and 26%of the government budget between 2004 and 2010;this continued to balloon due to rising oi
205、l prices,a weakening currency,rapid urbanisation and the 7%average annual growth in demand in oil-fuelled transport between 2010 and 2015(ERIA,2016;Sulaiman,Harun and Yusuf,2022;ST,2021a).1 1 barrel of oil equivalent is equivalent to 5.7 gigajoules(GJ)in lower heating value terms.2 Calorific value o
206、f natural gas is about 1 000 British thermal units(BTU)per standard cubic feet.3 1 tonne of coal steam coal has a lower heating value of around 25 GJ per tonne.MALAYSIA ENERGY TRANSITION OUTLOOK|29Box 2 Energy subsidies in Malaysia(continued)These energy-related fossil fuel subsidies can be better d
207、irected towards investing in renewables and energy efficiency.Figure 9 Estimated energy subsidies in Malaysia,2010 to 2022Source:IRENA analysis,estimated from MOF,2020,2022;PETRONAS,2020a.Fuel subsidies were abolished in late 2014 to take advantage of the decline in global oil prices and were follow
208、ed by a managed floating price mechanism;however,they were reinstated within a few years(MOF,2022;Ngui and Raghu,2014).Apart from petroleum,liquefied petroleum gas(LPG)cylinders used by the majority of the population for cooking are also largely subsidised.Both petroleum and LPG have been subject to
209、 fuel smuggling by neighbouring countries(Kojima,2016)Energy is also subsidised through low electricity tariffs in Malaysia,which are among the lowest compared to neighbouring countries(Global Petrol Prices,2022).For example,in the residential sector the first 300 kilowatt-hours(kWh)per month of use
210、 is being cross-subsidised at around half of the highest tariff(TNB,2022a)by the commercial and industrial consumer segments.While this is advantageous to low-consumption consumers,the subsidy is applied for all households regardless of their total electricity use.Electricity generation was largely
211、reformed through Malaysian Electricity Supply Industry(MESI)plans introduced in 2014 to improve the efficiency,governance and security of the power supply system.Typically,fuel supply costs for power plants are managed under supply agreements by TNB Fuel Services(TNBF)for coal and by Petroliam Nasio
212、nal Berhad(PETRONAS)Energy&Gas Trading(PEGT)for oil(OIES-UNITEN,2021).Prior to the liberalisation of the gas market in 2016,natural gas prices supplied from PEGT to power plants were regulated at lower market prices,where the foregone revenues reported also can be seen as a form of energy subsidy(MG
213、A,2017;PETRONAS,2020a).Gasoline,diesel and LPG subsidiesNatural gas foregone revenuesElectricity generation-related subsidies%of annual GDP(right y-axis)0%1%2%3%4%5%6%7%8%0020000022eEnergy-related subsidies(billion MYR)30|MALAYSIA ENERGY TRANSIT
214、ION OUTLOOKBox 2 Energy subsidies in Malaysia(continued)Today,fuel generation costs are largely governed through the Incentive-based Regulation(IBR)mechanism,where any additional costs or savings in power generation relative to the base tariff are revised every six months,then passed through to cons
215、umers via the Imbalance Cost Pass-Though(ICPT)mechanism,in the form of either a surcharge or a rebate to different consumer segments.Total energy subsidies were expected to rise sharply again in 2022 due to increases in oil,coal and natural gas prices globally as well as the pressure to maintain a l
216、ow electricity tariff for consumers to manage the cost of living(The Edge,2022).In conclusion,Malaysia has successfully managed to implement several important reforms across the energy industry in the past decade to maintain its energy security and fiscal balance;however,it continues to shield consu
217、mers from the real cost of energy,reflecting changes in global market prices.While targeted subsidies can ensure energy affordability to lower-and middle-income households and enable behavioural changes,it is also crucial that incentives and investments are directed towards long-term,productive and
218、sustainable uses.These include investments in renewables and energy efficiency and creating efficient and effective policy mechanisms to solve Malaysias energy“trilemma”of energy security,accessibility and sustainability.Energy consumptionMalaysias total final energy consumption in 2019 reached 2.8
219、EJ,equivalent to 65%of the total primary energy supply.Transport is the largest final user of energy,accounting for 38%of the total final energy consumption,followed by industry with 28%(Figure 10).When non-energy uses are included,industry becomes the largest final energy user with a total share of
220、 50%(DOSM,2021).Given that both the demand for heating and the per capita electricity consumption by households in Malaysia are still at low levels,the share of buildings in total energy demand is only around 12%.However,cooling demand is relatively high with more than 70%of all households owning an
221、 air conditioner(DOSM,2020a).The transport sector has dominated Malaysias final consumption in the last decade.Figure 10 Total final consumption in Malaysia,by sector,2010 to 200001720182019EJAgricultureNon-energy UseBuildingsTransportIndustrySource:ST,2022a.MALAYSIA
222、 ENERGY TRANSITION OUTLOOK|31Oil products represented the largest share in Malaysias total final energy consumption in 2019,at 66%.Three-quarters of all oil is used by transport,with the rest used in industry.Natural gas follows oil with a 29%share in total final consumption.Meanwhile,coals share wa
223、s only 3%,used mainly for the power sector.Industry is the main user of all natural gas and oil for process heat generation.Direct use of renewables in Malaysia is minimal with only around a 1%share.This mostly reflects the use of biodiesel,which accounts for 1.5%of the total final energy consumptio
224、n in the transport sector.Electricitys share in total final consumption is 20%.It is the main source of energy in residential and commercial buildings(more than 80%of the total),and their total demand covers half of Malaysias total electricity demand.The other half is used by the industry sector.2.2
225、 ELECTRICITY SECTORElectricity supply and generationThe installed power generation capacity in Malaysia totalled 36.2 gigawatts(GW)in 2019(ST,2021a).This is dominated mainly by coal and natural gas,while renewables represent 22%of the total installed capacity.The regional breakdown of power installe
226、d capacity is shown in Figure 11,with Peninsular Malaysia accounting for 78%of the total.In Sarawak,hydropower is the dominant electricity supplier,representing 70%of total capacity.Of the total 7.8 GW of renewable energy capacity installed in Malaysia as of 2019,1.2 GW was installed through three k
227、ey schemes:the Feed-In Tariff(FIT),the Large Scale Solar(LSS)programme and the Net Energy Metering(NEM)mechanism.Malaysias installed power generation capacity remains dominated by fossil fuels,with hydropower accounting for most of the renewable capacity.Figure 11 Total installed power capacity by r
228、egion,20190 5 10 15 20 25 30 35 40Peninsular MalaysiaSarawakSabahTotalGWHydropowerSolarNatural gasBiogasCoalOthersDieselBiomassSource:ST,2022a.32|MALAYSIA ENERGY TRANSITION OUTLOOKIn 2021,Malaysias total installed renewable energy capacity reached around 8.9 gigawatts(GW)according to IRENA statistic
229、s(Figure 12)(IRENA,2021a).Of this,68%was hydropower capacity connected to the transmission grid.Over the past decade,the countrys total installed hydropower capacity has tripled to 6 211 MW,although only 14 MW of capacity was added in 2021.A small capacity of mini hydropower plants also exists in of
230、f-grid systems.Grid-connected solar photovoltaic(PV)capacity reached 1 780 MW in 2021,up from 1 493 MW in 2020.More than 7 MW of this capacity was in off-grid systems in 2021.The installed capacity of solid biofuels was large between 2013 and 2016 but has since been declining,reaching 774 MW by the
231、end of 2021.By comparison,biogas systems are increasing rapidly with a total installed capacity of 120 MW in 2021.Hydropower has dominated the renewable installed capacity,but solar has become increasingly promising in the last few years.Figure 12 Malaysias total installed renewable energy capacity,
232、by source,2010 to 2021Source:IRENA,2021a.In Malaysia,electricity capacity is shared between independent power producers(IPPs)and the power generation arm of Tenaga Nasional Berhad(TNB),Malaysias largest electric utility company.Besides generation,TNB is also responsible for the transmission and dist
233、ribution of electricity.The power is procured via the Single Buyer units of TNB in Peninsular Malaysia,via Sarawak Energy Berhad(SEB)in Sarawak and via Sabah Electricity Sdn.Bhd.(SESB)in Sabah and Labuan(SESB is owned 80%by the TNB and 20%by the Sabah State Government).The IPPs in Peninsular Malaysi
234、a are licensed by the government to generate electricity,and they sell the power according to the terms set out in the power purchase agreements(PPAs).0200001920202021GWSolid biofuelsRenewable municipal wasteBiogasSolarHydropowerMALAYSIA ENERGY TRANSITION
235、OUTLOOK|33In 2019,IPPs accounted for three-quarters of the total installed electricity generation capacity in Peninsular Malaysia(21.2 GW).All coal generators and a large share of natural gas generators were IPPs,whereas nearly all hydropower plants belonged to TNB.In Sabah,IPPs(1.1 GW)represented n
236、early 60%of the grid-connected capacity,with the rest split between SESB(0.4 GW)and co-generation,self-generation,FIT and LSS plants.In Sarawak,SEB owned 5.2 GW of the total generation assets,with the remaining 0.5 GW split between co-generation and self-generation plants.Electricity generation in M
237、alaysia totalled 176 terawatt-hours(TWh)in 2019(Figure 13).Electricity demand has grown at an average annual rate of 5%over the past decade.While hydropowers share in the electricity supply increased from 6%to 15%between 2010 and 2019,coals share increased from 34%to 43%,becoming the countrys larges
238、t source of electricity supply.The total share of renewables was around 17%in 2019;however,this share has likely increased since then as a result of the growth in renewable capacity installations in the 2020-2021 period through various schemes.Fossil fuels account for around 80%of Malaysias total el
239、ectricity generation,although this share has fallen from around 90%in 2010.Figure 13 Malaysias total electricity output,by source,2010 to 2019Source:ST,2022a.The electricity consumption by region is proportionate to the installed capacity and is highest in Peninsular Malaysia(Figure 14).The current
240、reserve margin(percentage of available unused capacity of an electrical power system to meet its peak demand)in Peninsular Malaysia reached 38%in 2019 and 52%in 2021;according to the regions master plan to 2039,the aim is to reduce this to 21%(ST,2021b).The reserve margin declined in Sabah and Labua
241、n,falling from 29%to 23%between 2018 and 2019(ST,2020b).0 20 40 60 80 100 120 140 160 180 2002000019TWhHydropowerGasCoalOilOthers34|MALAYSIA ENERGY TRANSITION OUTLOOKElectricity demand in Peninsular Malaysia is proportionally larger than in Sabah and Sarawak.Figure 1
242、4 Total electricity consumption by region,20100120140Peninsular MalaysiaSarawakSabahTWhResidentialTransportAgricultureIndustryCommercialSource:ST,2022a.Transmission and distribution gridMalaysia has three major electricity grids:the national grid on Peninsular Malaysia,the Sabah grid(on B
243、orneo)and the Sarawak grid(also on Borneo).The transmission voltage networks include grids of 500 kilovolts(kV),275 kV and 132 kV.The supply frequency is 50 hertz(Hz).The utilities and boundaries for each of the three grids is shown in Figure 15,where TNB is responsible for Peninsular Malaysia,SESB
244、for Sabah and SEB for Sarawak.The Malaysian electricity grid can be broadly broken down into three major grids.Figure 15 Electricity grids and utility distribution in MalaysiaTNBSEBSESBPeninsular MalaysiaSarawakSabahDisclaimer:This map is provided for illustration purposes only.Boundaries and names
245、shown on this map do not imply the expression of any opinion on the part of IRENA concerning the status of any region,country,territory,city or area or of its authorities,or concerning the delimitation of frontiers or boundaries.MALAYSIA ENERGY TRANSITION OUTLOOK|35The total length of the TNB transm
246、ission grid is 23 082 kilometres,with a 132 kV network covering around half of the total grid.The transmission grid has a total of 407 sub-stations,with a combined capacity of 115 120 megavolt amperes(MVA).The TNB distribution grid covers a total 352 565 kilometres of overhead lines and 307 474 kilo
247、metres of underground cables.A total of 81 327 sub-stations serve the distribution grid,with a combined capacity of 114 089 MVA.The SESB transmission grid has 66 kV lines.The total length of the grid is 2 288 kilometres,and a 132 kV grid network represents nearly the entire capacity.A total of 45 su
248、b-stations serve the grid with a combined capacity of 5 049 MVA.The SESB distribution grid uses mainly overhead lines with a total length of 9 465kilometres.Underground cables cover a total length of 1 109 kilometres,and the grids 7 957 sub-stations have a total capacity of 5 440 MVA.The SEB transmi
249、ssion grid has a total length of more than 4 400 kilometres,with 275 kV lines covering more than 2 800 kilometres of this.A total of 37 transmission sub-stations have a combined capacity of 10 246 MVA.The SEB distribution grid has 26 236 kilometres of overhead lines and 8 769 kilometres of undergrou
250、nd cables.A total of 13 824 distribution sub-stations have a combined capacity of 9 600 MVA.The distribution grid voltages of Malaysia comprise 33 kV,11 kV and 415/240 volts(ST,2021a).Electricity tradingThe national grid is connected to Thailands grid to the north with a total capacity of 380 MW(com
251、missioned in 2002),comprising a 300 kV high-voltage DC line with 300 MW capacity from Gurun to Khlong Ngae and a 132 kV AC line with 80 MW capacity from Bukit Ketri to Sadao.There is also interconnection to Singapores main grid to the south with a total capacity of 450 MW(commissioned in 1985)that h
252、as since been upgraded to two 550 MVA of high-voltage AC.The total interconnection capacity of Malaysia is only around 2%of the total installed capacity.The ASEAN Interconnection Masterplan Study(AIMS)III covering the period until 2040 updates the previous version and emphasises that around 20 GW of
253、 interconnection capacity would be needed by 2025 in the Southeast Asia region(USAID,2021).In September 2014,the governments of the Lao Peoples Democratic Republic(Lao PDR),Malaysia,Thailand and Singapore released a joint statement to initiate a pilot project for facilitating cross-border electricit
254、y trade.Power would flow from Lao PDR to Singapore via Thailand and Malaysia.The four countries agreed to form a working group to assess the viability of trading up to 100 MW through the existing interconnector capacity.The commitment to the implementation of the joint statement plan was reaffirmed
255、in November 2020(MTI,2020).Phase 1 commenced on 1 January 2018.Malaysia purchased electricity from Lao PDR through Thailand as a wheeling country based on a predefined price and quantity.The second phase expanded Lao PDRs electricity export from 100 MW to a maximum of 300 MW.Commenced on 23 June 202
256、2,Singapore signed power purchase agreement with Lao PDR,that will allow import up to 100 MW of renewable hydropower from Lao PDR to Singapore via Thailand and Malaysia using existing interconnection.As the only multilateral power trade agreement in the Southeast Asia region,the pilot project demons
257、trated that such trade in the region is possible.Thailand and Malaysia are conducting a joint study to increase the capacity of interconnection between the two countries.One option they are considering is developing two new interconnections:a 300 kV line with a total power transfer capacity of 300 M
258、W and a 132/115 kV line with a total capacity of 100 MW.In addition,a new 600 MW interconnection line with Indonesia has been proposed and was expected to be commissioned after 2021,although the project was postponed as Indonesia decided to focus on its domestic priorities.The SEB has plans to expan
259、d transmission towards the hydro resource rich regions of Baleh and Murum.This expansion would create an opportunity for electricity trade with Indonesia and Brunei Darussalam.36|MALAYSIA ENERGY TRANSITION OUTLOOK2.3 INSTITUTIONAL STRUCTUREKey institutionsThe Economic Planning Unit of the Prime Mini
260、sters Department is responsible for development planning,which builds on the close engagement of various stakeholders from government entities(at both the federal and state levels),businesses,civil society and other relevant actors.The Ministry of Natural Resources,Environment and Climate Change(NRE
261、CC),formerly known as the Ministry of Energy and Natural Resources(KeTSA),manages the supply of electricity,with the objective of optimising renewable energy and energy efficiency to ensure reliable,affordable and sustainable electricity supply services.The ministry develops related policies,strateg
262、ies and legislation and enforces laws.The Energy Commission(Suruhanjaya Tenaga,ST)is responsible for regulation of all electricity and gas issues in Peninsular Malaysia and Sabah.The ST reports to NRECC and is responsible for policy matters concerning the supply of energy;the generation,transmission
263、,distribution and the use of electricity and gas;promoting renewable energy use and energy efficiency measures and research in these areas;and safeguarding the operations of competition and fairness and efficiency in the energy markets.The ST also works closely with the Sustainable Energy Developmen
264、t Authority(SEDA),which was formed under the Sustainable Energy Development Authority Act of 2011 to administer and manage the implementation of the FIT under the Renewable Energy Act of 2011(GoM,2011).Structure of the power sectorSince Malaysias independence in 1957,the power system has been underg
265、oing continuous change.The following institutions have been established:Central Electricity Board(1949)National Electricity Board(1965)Tenaga Nasional Berhad(1990),the successor to the National Electricity Board Suruhanjaya Tenaga(2002),taking over the role of the Department of Electricity and Gas S
266、upply.Malaysias market is a managed model in where the generation sector is open for participation,consisting of large independent power producers and state-owned utilities.The upstream market is more competitive,allowing the participation of both local and foreign power producers.For renewable ener
267、gy generation projections,there is a competitive bidding process through numerous schemes further elaborated in the report.The Malaysia Electricity Supply Industry(MESI)1.0 initiative,introduced in 2009,aimed to transform the power sector between 2010 and 2014 through an improved tariff mechanism,fu
268、el supply and security,and governance for the effectiveness of the power sector.As a result of the MESI 1.0 initiative,the Single Buyer model was established in Peninsular Malaysia within the TNB in September 2012 based on the Electricity Supply Act(1990)(OIES-UNITEN,2021).According to this model,th
269、e Single Buyer is responsible for the procurement of electricity from all generators,and it also plans for the dispatch based on a least-cost approach by considering constraints in the generation and transmission capacity in line with the Grid Code.MALAYSIA ENERGY TRANSITION OUTLOOK|37To supplement
270、the Single Buyer Rules,the ST introduced the New Enhanced Dispatch Arrangement(NEDA)system in 2015,which allowed merchant generators to supply power to the grid without necessarily entering a PPA.NEDA is designed to enhance short-run competition(based on scheduling and dispatch)and cost efficiency a
271、s well as to incentivise the power generators to be more efficient;it arranges the scheduling and dispatch of generation used by the Single Buyer(ST,2020b).According to NEDA,power plant generators bid daily against each other based on their variable costs following the rules set by the ST.In May 201
272、9,NEDA started including solar power plants as a new category.The competition takes place under PPAs,which IPPs secure with TNB for a contract duration of 21 years for gas-fired power plants and 25 years for coal-fired plants.The contracts require power plants to be always available.The payments by
273、the Single Buyer to generators under the PPA arrangement include an energy payment and a capacity payment.For renewable energy PPAs that are applicable for the FIT and LSS mechanisms,the take-and-pay principle is applied for a period of 21 years.This means that the off-taker accepts the supplied ele
274、ctricity whenever it is available.In current renewable energy PPAs under the LSS mechanism,capacity payment is not applied since solar is not a dispatchable resource.In PPAs there are no linkages to inflation or currency changes for a fixed period of 21 years.In September 2019,the Malaysian governme
275、nt approved the 10-year MESI 2.0 master plan with the objective to open the market to diversity and competition to improve its flexibility and cost efficiency and to empower consumers(ST,2020b).Key reform measures of the MESI 2.0 include:to allow generators to source for their own fuel to optimise c
276、ost;move from the PPA regime to capacity and energy markets;establish a third-party access framework and network charges for the grid to allow third parties to use the infrastructure;and,facilitate green energy producers and consumers.A key objective is to have market-based competition,whereas in th
277、e current model which sees competition exists only at the generation level.An additional objective is to promote trade across borders with neighbouring ASEAN countries to enhance the efficiency of operations.In November 2021,a Green Electricity Tariff was launched,where subscribers can opt in to use
278、 electricity generated from renewable resources by providing an additional payment per kWh;subscribers also receive a renewable energy certificate(Aziz,2021).Additionally,the government announced the Corporate Green Power Programme(CGPP)in late 2022,where the private sector can undertake a corporate
279、 PPA with a solar PV producer,further incentivising the uptake of renewables(ST,2022b).The CGPP also encourages the trading of renewable energy certificates between both parties,fulfilling their environmental,social and corporate governance(ESG)commitments.2.4 STRATEGIC FRAMEWORKMalaysia has impleme
280、nted several major energy policies.The Electricity Supply Act was introduced in 1990 and then amended in 2015.The Energy Commission Act was introduced in 2001 and later amended in 2010.The National Renewable Energy Policy and Action Plan was introduced in 2010,the same year as the Malaysia New Energ
281、y Policy.The SEDA and Renewable Energy Acts followed in 2011.In 2015,the National Energy Efficiency Action Plan was introduced.38|MALAYSIA ENERGY TRANSITION OUTLOOKFor bioenergy,Malaysia has implemented a biodiesel blending programme in the transport sector under the National Biofuel Policy enforced
282、 in 2006.Blending biofuels for road transport started in 2010,and in five years the biodiesel blending rate reached 7%.Malaysias biodiesel now caters to both the domestic market and the export market,and a blending mandate of B10(10%biodiesel)is used for the road transport sector and B7 for industri
283、al use(Wahab,2021).A B20 blending target was planned in 2020 but was delayed due to supply chain issues that were further exacerbated by the COVID-19 pandemic.A wider National Biomass Industry Action Plan was also developed,aiming for energy-intensive industries to increase the share of biomass in t
284、heir energy use(GoM,2013).The Green Technology Master Plan,introduced in 2017,covers the period to 2030.In this plan,Malaysia aims to increase the renewable energy capacity in the total generation mix to 20%by 2020(2 080 MW,excluding large hydropower),23%by 2025 and 30%by 2030(4 000 MW).The Malaysia
285、 Renewable Energy Roadmap(MyRER),launched at the end of 2021,outlines strategies and provides an action plan to reach the target of 40%renewable energy installed capacity or 18 GW by 2035;under its“New Capacity Target”Scenario,7.3 GW is projected to be solar PV(SEDA,2021a).Box 3 Malaysias climate po
286、licy and net zero targetsMalaysias Intended Nationally Determined Contribution(INDC),submitted to the United Nations Framework Convention on Climate Change(UNFCCC)in 2015,aimed for a 45%reduction in greenhouse gas emission intensity(tonnes of CO2 emissions per unit of GDP)by 2030 relative to 2005.Th
287、is is split between an unconditional target of 35%and a conditional target of 10%if the country receives climate finance,technology transfer and capacity building from developed countries(GoM,2015).In July 2021,the cabinet approved raising the unconditional target to 45%,representing an increase of
288、10 percentage points from the previous version of the NDC(GoM,2020a,2021b).In September 2021,Malaysias Prime Minister announced a goal for the country to become carbon neutral as early as 2050,alongside a commitment to stop building new coal-fired power plants post 2040(Salim,2021).In 2016,the Malay
289、sian state-owned oil and gas company,PETRONAS,aimed to become a net zero emitter of greenhouse gases by 2050,and the company also announced that it will increase renewable energy investments.In a press release issued on 5 November 2020,PETRONAS stated that it will continue to intensify its efforts t
290、owards reducing Scope 1 and Scope 2 emissions from its assets by delivering continuous improvements in operational excellence and by deploying innovative operations and technologies(PETRONAS,2020b).Malaysias second largest lender by assets(CIMB)has committed to phase out coal from its portfolio by 2
291、040 and to end funding for new coal mines and generators as early as 2021(Reuters,2020).In August 2021,TNB announced its aspirations to become net zero by 2050,by adopting a sustainable pathway to reduce its emission intensity by 35%and to halve its coal generation capacity by 2035(TNB,2021a).Additi
292、onally,the national investment arms such as Permodalan Nasional Berhad(PNB)and Khazanah Nasional have committed to net zero targets by 2050,aiming for greener portfolios and investments(Khazanah,2022;PNB,2022).On 9 December 2022,Bursa Malaysia launched the Bursa Carbon Exchange(BCX)as a voluntary ca
293、rbon market aimed at enabling companies to trade voluntary carbon credits from climate-friendly projects and solutions to offset their emission footprint and meet climate goals.The first auction is expected to start in March 2023;projects permitted to be traded include nature-based and technology-ba
294、sed solutions that help avoid,reduce or remove GHG emissions(Bursa Malaysia,2022).MALAYSIA ENERGY TRANSITION OUTLOOK|39Each utility company in Malaysia has developed its own plans for the coming years.TNB in Peninsular Malaysia has set a target for 20%renewable energy capacity by 2025(ST,2021b)and h
295、as announced its aspirations to become net zero by 2050,by adopting a sustainable pathway to reduce its emission intensity by 35%and halve coal generation capacity by 2035.Other goals from the government include the use of the Incentive-Based Regulation(IBR)mechanism(a tariff price-setting mechanism
296、 for affordable and secure energy supply in a deregulated market),an optimal generation expansion plan(to improve service reliability at minimal cost),least-cost dispatch(to promote market liberalisation to reduce transmission and distribution costs)and fuel portfolio diversification(to balance affo
297、rdable electricity and energy security).Renewable energy generation in Peninsular Malaysia covers solid waste,small hydropower,biomass,biogas,geothermal and solar.Large hydropower plants(more than 100 MW capacity)are not considered to be renewable energy.TNBs target of 20%renewable energy capacity b
298、y 2025 focuses on increasing solar generation capacity while also creating new business opportunities for big companies,small and medium enterprises,microbusinesses and households.The latest generation development plan of Peninsular Malaysia,covering the 2021-2039 period,aims for a 31%share of renew
299、able energy capacity by 2025,raising the initial target of 20%(excluding large hydropower plants)(ST,2021b).The renewable share in the capacity mix is projected to increase to 40%by 2035.This will require an additional 1 178 MW of new capacity to be installed in Peninsular Malaysia by 2025 of which
300、the majority will be solar PV followed by 2 414 MW between 2026 and 2035.The total installed renewable energy capacity would reach 8 531 MW by 2025 and 10 944 MW by 2035.Under the plan,the share of coal is estimated to decline from 37%in 2021 to 22%in 2039,while natural gas share is expected to incr
301、ease slightly from 45%to 47%.The 31%share of renewables would include a 26%contribution from Peninsular Malaysia(from a total of 8 531 MW of capacity)and 5%from East Malaysia.Although the energy sector has perceived this to be an ambitious target,in view of the countrys significant resource potentia
302、l much more could be done which will also provide investment opportunities.Sabah grid goals are slightly different,as the grid faces limitations from a significant reliance on natural gas by an ageing fleet.There are also challenges to renewable energy development and planning.The government highly
303、subsidises the electricity supplied in the grid(further discussion can be found in Box 2 on Energy Subsidies in Malaysia).The Sabah grid aims to develop solutions to overcome these challenges in order to ensure a secure supply of electricity to meet growing demand.The Sabah grid aims to improve the
304、electricity supply with grid expansion and interconnection investments.Additionally,it seeks to increase the share of renewables,notably solar PV plants,which will also help to reduce the greenhouse gas emission intensity.As implemented in Peninsular Malaysia,the Sabah grid aims to introduce the IBR
305、.In addition,in 2019 the energy ministry announced the target of achieving a 20%renewable energy share in the Sabah grid by 2025 as well as savings of 8%through energy efficiency initiatives by the same period.Specific to the Sabah grid,planning for micro-grid frameworks and project monitoring for r
306、ural electrification are also part of the initiatives(ST,2019).2.5 LEGAL,REGULATORY AND POLICY FRAMEWORKFigure 16 provides an overview of the renewable energy regulatory framework in Malaysia and the available financing instruments to enable their implementation.40|MALAYSIA ENERGY TRANSITION OUTLOOK
307、Several renewable energy installation types and financing schemes are available for various renewable energy sources in Malaysia.Figure 16 Overview of the renewable energy regulatory framework and the available financing instruments in MalaysiaSource:SEDA,2021a.Feed-in tariff mechanismBetween 2001 a
308、nd 2008,the impact of the Small Renewable Energy Power(SREP)Programme was limited.As a result,the Ministry of Energy,Green Technology and Water(then KeTTHA,now NRECC)developed a more comprehensive programme that resulted in the National Renewable Energy Policy and Action Plan(NREPAP).Two bills were
309、drafted subsequently in 2011,namely the Renewable Energy Act and the SEDA Act.These acts led to the implementation in 2011 of the feed-in tariff mechanism,which is executed by the SEDA.The FIT was initially established in Peninsular Malaysia,but its scope was subsequently expanded in early 2014 to i
310、nclude Sabah and Labuan.The FIT is financed by the Renewable Energy Fund established under the Renewable Energy Act.The fund is generated through the collection of a 1.6%surcharge in the electricity bill(consumers in Sarawak are excluded),which is also the current FIT rate.Domestic consumers whose m
311、onthly electricity use is below 300 kWh are exempted from contributing to the Renewable Energy Fund;otherwise surcharges are imposed on all residential,commercial and industrial sectors.The contribution is mandatory only during times when the FIT mechanism is in place.The FITs range over a 21-year p
312、eriod for solar PV plants and mini hydropower plants,and 16 years for biomass and biogas.Existing renewable power plants under the existing SREP under the Renewable Energy Act 2011 were allowed to convert to the current FIT mechanism.FIT rates have changed on the basis of annual degression rates sin
313、ce 2013.The annual degression rate for solar PV is 10%and has been in effect since 2014 for capacity below 24 kW.FIT eligibility criteria limit the total installed capacity of power plants to 30 MW.Solar PVBiogasBiomassSmall HydroSelf-Consumption(SELCO)Net Energy Metering(NEM)Large Scale Solar(LSS)F
314、eed-in TariffCashBank Loan/Credit Card Solar Power PurchaseAgreement Solar Leasing MALAYSIA ENERGY TRANSITION OUTLOOK|41Throughout the programme,several improvements have been made:Increase in FIT bonus rates for biomass and biogas starting in 2014 based on further analysis and to reflect evolving p
315、rice dynamics Revised degression for solar PV starting in 2014 Establishment of a FIT for geothermal projects for up to 30 MW,starting in 2015,to support scaled-up development of this largely untapped resource in Malaysia Launch of the net metering(NEM)programme in January 2016 to complement Malaysi
316、as solar PV FIT policy(the FIT for solar PV was later replaced entirely with the NEM programme at the end of 2017).By 2021,SEDA had awarded feed-in tariff(FIT)quotas totalling 174 672 megawatts(MW)for biogas,biomass,and small hydro resources to 34 companies.In 2021 alone,projects under the FIT had g
317、enerated a total of 1.35 TWh.This included 33%solar PV,12%biomass,34%biogas and 21%small hydropower.Large Scale Solar(LSS)programmeThe LSS programme,based on a bidding process,was introduced in 2016 by the ST with a total quota of 1 250 MW allocated for the 2017-2020 period.Of this,250 MW was direct
318、ly awarded under the fast-track programme.The remaining 1 000 MW falls under the bidding mechanism.By the end of 2022,there were four rounds of LSS bidding that had taken place.During the first 50 MW-size project,several challenges occurred during construction and operation,including changes in requ
319、irements during bids and construction,and delays in getting approval from authorities.Additionally,fluctuations in the local currency led to higher project costs(Abdullah et al.,2019),usually as a result of higher material procurement costs.After the second round of the LSS,there were difficulties i
320、n obtaining the development order,as the multiple processes within state governments delayed project implementation.The government has taken actions to address issues experienced during the first and second rounds of the LSS.In August 2017,the ST announced the bid open price for LSS solar PV plants
321、for 2019-2020.The results showed that the lowest bid received was in the 10 MW to 30 MW category,with a tariff of USD 0.079(MYR 0.3398)per kWh(ST,2021c).The first round of the LSS tender was designed in similar fashion but with the high end of the categories reaching up to 50 MW capacity in Peninsul
322、ar Malaysia and 10 MW in Sabah/Labuan.Of the total capacity awarded in the first and second rounds of the LSS,most was located in Perlis,which has higher solar irradiation compared to the rest of the country.The third round of the LSS attracted 112 bids,for more than 6.73 GW of generation capacity(o
323、versubscribed above 500 MW),and with a lowest solar energy price of USD 0.042(MYR 0.178)per kWh from a 100 MW scale project in 2019.However,the ST shortlisted only five bidders,for a total generation capacity of 490 MW(ST,2021c).The fourth round of the LSS took place in March 2021.The bid where plan
324、ts are planned to be commissioned in 2022 and 2023 attracted projects with bids as low as USD 0.043(MYR 0.177)per kWh.A total of 30projects were pre-selected by the government with a combined 823 MW of electricity generation capacity(PV magazine,2021).A summary of LSS programme outcomes is provided
325、in Figure 17.42|MALAYSIA ENERGY TRANSITION OUTLOOKSeveral rounds of the Large Scale Solar programme have taken place,with increasing capacity awarded.Figure 17 Large Scale Solar(LSS)program and lowest bid prices in Malaysia,2016 to 202000.010.020.030.040.050.060.070.080.090.40050060070080
326、09001st Round20162nd Round20183rd Round20194th Round2020USD/kWhMWCapacity awarded(MW)Lowest bid price(USD/kwh)Source:ST,2022b.The continuing decline in prices achieved in the four distinct bidding LSS rounds showed that renewables are gaining a business case in Malaysia.The last two rounds of LSS wh
327、ere oversubscribed by up to 5 and 13 times from the original auction capacity,showing that there is a great interest from project developers and further expansion potential for utility-scale solar(IRENA,2022c).The tendering guidelines of the LSS have improved greatly,and more criteria are now includ
328、ed to ensure that projects are successfully delivered in time for their commercial operation date.Details on the auction design and results in Malaysia can be found in IRENAs publication Renewableenergy auctions:Southeast Asia(IRENA,2022c).Net Energy Metering(NEM)programmeThe NEM is executed by the
329、energy ministry and regulated by the ST,with SEDA as the implementing agency.A total of 500 MW of capacity was planned to be reached by the end of 2020 by domestic,commercial and industrial users.The NEM prioritises self-consumption and any surplus to be exported and sold to the utility at a displac
330、ed cost.Initially,progress in the NEM was slow.As of late 2018,the NEM scheme had received 520 applications with a total capacity of 27.8 MW,and 223 projects with a total capacity of 9.0 MW had started operation.This left a balance of 472.2 MW of NEM quota available until the end of 2020.In October
331、2018,NEM 2.0 was announced,which allowed excess solar electricity to be compensated on a one-on-one basis instead of the displaced cost,effective in early 2019.NEM 2.0 was aimed at TNB customers only,including agricultural consumers(SEDA,2018).At the start of 2020,a total of 94 MW of new rooftop sol
332、ar PV capacity was installed until the end of November 2019,far more than the 14 MW installed capacity achieved in the first NEM program that ran between 2016 to 2018.The total installed capacity was split into 75 MW for industrial installations,25 MW for commercial systems,7.7 MW for residential sy
333、stems and 130 kW for agricultural projects(Bellini,2020).MALAYSIA ENERGY TRANSITION OUTLOOK|43The NEM 3.0 programme was announced in December 2020 and is effective from the beginning of 2021 until the end of 2023,with a total quota of 500 MW.NEM 3.0 introduced three new initiatives:NEM Rakyat(residential customers),with a total capacity of 100 MW;NEM GoMEn(Government Ministries and Entities),aimed