Development of Solar Energy and Present Policies in ... - IEEE Xplore

2011 IEEE First Conference on Clean Energy and Technology CET

Development of Solar Energy and Present Policies in Malaysia I

* I I I K.H. Solangi , 2T.N.W. Lwin, 3N.A. Rahim, M.S. Hossain, R. Saidur, H. Fayaz I Department of Mechanical Engineering, 2Faculty of Economics and Administration, 3UMPEDAC Research Centre, Faculty of Engineering, University of Malaya, Kuala Lumpur, Malaysia * E-mail: [email protected]

Abstract

-

depending on traditional energy sources. It is likely to be one of the more promising sources of clean energy in the coming decades [3]. Solar irradiation is highly abundant, thus solar power technology, considered one of the more economic and able to provide about 10% of the world's electricity by 2050, is expected to provide most of world electricity demands (energy experts believe that over 50% and 80% of alI electricity in 2050 could be generated by renewable energies) [4].

Solar energy is regarded a clean renewable energy

source, with great potential for environment-friendly electricity generation.

Properly

Malaysia has a

harvested,

it

can

optimally

benefit.

particularly abundant source of renewable

2 2 energies; for solar, as evidenced by a 4.21kWh/m to 5.56kWh/m 2 average daily radiation with a high of 6.8kWh/m (purportedly in August

and

November). Present installed capacity

totaling

Southeast-Asia Malaysia (comprising Peninsular Malaysia and East Malaysia separated by the South China Sea) receives 2 2 between 4.21kWhlm and 5.56kWhlm annual average daily solar irradiation. Her highest solar radiation is estimated to be 2 6.8kWhlm in August and November. RE development thus garnered attention, its application dramaticalIy increased in the past few years [5]. Of Malaysia's 20,493MW instalIed capacity, the present energy reserve margin for Peninsular Malaysia is 47%. With expected 4% average growth annualIy, maximum demand for electricity is expected to be 23,099MW in 2020, supposedly more than double the present demand. Every 1% present growth in gross domestic product (GOP) is accompanied by growth in energy demand (and associated greenhouse gas emissions) of 1.2-1.5 percent. Along with growth of industrialization and modernization, electricity consumption increased from 19,932GWh in 1990 to 87,164GWh in 2007, the 337% increase marking rapid economic growth (especialIy between 1990 and 2000), when demand for electricity doubled [6-8]. To meet increasing demand, Malaysia'S visualization of being a developed country by 2020 [9] estimates 190MWp capacity of cumulative solar energy instalIed by then; see Table I.

20,493MW, is estimated to reach 23,099MW maximum-demand capacity in 2020, by when 190MWp of cumulative solar energy would have been installed. Incentives should be offered to boost solar energy's economic feasibility. This paper examines the Malaysian government's various policies on, and implementation of, solar energy technology. It suggests methods and policies for provision of safe, cost-effective, quality energy, and discusses environmental sustainability and diversification of solar energy resource.

Keywords: solar energy, photovoltaic, thermal, Malaysia

I.

INTRODUCTION

Renewable energy (RE) sources, because they are clean energy, are potential candidates for sustainable-energy addressing of increased concerns for greenhouse global warming and gradual depletion of fossil fuels [1, 2]. Among them, solar energy has the greatest potential for environment friendly electricity generation and provides accessible modem energy to billions of people in developing countries still

978-1-4577-1354-5/11/$ 26.00 2011 © IEEE

115


Table 1: RE Cumulative Installed Capacity in MW Cumulative RE installed capacity in MW

Year Energy

Solar

Solid

Biogas

Biomass

waste

sources

Mini-

Total

hydro

2011

9

20

110

20

60

219

2015

65

200

330

100

290

985

2020

190

360

800

240

490

2080

2025

455

380

1190

350

490

2865

2030

1370

390

1340

410

490

4000

2050

18,700

430

1340

410

490

21,370

Source: Shmg ChYI Chua. Feed-m Tanff Outlook in Malaysia, 2011

II.

DEVELOPMENT

Table 2: Selected Malaysian cities that underwent solar measurements

PV INDUSTRY 2 Malaysia's abundant sunshine (1643 kWhlm average irradiance annually) due to her naturally tropical climate is advantageous to development of solar energy or solar photovoltaic (PV) systems. A study done by the Malaysia Building Integrated Photovoltaic (MBIPV) project considers solar PV system's electricity-producing potential in Malaysia to be the highest among nations worldwide. Table 2 shows selected Malaysian cities where solar measurements on annual energy output, energy payback time, and CO2 mitigation were made via the MBIPV project [10]. IN

Region

City

East Malaysia

Central: Kula Lumpur

Kota Kinabalu Sabah

Northern: Penang

Kuching Sarawak

Eastern: Kota Bahru and Kuantan Southern: Melaka and 10hor Bahru

The study found that: (i) annual energy outputs for those cities ranged between 1170 and 1600 kWhlkWp for roof-top systems, and between 630 and 830 kWhlkWp for facade systems, putting the cities among the top half in estimated annual energy output for roof-top applications [10] (the highest output was by Kota Kinabalu); (ii) energy payback time ranged between 1.6 and 2.2 years for roof-top systems and between 3 and 4 years for facade systems; considerably shorter than the expected 30-year lifetime of an installation, so energy capital for manufacturing and installation of PV systems can be recovered well in advance before 30 years is up; (iii) CO2 mitigation ranged between 20 and 40 tC02 for roof-top installations and between 10 and 20 tC02 for facade systems, making CO2 mitigation potential in Malaysia rd relatively high, and consequently qualifying Malaysia, on 23 October 2008, for full membership of the International Energy Agency Photovoltaic Power System Program (lEA PVPS).

978-1-4577-1354-5/11/$ 26.00 2011 © IEEE

Peninsular Malaysia

The PV market in Malaysia is extremely small despite PV applications in Malaysia having dominated off-grid market since 1980s and on-grid market since 1998. It is becoming more significant, strengthened and fostered by the presence of key international PV manufacturers in Malaysia: First Solar Inc., Q-Cells AG, SunPower Corporations, and Tokuyama Corporation [11]. The MBIPV project, which began in 2005 and was funded by the Malaysian Government, Global Environment Facility via the United Nations Development Programme (UNDP/GEF), and private sectors addressed the cost concerns of developmental PV systems. Another national MBIPV programme, the SURIA 1000, targets residential and commercial sectors in establishing new BIPV markets and providing direct opportunities to public and industry alike for involvement in PV applications in Malaysia. In this regard and in terms of government effort, a 100kWp demonstration PV project was in 1995 implemented in Marak Parak, Sabah, under initiatives of the Ministry of Energy, Water and Communications, with 775.73kW grid-connected PV-system

116


capacity installed by end 2008 [11] and IMWp installed by end December 2009 [12].

Various policies such as tax credits, pricing laws, production incentives, quota requirements, and trading systems have been drawn and implemented, promoting use of RE. Founded on three primary objectives of supply, utilization, and environment, the Malaysia National Energy Policy of 1979 has been met to some extent, in terms of ensuring provision of adequate, secure, and cost-effective energy supplies via least cost-option development of indigenous energy resources both non-renewable and renewable, diversification of supply sources from within and outside the country, promotion of effective use of energy so its negative impact is minimized and discouragement of wasteful or non-productive patterns of energy consumption.

The Government is planning for PV industry development by 2011, the application of a new RE policy that operates the development. Soft infrastructure continually takes shape, including capacity enhancement of local PV service providers, quality control scheme, and awareness program for the general public and the commercial sectors. The plan is also a three prong strategy addressing energy security, climate change mitigation, and creation of a new, green-technology economy in Malaysia, with estimated minimum of 10,000 domestic PV hot-water systems [13]. III.

ENERGY POLICIES AND

The 9th Malaysian Plan (2006-2010) exemplifies an energy policy with emphasis on intensifying energy efficiency to meet with the nation's energy challenge and in line with sustainable development agenda. The new National Green Technology Policy, launched in April 2009, provided guidance and created new opportunities for businesses and industries to positively impact economic growth [7], eliminate subsidies for non-renewable energy sources but with initial provisional handholding for renewable energy sources helping rural electrification, environmental betterment and long-term sustainable development. RE targeted in the country's energy mix was just 5% in the 9th Malaysia Plan but it was not achieved overall, owing to implementation failures within the 9th MP period. New initiatives that were based on Renewable Energy Policy and Action Plan were taken in the lOth Malaysia Plan (2011-2015) (see Figure 1), to achieve an RE target of 985MW by 2015, via, for instance, FiT (Feed-in Tariff) programme, that could contribute 5.5% to Malaysia's electricity generation mix [14].

IMPLEMENTA nON OUTLOOK Malaysia's framework in energy development policies began when petroleum was found in the early 1970s. Petroliam Nasional Berhad (Petronas) was on 17 August 1974 [14] incorporated via the Companies Act 1965; it later became wholly-owned by the Government of Malaysia (GoM), who, via the Petroleum Development Act of 1974, was vested with entire ownership and control of petroleum resources in Malaysia. Subsequent policies included the National Petroleum Policy 1975, National Energy Policy 1979, National Depletion Policy 1980, Four Fuel Diversification Policy 1981, Fifth Fuel Policy 2000, National Biofuel Policy 2006, and National Green Technology Policy 2009. The most prominent important step towards sustainable development was introduction of the Fifth Fuel Policy in 2000, where solar, biomass, biogas, municipal waste, and mini-hydro were recognized as potential RE sources for electricity generation. From thereon, other, new policies were directed towards utilization of RE and promotion of energy efficiency, to reduce over-dependence on fossil fuels and achieve sustainable development.

978-1-4577-1354-5/11/$ 26.00 2011 © IEEE

117


Renewable energy will increase from < 1% in 2009 to 5 .5% of Nlalaysia's total electricity generated by 2015 Moving towards renewable energy replaces the need for fossil-fuel power plants

Planned increase in renewable energy capacity MW

985

RE investments will receive a huge push t rough FiT

-

Introduction of Feed-in Tariff

330

(Fm of 1% to be

incorporated into the

Biomass

electricity tariffs of consumers

Biogas

Establishment of a

Energy Fund from the FiT to be Renewable

Mini-hydro

administered by a special Solar PV Solid Waste

41.5

% ofTotal Generated E lectric ity

2009

2015

CD

CD

•

agency under KeTTHA This provides an annual COz avoidance

of 3.2

million ton nes

SOURCE: MlnlSlJy or EIl... gy. Grll!!fl Technology and WallY

Fig 1: Renewable Energy Targets in the 10lh Malaysia Plan

institutions are more comfortable in providing long-termed (>15 years) loans. FiT rates that can give more benefits to electricity consumers and government are counted from 2011. FiT's fixed rate for solar PV is 1.25-1.75 RMlkWh, with annual regression of 6% and displaced cost of 0.35 RMlkWh; see Table 3.

Malaysia's 2020 vision focuses on the betterment of various social, environmental, and economic parameters. A policy implementation is the government's Feed-in-Tariff (FiT) program, a mechanism enabling electricity produced from indigenous RE resources to be sold to power utilities at fixed premium price and for specific duration, providing a conducive and secure investment environment so financial

978-1-4577-1354-5/11/$ 26.00 2011 © IEEE

118


Table 3: Proposed Malaysian FiT Rates (starting 2011)

RE Technologies/ Resources

FiT Duration

Range of FiT Rates"

Annual

(RMlkWh) Min-Max

Degression"

Displaced Electricity b Cost (RMlkWh)

Biomass (palm oil, agro-based)

16 years

0.24-0.35

0.5%

0.2214

Biogas (palm oil, agro-based,

16 years

0.28-0.35

0.5%

0.2214

Mini-hydro

21 years

0.23-0.24

0%

0.2214

Solar PV

21 years

1.25-1.75

6%

0.3504

Solid waste and sewage

21 years

0.30-0.46

1.8%

0.2214

Wind

21 years

0.23-0.35

1.5%

0.2214

Ocean, geothermal

21 years

0.28-0.46

1%

0.2214

farming)

" Subject to final confirmatIOn upon RE Law enactment. b Subject to tariff increment. IV.

Source: PTM MalaYSia

•

LIMITS AND BARRIERS TO SOLAR ENERGY DEVELOPMENT IN MALAYSIA

Despite solar energy's great benefits and grand policies, a major obstruction to development of solar energy use in Malaysia is absent education, a void that can be filled with improved overall understanding and knowledge of solar energy's reliability and environmental soundness, among other benefits [15-17]. Possible overcoming of limits and barriers of solar energy implementation: •

• •

•

•

•

V.

CONCLUSIONS

Solar energy is principal to the Malaysian government's efforts for sustainable development and climate change mitigation. Malaysia's renewable energy policy target is to reach 5.5% energy share by 2015. With regards to formulation of policies on renewable energy by the Malaysian government, laws and regulations have been planned, economic encouragement given, technical research and development done, etc. Still, there is not yet any solar energy policy singularly more beneficial to both the public and the government. The PV market in Malaysia is still extremely small compared with that of other developed countries. Malaysian government projects such as SURIA 1000 and MBIPV are insufficient; more developments are needed. Ways to gain public support for sustainable energy and achievement of targets must be sought. A main stumbling block is prohibitive pricing giving households and businesses little incentive to adopt solar energy technology, despite forecasts of its likely assumption of a fundamental role as Malaysia prepares to substitute fossil fuels with novel ones that are truly clean, renewable, safe, effective, and environment friendly.

Provision of support to practical implementation of RE technology and solar energy policies; Initiation of regional-based policy. Dedicated credit or loan facilities that make solar power attractive, and reduced taxes and customs duties on equipment related to solar energy technology; Cooperation between government and non-governmental organizations (NGOs) effectively enhancing present level of public awareness via dissemination of information on solar energy benefits, including (other than its environmental advantages) its legal requirements and financial aspects. Government's provision of information on solar technology implementation and the building up of technical capacity. Fossil-fuel subsidy benefits reduced and transferred to development of solar technology and solar energy markets, and attractive pricing for users and suppliers.

978-1-4577-1354-5111/$ 26.00 2011 © IEEE

National power grid accessible to independent power producers and TNB (Tenaga Nasional Berhad) give preference to renewable energy projects.

119


REFERENCES 1.

R. Clift,

9.

Climate change and energy policy: The importance of

and Sustainable Energy Reviews, 2010.

sustainability arguments. Energy, 2007. 32(4): p. 262-268. 2.

10

2006.

1437.

11.

S.M. Hasnain, S.H. Alawaji, and U.A Elani, Solar energy education - a viable pathway for sustainable development. Renewable Energy. 14(1-

2010. 2010: Kuching, Sarawak, Malaysia. 2010. 12

A8. Kadir Mohd Zainal Abidin, R. Yaaseen,

5.

J.J. Hwang, Promotional policy for renewable energy development in

M.A Nor, Prospective

Technologies-in-Maiaysia. 201O. 13.

Taiwan. Renewable and Sustainable Energy Reviews, 2009. 14(3): p.

7.

S.A.

8.

T.H. Oh, S.Y. Pang, S.C. Chua, Energy policy and alternative energy in

AM. Badriyah, "National Survey Report of PV power applications in Malaysia 2008". Malaysia Energy Centre (PTM). 2009.

1079-1087. SA

H.H. Ahmed, Kettha; Growth of solar power technologies in Malaysia; http://www.scribd.com/doc/35456757/Growth-of-Solar-Power

scenarios for the full solar energy development in Malaysia. 2010.

6.

AK. Othman, Malaysian government policy in renewable energy: Solar PV system, in World Engineering Congress 2010, 2nd - 5th August

4): p. 387-392. 4.

OECD, Compared assessment of selected environmental indicators of photovoltaic electricity in OECD cities, Report IEA-PVPS no-ol.

A Jager-Waldau, Photovoltaics and renewable energies in Europe. Renewable and Sustainable Energy Reviews" 2007. 11(7): p. 1414-

3.

M.zAA Kadir and Y. Rafeeu, A review on factors for maximizing solar fraction under wet climate environment in Malaysia. Renewable

14.

M, Keynote address: international energy security forum, Kuala

S.c. Chua, T.H.

Oh, W.W. Goh, Feed-in tariff outlook in Malaysia.

Renewable and Sustainable Energy Reviews, 2011. 15(1): 705-712.

Lumpur. November 2008.

15.

M, Keynote address: Powergen Asia conference, Kuala Lumpur

E.L. Bourdiros, Renewable Energy Sources Education and Research as an Education for Survival. Progress in Solar Energy Education, 1991.

Vol. 1: p. pp. 12-16, Borlange, Sweden.

October 2008. 2008. 16.

Malaysia: Issues and challenges for sustainable growth. Renewable and

S.W.W. Charters, Solar Energy Educational Pathways. Proc. 2ndWorid Renewable Energy Congress, 1992(Reading, UK).

Sustainable Energy Reviews. 14(4): p. 1241-1252.

17.

P. Garg and I.c. Kandpa, Renewable Energy Education in Developing Countries.

Proc.

1992(Reading, UK).

978-1-4577-1354-5/11/$ 26.002011 © IEEE

120

2nd

World

Renewable

Energy

Congress,