Renewable and Sustainable Energy Reviews 94 (2018) 551–564

Contents lists available at ScienceDirect

Renewable and Sustainable Energy Reviews

journal homepage: www.elsevier.com/locate/rser

Review of baseline studies on energy policies and indicators in Malaysia for T

future sustainable energy development
⁎
M.A. Hannana, , R.A. Begumb, M.G. Abdolrasolc, M.S. Hossain Lipuc, A. Mohamedc, M.M. Rashidd
a
Department of Electrical Power Engineering, Universiti Tenaga Nasional, 43000 Kajang, Malaysia
b
Center for Water Cycle, Marine Environment and Disaster Management (CWMD), Kumamoto University, Kumamoto 860-8555, Japan
c
Centre for Integrated Systems Engineering and Advanced Technologies, Universiti Kebangsaan Malaysia, 43600 Bangi, Selangor, Malaysia
d
Department of Mechatronics Engineering, International Islamic University Malaysia, 53100 Jalan Gombak, Kuala Lumpur, Malaysia

A R T I C LE I N FO A B S T R A C T

Keywords: Malaysia's framework for energy development was established in the early 1970s. Henceforth, many successive
Malaysian energy policies policies were introduced as potential resources for electricity generation and utilization. Currently, as a signa-
Indicators tory to the United Nations Framework Convention on Climate Change, Malaysia is sparing a number of effort to
Efficiency comply with the policy to meet the challenges of mitigating over-dependence on fossil fuels, reducing carbon
Baseline studies on energy
levels, and achieving sustainable national development. This paper reviews the baseline studies on electrical
Renewable energy
energy policies and the measurement indicators used in Malaysia's electric power system. This research involves
a comprehensive survey of electrical energy policies in Malaysia that focus on issues pertaining to energy supply,
utilization, its environmental impact and considerations, renewable energy (RE) policies, production and con-
sumption, energy efficiency, and feed-in tariffs. Fourteen energy indicators for sustainable development in
Malaysia were investigated through the identification of energy policies in significant areas, such as reliability,
safety, adequacy and cost-effectiveness of energy supply; increasing energy efficiency; minimizing environ-
mental impact; and enhancing quality of life in terms of social well-being. The policies and the indicators are
classified into different sustainable dimensions and summarized in tables along with the corresponding key
references. In this study, future energy planning and options, especially in nuclear and RE programs, as well as
the conflict between them, are illustrated through the overall performance relative to targets and benchmarks for
past and future projections up to the year 2030. This review seeks to examine the past, present, and future
policies and indicators to provide a sufficient overview of Malaysian energy policies for optimizing sustainable
development. The goal is for this review to lead to increased efforts to accommodate the increasing demand for
the management and utilization of RE, promote energy efficiency, and improve performance in achieving sus-
tainable national development.

1. Introduction known as turbo generators connected to a rotor that revolves in a

magnetic field generate alternating current power. Numerous techni-
In an electric power system, electrical tools are employed to gen- ques have been used to spin a turbine's rotor from steam-heated ap-
erate, transmit, and distribute electric power. The electric power net- proaches using fossil fuels (such as coal, gas, oil, or nuclear energy),
work that supplies power to homes and industries within a sizable re- hydro-electric power generation from falling water, and wind power
gion is called the national grid or the grid in which the generators generation [3]. Electric power systems transmit power to the distribu-
deliver power to the transmission system. The transmission system then tion system, i.e., in loads ranging from household appliances to in-
carries power from the generators to the distribution system, i.e., the dustrial machineries. In general, most loads are rated with a fixed
load centers and the distribution system subsequently supply the power number of phases of voltage and current with a certain frequency and
to the load at homes and industries, as shown in Fig. 1 [1,2]. [2]. Most home appliances are typically single-phase or sometimes
Multiple power sources are connected to most power systems, i.e., three-phase equipment operating at 50 Hz, with the voltage depending
external and internal power sources [1]. By contrast, batteries, fuel on national standards.
cells, or photovoltaic cells supply direct current power. The devices The conductor carries power from the generators to the load. In

⁎
Corresponding author.
E-mail address: [email protected] (M.A. Hannan).

https://doi.org/10.1016/j.rser.2018.06.041
Received 8 August 2017; Received in revised form 23 May 2018; Accepted 20 June 2018
Available online 28 June 2018
1364-0321/ © 2018 Elsevier Ltd. All rights reserved.
M.A. Hannan et al. Renewable and Sustainable Energy Reviews 94 (2018) 551–564

Nomenclature MEWC Ministry of Energy, Water and Communications

MNPC Malaysia Nuclear Power Corporation
AC Alternating current NEB National Electricity Board
CEB Central Electricity Board NEPIO Nuclear Energy Programme Implementing Organization
DC Direct current PRHEP Perak River Hydro Electric Power Company
EC Energy Commission (Suruhanjaya Tenaga) PTM Malaysia Energy Centre (Pusat Tenaga Malaysia)
EIA Energy Information Administration PWR Pressurized water reactor
EPP Entry Point Projects R&D Research and development
EPU Economic Planning Unit RE Renewable energy
ETP Economic Transformation Program REPPA Renewable Energy Power Purchase Agreement
FIT Feed-in tariff SESB Sabah Electricity Sdn. Bhd.
GHG Greenhouse gas SESCO Sarawak Electricity Supply Company
GTFS Green Technology Financing Scheme SIRIM Standard and Industrial Research Institute of Malaysia
HVDC High voltage direct current SREP Small Renewable Energy Programme
IPPs Independent Power Producers TNB Tenaga Nasional Berhad
KED Kinta Electrical Distribution toe Ton of oil equivalent
MESITA Malaysia Electricity Industry Trust Account TSO Technological Support Organization

Fig. 1. Basic structure of an electric power system [1,2].

general, conductors are categorized as components of the transmission hundred megawatts. The AC-to-DC converter or vice versa is the basic
line that transmits power with high voltages from the generators to the function of power electronic devices [8]. HVDC is a power electronics
load or the distribution system that supplies power with low voltages system used to alternate between AC and DC power for long-distance
from load centers to homes and industries [4]. The conductors of a power transmission. HVDC is reliable and economic, entails low
power system are typically situated either underground or overhead. transmission loss, and is environment friendly relative to AC voltage
Overhead conductors are usually constructed with air insulation and transmission systems. Power systems comprise protective devices, such
sustained on glass, porcelain, or polymer insulators. By contrast, un- as fuses, to avoid injury or destruction during failures. The fuse element
derground conductors have insulation that covers wires with flexible melts when the current flowing through a fuse exceeds the threshold
insulation or cross-linked polyethylene [4,5]. value. Subsequently, an arc is produced across the resulting gap, which,
Most power system loads are typically linear, i.e., resistive or in- in turn, interrupts the circuit. The protective relays then sense a fault,
ductive loads in which the current lags behind the voltage. However, initiate a trip, and separate the faulty circuit from the rest of the system
some loads are non-linear. In a power system, reactive power is not in high-powered applications [9].
measurable but is transmitted between the reactive power source and The current work reviews the baseline studies on energy policies
the load cycle. The transmission of reactive power through generators is and indicators in Malaysia. A comprehensive survey of Malaysian en-
recognized as a cost-effective method. If reactive power is provided ergy policies and indicators is analyzed for future sustainable energy
through capacitors, the capacitors are usually installed near inductive production, consumption, national development, and related issues.
loads to decrease the current load on the power system. To increase the Issues, challenges, and conflicts are highlighted for sustainable energy
voltage level, power factor correction can be installed at adjacent large development in Malaysia through the identification of energy policies
loads or the central substation [6]. Reactors are employed to control the for priority areas, such as the adequacy and cost effectiveness of energy
voltage on long transmission lines that consume reactive power. In most supply, improvement of energy efficiency, minimization of environ-
cases, reactors are placed in a series in a power system to minimize mental impact, and enhancement of quality of life and social well-
rushes of current flow. Small reactors with capacitors are also placed in being.
a series to limit the rush current associated with switching capacitors.
The fault current of a power system can also be limited by connecting 2. Power systems in Malaysia
series reactors [7].
Power electronics are switching devices that can change the Malaysia is located in the southern part of Asia and consists of two
amounts of power fluctuating from a few hundred watts to several separate territories, Peninsular Malaysia and East Malaysia, isolated by

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M.A. Hannan et al. Renewable and Sustainable Energy Reviews 94 (2018) 551–564

the South China Sea. The country's energy development framework the Connaught Bridge Power Station initialized the National Grid. The
began when petroleum was discovered in the 1970s. Following the interconnection was subsequently extended to Malacca. By 1965, a
Companies Act 1965 [10], Petronas (which stands for Petroliam Na- strategic plan was developed to connect the country's generation plants.
sional Berhad) was established and vested with all the oil and gas re- Notable plants such as Paka, Batang Padang, Pasir Gudang, Pergau, and
sources in Malaysia. Petronas was founded on 17 August 1974 and is Perai were connected through the main energy grid [16]. The Con-
wholly owned by the Malaysian government. Resources are managed naught Bridge Power Station located in Klang was the precursor for the
by Petronas through the Petroleum Development Act 1974 [10]. Other National Grid. Other areas, such as the Cameron Highlands Hydro
notable policies that influence the country's energy and power in- scheme, were also covered. Later, the National Grid was extended into a
dustries are the Fifth Fuel Policy 2000, the National Biofuel Policy western network. Lastly, the National Grid loop was established in
2006, and the National Green Technology Policy 2009 [11]. Malaysia the1980s by connecting Kota Bahru [17]. The formation of CEB was
entered the renewable and sustainable energy sector through biomass, completed on 1 September 1949 with the goal of ensuring the proper
municipal waste, biogas, mini-hydro, and small-scale solar resources regulation of the electricity sector [16] (Previously, the Electricity
that contributed to clean electricity generation [12,13]. These steps Department was established in 1946). The Board was responsible for
were taken to avoid dependency on fossil and gas fuel reserves. three major projects: the Connaught Bridge Power Station, the Cameron
The power industry in Malaysia has grown significantly in the last Highlands Hydroelectric Project, and the National Grid development
decade. This development can be largely attributed to the expansion of project. Thereafter, it became the owner of 34 power stations with a
the country's industrial and manufacturing sectors. Malaysia's power generation capacity of around 39.88 MW. This coverage included a
industry contributes significantly to the nation's economic growth. The hydroelectric plant with a capacity of 11.1 MW and a steam power
primary utility company in Malaysia also enjoys a monopoly. The entire station (Bangsar at Ulu Langat) with a total capacity of 26.5 MW [16].
power sector is managed by utility companies. Power sector manage- The CEB was under the federation of Malaya. The name CEB was
ment involves electricity generation, transmission, and distribution in changed to NEB on 22 June 1965 [16]. The Board continued to supply
regions. The leading utilities companies (TNB, SESCO, and SESB) cover electricity throughout the peninsula region in the 1980s. Moreover, the
the three main regions of Malaysia (Peninsular Malaysia, Sabah, and Board strategically replaced the PRHEP and the subsidiary company
Sarawak, respectively) [14]. SESB became a subordinate company of KED in 1982 with Huttenbach Ltd. [16]. Mahathir Mohamad, the prime
TNB. IPPs also contribute to the supply of electricity to consumers minister of Malaysia then, declared the government's interest in a pri-
through utility companies [14]. The entire sector is regulated through vatization policy on 4 May 1988 [16]. To implement the government
the coordination of several institutions. Such institutions include the decision, the government passed two legislations that replaced the ex-
EPU, the Ministry of Energy, Green Technology and Water, the EC, and isting Electricity Act. Hence, the TNB was established under the Elec-
the PTM. These organizations collaborate through planning, R&D, and tricity Supply Successor Company Act 1990 [16,18]. Currently, trans-
demonstrations for the energy sector [14]. mission substations are interconnected with the National Grid and
According to the ETP, transmission and distribution companies are distribution networks. Transformers are used to reduce the voltage
responsible for the following priorities [15]: rating to distribution voltage levels. The country's distribution voltage
ratings are 33 kV, 22 kV, 11 kV, 6.6 kV, and 400/230 V [18].
i. Transmission and distribution components, which are the compo-
nents used in the generation, transmission, and distribution of
electricity. These components include transformers, switching ap- 3. Energy policies in Malaysia
paratus, cable conductor distribution boards, and control panels.
ii. High value-added production of high voltage transmission and The Malaysian government defines the country's energy policy,
distribution equipment. which includes energy generation, supply, and usage. The Department
iii. Establishment of a cluster of transmission and distribution vendors of Electricity and Gas Supply regulates the energy sector. Other players
in Malaysia. Local companies include Malaysian Transformer act as energy suppliers, service companies, R&D institutions, and con-
Manufacturing, Tenaga Cable Industries, and Tenaga Switchgear. sumers [19]. Petronas and TNB are government-associated firms that
play a primary role in Malaysia's energy sector. Other contributors to
For high voltage equipment testing, the operation of a high-power the policy are government agencies such as the Ministry of Energy,
testing lab is an important step for the SIRIM. Any transmission and Green Technology and Water, the EC, and the PTM. The policy is based
distribution product must be certified through short circuit testing to on documents such as the 1974 Petroleum Development Act, 1975
maintain international standards. Most high voltage lab facilities are in National Petroleum Policy, 1980 National Depletion Policy, 1990
Europe (such as KEMA and CESI) [15]. Any testing lab is required to Electricity Supply Act, 1993 Gas Supply Acts, 1994 Electricity Regula-
maintain international testing standards, and therefore, coordination is tions, 1997 Gas Supply Regulation, and the 2001 Energy Commission
necessary between the operations of the SIRIM and internationally ac- Act [20]. Three main energy goals have been defined by the Ministry of
credited labs [15]. In 1964, the connection of Bangsar Power Station to Energy and Green Technology and Water to guide the establishment of
the energy sector. The new energy policy was published in 2010 under

Table 1
Energy policies and objectives in Malaysia from 1975 to 2010.
Policies Objectives

National Petroleum Policy 1975 • ToTo enhance

control the downstream oil and gas industry through the Petroleum Regulations 1974.
National Energy Policy 1979 • negative environmental
the sufficiency, safety, and cost effectiveness of energy supply; to encourage effective utilization of energy; to reduce
effects in the energy supply chain.
National Depletion Policy 1980 • ToTo extend the lifetime of Malaysia's oil investments for future security and constancy of oil source.
Four-Fuel Diversification Strategy 1981 • RE pursue stable use of oil, gas, hydro, and coal resources.
Five-Fuel Diversification Strategy 2001 • To enhance
involvement as the “fifth fuel” in energy supply combination.
National RE Policy and Action Plan 2009 • rational RE generation
RE influence in the national power generation mix, to facilitate the development of the RE industry, to guarantee
prices, to preserve the environment for upcoming generations, and to improve awareness of the role and
significance of RE.
New Energy Policy 2010 • To encapsulate all efforts to safeguard financial efficiency and safety of supply and to meet social and environmental aims.
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the Tenth Malaysian Plan. The energy policy objectives (supply and over 50% from palm oil waste [27]. The number of approved projects
utilization) and environmental aims were determined as the main focal for biomass reached 28 in 2005, with the total project installation ca-
areas. The objectives cover five strategic pillars for sustainable devel- pacity being 194 MW. Other approved projects included four landfill
opment, namely, energy pricing and strategic supply for development, gas-based schemes with 9 MW capacity and 18 mini hydro-electric
end use energy efficiency, energy governance and regulation, man- plants with 69.9 MW capacity [28]. A summary of the RE policy with
agement of change, and affordability. Table 1 details the energy policy the targeted functions is listed in Table 2 [29].
activities in Malaysia. Malaysia's biofuel policy is included in its National Biofuel Policy.
To explore the opportunities presented by biofuel-based resources,
3.1. Policies on energy supply, utilization, and emission Yanmar, a Japan-based company that is well known as a global man-
ufacturer of diesel engines, plans to conduct research on the develop-
The provision of sufficient, safe, and cost-efficient energy supply ment of palm oil biodiesel [30–33]. The plan includes the development
was facilitated through the growth of renewable and non-renewable and testing of biodiesel for industrial needs as well as for machines and
energy sources by using available alternatives and diversifying the generators. Numerous related infrastructure has been established in
delivery sources inside and outside the nation [21]. In terms of supply Kota Kinabalu since 2007.
objectives, the Malaysian government pursued policy initiatives, espe-
cially with regard to petroleum and natural gas, by extending the life of 3.3. Policies on production and consumption
local non-renewable sources and diversifying away from oil de-
pendency to comprise other energy sources. Historically, the main sources of Malaysian energy generation are
To encourage the effective use of energy and minimize wasteful and oil and natural gas [34,35]. The country's electricity generation capa-
non-efficient energy utilization, policies sought to encourage energy city is approximately 20,635 MW. The IPP generation capacity is about
consumers and industries to practice efficiency in the generation, 14,777.4 MW. According to the Energy Commission Malaysia, the
transmission, conversion, utilization, and consumption of energy maximum demand is approximately 16,562 MW, as recorded in 2013
through awareness-raising programs [21–23]. Many initiatives for im- [36]. Fig. 2 and Fig. 3 present historical electricity production and
proved management exerted significant influence on the effective use of consumption of the Peninsula and Sabah in megawatts from 2010 to
energy through incentives such as tariffs. The promotion of efficient 2017 [36–43]. In 2015, the total electricity generation and total de-
methods for energy co-generation from a single source was undertaken mand in Sabah were 1447.8 GWh and 983 MWh, respectively. In the
through government initiatives [24]. same year, the demand in the Peninsula was 17,370 MW. The sources of
Understanding the effect of energy policies and their indicators is electricity production included coal, hydro, and natural gas at rates of
essential to minimize the negative aspects of energy generation, 2.9%, 9.5%, and 62.6%, respectively. The remaining 7% was from other
transference, and deployment on the environment. In previous decades, forms of fuel [40].
policies related to environmental objectives were limited. However, at Despite the continuous growth of energy usage, the country has a
present, major project developments are required to conduct environ- 33-year reserve of natural gas and 19-year reserve of oil. As the natural
mental assessment prior to development. Emissions, discharges, and sources are being depleted, the government is increasingly considering
noise entail the environmental impacts of energy utilization that must renewable resources as alternative energy sources. At present, 16% and
be managed to ensure that processes meet air and emission criteria 84% of total electricity generation come from hydro and thermal
[25]. sources, respectively [40]. Petronas dominates the oil and gas sector
while the EC regulates the entire energy industry in the Peninsula and
3.2. Renewable energy policy Sabah. Such regulation is authorized by the terms of the Electricity
Commission Act of 2001 [41].
The Malaysian government is currently trying to strengthen energy
production from renewable sources. Among such sources, biomass is 3.4. Policies on energy efficiency and feed-in tariffs
highlighted as the country has great potential from its palm oil sector.
Biomass was planned as the fifth fuel source in the Fuel Diversification Industrial consumers use approximately 40% of primary energy and
Policy of Malaysia [19,21,26]. In 2001, the policy mandated the gen- 55% of electricity. The total electricity used in Malaysia is 38% of the
eration of 5% of electricity from renewable sources by 2005. This re- primary energy sources; this value is equivalent to about 60% of the
quirement meant that the electricity production was set to around total energy used in Malaysia. Moreover, the EC of Malaysia has laun-
500–600 MW of total production capacity [19]. Hence, numerous ef- ched various energy efficiency programs [19,44–47]
forts were undertaken to fortify the policy. These efforts came in the The government is seeking to strengthen the expansion of renewable
form of fiscal incentives, allowances in investment taxes, SREP, and so generation, especially with biomass as the “fifth fuel” source of its Fuel
on. As a result, contribution from small renewable electric plants was Diversification Policy. In 2001, the policy aimed to achieve 5% in RE,
encouraged to feed the national grid [19,27]. In the SREP project, which is equivalent to 500–600 MW of total installed capacity [46,47].
anyone could sell their generated electricity to TNB for up to 10 MW Many strategies were undertaken to intensify the promotion of the
under an agreement with a 21-year license. The response was positive, policy, e.g., fiscal incentives, including investment tax allowances and
with many applicants showing genuine interest. Most of the attention the SREP. Such initiatives also promote linkages between small re-
was directed toward electricity generation primarily from biomass and newable generation plants and the national grid. In SREP, each project

Table 2
Selected renewable energy policies in Malaysia.
RE Policies Year Policy Policy Type Policy Target
Status

RE Act establishing FIT 2011 In Force Economic instruments, Fiscal/financial incentives, Feed-in Solar, Solar photovoltaic, Bioenergy, Biomass for
system tariffs/premiums power, Hydropower, Bioenergy
RE Policy and Action Plan 2010 In Force Research, Development and deployment, Policy support, Multiple RE Sources, All
Institutional creation, Strategic planning
GTFS 2010 In Force Financial instruments, Fiscal/economic encouragements, Loans Multiple RE Sources, All

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25000 3.5. Related energy policy objectives

Unit is Megawatts 20000
Green technology is technology that focuses on the improvement
15000
and application of equipment, products, and systems to protect en-
10000 vironmental resources by minimizing and reducing the negative effects
5000 of human actions. This technology is associated with products, equip-
ment, and systems that comply with the following objectives [39]:
0
2010 2011 2012 2013 2014 2015 2017
Production Capacity 18218 18220 21749 23818.4 20,825 20635 22220
• To reduce the deterioration of the environment
Maximum Demand 15,072 15,476 15,826 16,562 17,360 17,370 17,175
• To maintain zero or low GHG release that is not harmful
Fig. 2. Peninsula Malaysia's historical electricity production and consumption • To preserve the usage of energy and innate sources
[42]. • To inspire the exploitation of renewable resources
1600 • To guarantee that energy supply is sufficient, safe, and economical
1400 through renewable and non-renewable sources
1200 • To ensure and stimulate efficient energy utilization
• To reduce the adverse effects of the energy supply chain on the
Units in Megawatts

1000
800 environment
600
400
200
• To extend the lifetime of oil reserves for future safety and sustain-
ability in fuel sources
• To seek balance in the use of coal, gas, oil, and hydro resources
0
2010 2011 2012 2013 2014 2015 2017
Production Capacity 1265.05 1331.69 1,324 1321 1447.8 1447.8 1327 • To promote RE as the fifth energy source
Maximum Demand 772.8 830.1 828.4 866.6 917 983 1084 • To employ green technology as the driver to improve the national
economy and promote sustainable development
Fig. 3. Sabah historical electricity production and consumption [43].

that can produce up to 10 MW is authorized to sell the generated 4. Energy indicators in Malaysia
electricity to TNB under 21-year licensing agreements. Many organi-
zations have applied for this program. Most applications involve bio- In Malaysia, 14 indicators of energy have been established in the
mass, and of these materials, over half are from palm oil waste [38]. In form of sustainable development through the recognition of energy
2005, 28 biomass projects associated with the installation of 194 MW of policy priority areas [25]. The priorities identified are as follows.
grid-connected capacity were permitted. Four authorized projects were
based on landfill gas and had 9 MW of gas capacity, and 18 mini hydro- • Guarantee sufficient and economic efficiency of energy supply
electric projects contributed a total of 69.9 MW capacity [38,48,49]. • Improve energy efficiency
As a way to promote the rural electrification program, the MESITA • Improve social welfare
was successfully established in 1997. It is managed by the MEWC. In • Reduce the negative impact of energy generation on the environ-
MESITA, the main IPPs in Peninsular Malaysia and Sabah contribute ment
about 1% of their annual pre-tax profit for rural electrification as an • Expansion and deployment of RE resources
innovative trust fund. The contributions include promotional activities,
direct involvement in RE, energy efficiency projects, and training [36]. Energy indicators can be categorized as environmental, economic,
and social. Such indicators estimate the priorities of the energy policy.
These energy indicators are designed to encourage sustainable devel-
opment in accordance with Malaysian energy policies. In turn, these

Table 3
Dimensions of sustainable development on Malaysian energy policies.
Sustainable Energy priority areas Energy related topics Relevant energy indicators
development

Social Improving quality of life in terms of social well-being Accessibility • Rural electrification coverage by region (%)
Affordability • Share of electricity spending in total household
expenditure for different income groups (%)
Disparities • Share of electricity subsidy received among different
income groups (%)
Economic Ensuring sufficiency and cost effectiveness of energy supply; Overall use • Energy use per capita
improving energy efficiency; increasing RE utilization Overall productivity • Energy use per GDP
Production • Rate of self-sufficiency
End use • Share of sectorial energy demand in the total energy
consumption
• Sectorial energy intensities
Diversification (Fuel mix) • Fuel shares in energy and electricity
• RE capacity in power supply grid
Prices • End-use energy prices by fuel
Fuel reserves • Reserves-to-production ratio
Environment Reducing the energy impact on the environment Climate change • GHG
GHG
emissions from energy consumption per unit of

Air quality • Share of emission loads from the energy sector in the
total air pollutant emissions (%)

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priorities were labeled in relation to the dimensions of sustainable de- amounted to 1.84 toe in 2017 [58].
velopment and energy-associated issues. Details of all 14 indicators
were established with the essential set of energy indicators for the 4.5. Energy use per GDP (toe/RM million)
purpose of sustainable development, energy priority areas, and related
energy topics (Table 3) [39]. In Table 4, the mode of final energy intensity was stable from 1990
to 2017 [51–61]. By contrast, the energy demand per capita was on the
4.1. Rural electrification coverage by region rise but declined after 2008 [59–61]. Electricity demand intensity also
increased from 1990 to 2017, an indication of the increased elec-
The average rural electrification coverage in Malaysia reached trification of society to accommodate additional home appliances and a
91.5% in 2003 and then rose further to approximately 97.3% in 2017 broad network. Nevertheless, Malaysia must use electricity efficiently.
(Fig. 4). Approximately 4% and 15% of remote rural households in Primary energy intensity continued at almost an unchanged level from
Sarawak and Sabah, respectively, still lack access to electricity. The 2000 to 2017, between 118 and 122 toe/RM million, which signifies
Malaysian government has set promising objectives to provide the strong economic development in the manufacturing and service-based
convenience of modern energy facilities, particularly in the rural areas economies.
of Sarawak and Sabah [39,45,50]. The Ministry of Rural and Regional The final energy intensities of the sampled countries are presented
Development, as represented in the Ministry of Energy, Green Tech- in Fig. 8 [62–64]. The economic planning unit of Malaysia has chosen
nology and Water and TNB, undertakes rural electrification programs Germany, Denmark, and Sweden as the standards for energy efficiency
that cover areas beyond the jurisdiction of local authorities throughout in the country [46]. Energy intensity in Malaysia is roughly the same as
Peninsular Malaysia. The program includes the electrification of in- that in Thailand and the USA, but it is higher than those in almost all
digenous people's settlements, islands, small estates, and remote vil- other countries shown in Fig. 8. This comparison suggests that the
lages. To solve the electricity supply issue, TNB has agreed to extend economy should be more energy efficient.
their grid to under-served communities; alternatively, the electricity
would be supplied using generator sets, solar hybrid systems, and other 4.6. Rate of self-sufficiency
forms of RE. Accordingly, TNB completed 68 rural electrification pro-
jects involving the electrification of nearly 2000 homes in 2013 [51]. Fig. 9 shows that Malaysia can meet energy demands at present
To catalyze the rural electrification program, the MEWC has taken the production levels, but its self-sufficiency rate is decreasing. To remedy
initiative to form a trust fund to which most major IPPs in the Malay- this, policies seek to improve production and consumption needs to
sian Peninsula and Sabah contribute about 1% of their annual pre-tax prevent the country from becoming a net energy importer [19,65–68].
profit to provide rural areas with electricity [52,53].
4.7. Shares of sectorial energy demand in total energy consumption
4.2. Share of electricity in household expenditure for different income
groups The details of major sectorial demands in total energy consumption
are shown in Fig. 10. Industrial and transport sectors are the main
The share of electricity payments in the total expenditure for dif- energy consumers in the country, and the total energy use in these two
ferent income groups from 2004/05 to 2016/17 is illustrated in Fig. 5 sectors reached approximately 67% of the entire energy consumption in
[39,54–56]. Note that the money spent on electricity was increasing for Malaysia in 2015. The transport sector has dominated the share of total
all income groups during the said periods. This trend was due to the energy consumption since 2000. This situation is due to the increasing
10% rise in electricity tariff. The rise could also be caused by the value annual growth rate of recorded vehicles [69–71]. The sectorial energy
added to living standards, which made the cost of electricity reason- demands in agriculture, non-energy sectors, and residential and com-
able. Fig. 5 also shows that in all income groups, the overall afford- mercial segments are also rising (Fig. 10) [58,63].
ability of electricity increased, which suggests that the poor could im-
prove their standard of living [39,55]. 4.8. Sectorial energy intensities

4.3. Share of electricity subsidy received among different income groups Fig. 11 displays the trend of the final energy intensities between
2005 and 2013. The primary intensity of electricity consumption con-
The highest tariff subsidies are applied for the richest group (Fig. 6) tinued to decline from 2005 to 2011, but in 2012, the primary energy
[57]. Moreover, the total delivery of tariff subsidies is unbalanced. intensity increased by 3.4% compared with the previous year, and such
Electricity tariffs remained almost unchanged from 1998/99 to 20155/ change was attributed mostly to the industrial sectors [37]. A slight
16 in most of the lower income groups. Normally, the adjusted tariff is decrease in the final energy intensity amounting to 53.42 toe occurred
greater than the previous one by approximately 12%. However, users in 2010, and the value declined to 51.96 in 2015. This stabilized energy
who consume not more than 200 kWh per month or with monthly intensity suggests that the energy demand in Malaysia has been rising
expenditure below RM 43.60 (April 2008: US$ 1 = RM 3.19) are un-
affected by the new tariff in the new formula [37]. Subsequent reports 120
on the Household Expenditure Survey in 2009 and 2016 demonstrate 100
reasonable tariff subsidy distributions. 80
Percentage (%)

60
4.4. Energy use per capita
40

The final energy demand in toe per capita and the electricity de- 20
mand (in MWh) per capita are shown in Fig. 7. Electricity demand per 0
2000 2003 2006 2010 2013 2015 2017
capita increased from 2008 to 2015, thereby forecasting Malaysia's Malaysia 98.5 91.5 92.9 95.1 96.8 97.3 98.1
industrial and social development and improved living conditions. A Peninsular Malaysia 97.5 98 98.6 98.8 99.1 99.4 99.5
slight decrease in energy demand per capita occurred from 2008 to Sabah 67.1 69.8 72.8 80.6 82.1 85.3 88.7
2009, reducing the amount from 1.63 toe to 1.46 toe. Afterwards, the Sarawak 66.9 77.3 80.8 89.6 93.4 96.1 96.1
value of energy demand went nearly unchanged from 2009 to2011.
However, after 2011, the per capita energy demand increased and Fig. 4. Rural electrification coverage by region, data and projections (%) [53].

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8 Table 4
7 Historical data for energy intensity and demand [62].
Percentage (%)

6
5 Energy Primary Final Energy Final Energy Demand
indicators Energy Intensity (toe/ Demand per Intensity
4
Intensity (toe/ GDP (RM Capita (toe Per (GWh/GDP
3
GDP (RM Million)) Capita) (RM Million))
2 Million))
1
0 1990 99 61 0.73 0.092
RM 1000- RM2000- RM3000- RM4000-
<RM1,000 >RM5000 1995 99 65 1.07 0.115
1999 2999 3999 4999
2000 118 69 1.26 0.142
1994/95 2.1 2.3 2.2 2 2.1 2
2005 122 70 1.45 0.148
1998/99 2.7 2.5 2.3 2.3 3.2 2.1
2006 118 70 1.5 0.147
2004/05 3.5 3.3 3.2 2.9 3.9 2.9 2007 119 73 1.63 0.146
2012/13 5.1 5.8 4.9 4.1 6.7 4.8 2008 118 70 1.63 0.145
2014/15 5.9 6.7 5.8 5.2 7.4 5.6 2009 118 65 1.46 0.153
2016/17 6 6.9 5.7 5.8 7.5 6.1 2010 114 61 1.47 0.155
2011 112 61 1.5 0.151
Fig. 5. The share of electricity spending in overall household expenditure for 2012 116 64 1.48 0.152
different income groups (%) [56]. 2013 115 65 1.52 0.155
2014 118 67 1.56 0.156
2015 120 70 1.54 0.158
35 2016 125 69 1.57 0.159
30 2017 127 71 1.55 0.161
Percentage (%)

25
20
14000
15
12000
10 US Dollar 10000
5 8000
0 6000
RM 4000
<RM100 RM2000 RM3000 RM4000 >RM500
1000-
0 -3000 -4000 -5000 0 2000
2000
0
1998/99 7 11.2 15.5 17.8 20.3 27.1
2004/05 7.3 11.9 15.1 17.3 19.6 28.4
2012/13 9.4 14.2 18.3 19.6 23.1 33.1
2014/15 9.9 14.8 19 20.1 24.3 34.4
2015/16 10.2 14.9 19.2 20.3 24.5 35.2 2005 2010 2015 2017

Fig. 6. Electricity subsidy received among different income groups [57]. Fig. 8. Final energy intensities for selected countries [64].

2.1 5.5 1500

1.97 1.96 1,189
Final Energy Demand Per Capita

1,145
Electricity Demand (MWh)

2 1,104
1.9 1.84 5 914
1000 820
1.8 1.72 4.98
1.63 1.69 4.81 4.5 598.4 598 610
1.7 1.63 1.61 465 521.8
500
(toe)

1.6 4.39
1.46 1.47 1.5 4
1.5 1.45 1.5
3.884 3.987 3.98
1.4 3.285 3.37 3.7 3.708 3.5 0
3.152 3.452
1.3 3.048 2000 2005 2010 2015 2017
1.2 3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dry Natural Gas Consumption (Billion Cubic Feet)
Total Petroleum Consumption (Thousand Barrels Per Day)
Final Energy Demand per Electricity Demand (MWh)
Fig. 9. The rate of energy self-sufficiency [63].
Fig. 7. Electricity and energy demand per capita [58].

45
Total energy consumptionn

with its economic growth while the final energy intensity has improved 40
in percentage (%)

35
since 2005.
30
25
20
4.9. Fuel shares in energy and electricity 15
10
5
Crude oil is currently the dominant conventional fossil fuel in en- 0
2000 2005 2010 2015 2017
ergy supply, followed by natural gas. Fig. 12 shows that these fuels Industrial 38.41 40.47 31.17 29.80 27.76
represent more than 70% of the entire energy supply [45,72–74]. This Transport 40.64 40.18 40.57 36.78 35.68
finding indicates that Malaysia is highly dependent on petroleum. Agriculture 0.35 0.26 2.59 2.25 3.32
However, in line with the Eighth Malaysia Plan (2005–2011) [73], Non-Energy 7.58 5.68 8.91 16.04 18.54
usage of coke and coal as supply sources for energy have been en- Residential and Commercial 13.02 13.41 16.76 15.12 14.7
hanced, and this development, in turn, shows a decrease in dependency Fig. 10. The share of sectorial energy demand in total energy consumption
on natural gas and crude oil. [58,63].
Although the main energy consumed as of 2014 involved petroleum
products, petroleum product shares in total energy consumption have

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Primary Energy Intensity Final Energy Intensity 4.12. Reserves-to-production ratio

100
93.51 94.81 94.98 90.4 As shown in Fig. 15, the natural gas reserves have dropped since
80 91.67 91.34 90.8 89.8
2000 [63,72,82]. Consequently, the proper organization of recognized
60 energy assets is a contentious matter in the national sustainable energy
40 53.42 50.49 50.24
programs in Malaysia [35] as natural gas and crude oil are clearly de-
54.03 51.56 50.8 49.8 49.5
creasing (Fig. 15).
20
0
2010 2011 2012 2013 2014 2015 2016 2017 4.13. GHG emissions from energy consumption per unit of GDP

Fig. 11. Final energy intensity (toe/RM Million) and primary energy intensity
The latest statistics for three leading GHG emissions from energy
(GWh/RM Million) from 1990 to 2012 [63].
consumption per GDP from 2000 to 2017 is shown in Fig. 16 [19,83].
The total CO2 emissions from the consumption of energy sources per
Natural Gas,
44% dollar of GDP (carbon intensity) from the USA, Malaysia, and several
other countries are presented in Fig. 16. Statistics on CO2 emissions
Crude Oil from energy consumption of natural gas, petroleum, coal, and natural
Petroleum, 33%
gas burning are accessible from the USA EIA energy statistics database.
Hydropower, Note that China is the highest contributor of CO2 emissions, followed by
4%
India, Indonesia, Thailand, and Malaysia [37]. CO2 emission in Ma-
Coal, 19%
laysia is higher than that in Japan, Korea, and some European coun-
Natural Gas Crude Oil Petroleum Coal Hydropower tries.
Fig. 12. Share of total primary energy supply in Malaysia [74].

4.14. Shares of emission load from energy sector in air pollutant emissions
been increased in accordance with the national depletion policy and (%)
fuel diversification policy (Fig. 13) [5,63,75,76].
In the Seventh Malaysia Plan (1996–2000), the mix fuel for gen- Fig. 17 shows that CO2 contaminant emissions generally come from
eration was expanded through reduced dependency on oil and in- energy burning activities, particularly from the transport sector
creased use of natural gas and hydropower. Struggles toward diversi- [84,85]. CO2 emissions from petroleum are understood to be greater
fication remained throughout the Eighth Malaysia Plan (2001–2005), than those from other sources. The capacities of CO2 emissions from
with the share of coal as an electricity generating source increasing and natural gas, coal, and petroleum in 2011 increased by 25%, 13%, and
the share of both natural gas and oil decreasing [77]. This outcome 10%, respectively, compared with the figures from 2000 [37].
illustrates the success of advanced and energy policies in diversifying
the mix generation. However, on 31 December 2012, the installed ca-
pacity in the Peninsula powered primarily by natural gas and coal and
partly by hydroelectric plants reached 21,749 MW [49]. Fig. 14 shows
that the electric power generation mix for Peninsular Malaysia is due to 100%
the approved Generation Development Plan [78]. Clearly, coal power 90%
generation has been stimulated, and gas power generation has de- 80%
creased because of the policy. Moreover, a reasonable amount of gen- 70%
Percentage (%)

erated power can be expected from the Sarawak interconnection [49]. 60%
50%
40%
4.10. RE capacity in the power supply grid
30%
20%
In accordance with the policy of supporting the deployment of RE 10%
sources, 350 MW produced from RE was agreed upon as a goal to be 0%
accomplished by 2010 [46]. As of 2006, a total of 12 MW had been 2013 2014 2015 2016 2017
produced from RE, including 10 MW from empty fruit bunches and coal and Coke natural gas Electricity petroleum products
2 MW from biogas. This Fig. (12 MW) accounts for only 3.4% of the
2010 target [79].
100%
4.11. End-use energy prices by fuel 90%
Percentage (%)

80%
70%
Prices of energy with and without subsidies in Malaysia represent a
60%
significant challenge for the country. In general, the energy prices in 50%
Peninsular Malaysia, Sarawak, and Sabah reached the average, al- 40%
though those prices were adjusted in March 2006. The unsubsidized 30%
20%
prices are greater than the retail prices. The government subsidizes 10%
approximately half of the unsubsidized price of LPG as part of the policy 0%
2013 2014 2015 2016 2017
for endorsing this clean sustainable fuel [80]. Regarding the electricity
petroleum products 69.4 57 59 61 63
tariff schedule, the government and TNB rate a new tariff under the Electricity 21.1 21 21.1 21.5 21.8
domestic and commercial categories that have been in operation since 1 natural gas 20.4 19 20.2 20.8 21
January 2017 (Table 5). The new tariff replaces the earlier tariff table, coal and Coke 4.1 3 3.2 3.5 3.2
and this replacement was put in effect on 1 June 2011. The details can
be found in [54,81]. Fig. 13. Fuel shares in total energy consumption [63,76].

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600 524.4 544.832 541 555

514.832
500
4% 4% 4% 4% 10%
4% 400
300
47% 50% 52%
64% 200
59% 81.7 75 83 83 89
100
0
2000 2005 2010 2014 2017
49% 46% 44%
32% 27% Crude Oil thousand barrels per day
natural gas proved reserves trillion cubic feet
2013 2015 2017 2019 2022
Gas Coal Hydro Sarawak interconnection Fig. 15. Proved reserves of natural gas and crude oil [63].

Fig. 14. Generation mix for peninsula Malaysia based on the approved gen-
2.50
eration development plan [78].
2.00

5. Future energy planning and alternatives in Malaysia 1.50 2000

1.00 2005
5.1. Nuclear power program 2010
0.50 2015
Nuclear power plants are possible alternatives for the Malaysian - 2017
Government as they implement the building of nuclear power plants or
shift to other plants. Recent activities drew attention to detailed studies
regarding some considerations and toward identifying issues such as
assessing the present countrywide capability levels and the state of Fig. 16. CO2 emissions from the energy consumption per dollar of GDP for a
preparedness in relation to the progress of a nuclear plant system. number of countries (Tonnes/’000 2000 USD) [83].
Moreover, 1 out of 131 operating EPPs were established by the gov-
ernment through an ETP. Some of the major activities in nuclear power
the value in the earlier year. The main consumer was the industrial
plants are run by the MNPC with the cooperation of NEPIO and TSO,
sector in Peninsular Malaysia, contributions to 43.6% of the entire
although the nuclear timeline is unclear [21]. The authentic choice for
consumption in 2012. Fig. 18 shows the forecasted peak demand and
the development of projects for nuclear power programs could be as-
reserve margin projected up to 2030, in which the peak demand grows
certained by the national government after considering the details of
proportionately annually while the reserve margins decrease sharply
existing studies.
[77].
One may ask whether Peninsular Malaysia needs to develop nuclear
plants despite the large gap in the reserve margin. At present, the peak
demand monitored in 2016 was 18,338 MW (Table 6) [51]. This figure 5.2. Renewable energy program
translates into a 40% reserve margin [41,59]. This level of reserves
should be used to maximize profits. According to an annual load growth The potential for hydro energy in Peninsular Malaysia is lower than
and suspension of present capacity to meet economic needs, the reserve that in Sarawak and Sabah. The share of hydropower in the Peninsula is
margin should be reduced. Demand for electricity is expected to rise by projected to rise from 5% in 2008 to 35% in 2030 [86]. This figure is
3–5% annually from 2010 until 2030 in Peninsular Malaysia alone. By considered minimal in relation to the high electricity demands in the
2030, peak demand is estimated at 24,770 MW with a growth rate of Peninsula. In addition, the residual potential in Peninsula is at a peak
1.4% per annum [19,46,68,77]. Given such statistics, Peninsular Ma- with inadequate energy. An additional issue with hydro energy is that it
laysia does not appear to need the new plant scheduled for 2018. The requires a sizeable area, resulting in the possible uprooting of native
reserve margin will naturally shrink over time without new plants to inhabitants from floating areas. This requirement may cause costs to
add capacity given the great demand for electricity and the retirement rise exponentially.
of existing plants. By 2018, the reserve should be an estimated 20% Malaysia seeks to promote RE as a main resource for power gen-
[19,68,77]. However, Fig. 18 shows obvious increasing demand and eration by introducing the Five-Fuel Policy. At present, RE has been
declining reserve margin without considering the introduction of new developed in Peninsular Malaysia under the SREP program. SREP is a
loads to the system. In the case peak demand of 15,826 MW, which was mechanism based on a ready-buyer-and ready-seller system developed
monitored on June 2012, the total generation was 108,443 GWh from 1 under the REPPA. This operation began between SREP and TNB
January to 31 December 2012, indicating a rise of 2.6% compared with [79,87]. Thus far, 59 applications have been received (Table 7). Only
29% of the applications have been approved by REPPA, with the overall

Table 5
TNB tariff rates for domestic and low voltage commercial entities [54,81].
Tariff Category Unit New Rates (1 January 2014)

1. Tariff A – Domestic Tariff sen/kWh 21.80

For the first 200 kWh (1–200 kWh) per month
For the next 100 kWh (201–300 kWh) per month sen/kWh 33.40
For the next 300 kWh (301–600 kWh) per month sen/kWh 51.60
For the next 300 kWh (601–900 kWh) per month sen/kWh 54.60
For the next kWh (901 kWh onwards) per month sen/kWh 57.10
The minimum monthly charge is RM 3.00
2. Tariff B - Low Voltage Commercial Tariff sen/kWh 43.50
For the first 200 kWh (1–200 kWh) per month
For the next kWh (201 kWh onwards) per month sen/kWh 50.90
The minimum monthly charge is RM 7.20

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M.A. Hannan et al. Renewable and Sustainable Energy Reviews 94 (2018) 551–564

Fig. 17. CO2 emissions from the consumption of natural gas, coal, and petroleum (million metric tons) [85].

Table 6 government under the RE Act and Action Plan in 2012. FIT involves
Long-term load forecast as approved by the planning and implementation buying power from RE developers at best rates [88,89]. The expansion
committee for electricity supply and tariff in 2012. of RE is expected to thrive. Nevertheless, the government must still
Year Peak Demand MW Growt% Year Peak Demand MW Growt% seriously consider nuclear energy given the intermittency of RE, the
cost of technology, and distant location of some RE sources. The de-
2003 11,329 5.1% 2017 18,926 3.2% velopment of RE should last, and with upcoming technological devel-
2004 12,023 6.1% 2018 19,558 3.3%
opment, further assistance for RE could be expected. However, this
2005 12,493 3.9% 2019 20,149 3.0%
2006 12,990 4.0% 2020 20,847 3.5% development might not transpire in the present or near future. There-
2007 13,620 4.8% 2021 21,456 2.9% fore, the government must examine alternatives, such as nuclear re-
2008 14,007 2.8% 2022 21,908 2.1% sources.
2009 14,245 1.7% 2023 22,067 0.7%
2010 15,072 5.8% 2024 22,490 1.9%
2011 15,476 2.7% 2025 22,900 1.8% 5.3. Future energy sources
2012 15,826 2.3% 2026 23,298 1.7%
2013 16,562 4.6% 2027 23,685 1.7%
2014 17,131 3.6% 2028 24,058 1.6%
Nuclear plants are crucial for electrification in Peninsular Malaysia
2015 17,671 3.2% 2029 24,420 1.5% as they will enhance the reliance of the mix generation on different
2016 18,338 3.8% 2030 24770 1.4% energy resources. At present, Peninsular Malaysia depends on gas. In
2008/2009, 65%, 29%, and 6% of electricity generation were derived
from gas, coal, and hydro energy [88]. If this trend continues, then most
Peak Demand MW reserve margin of Malaysia's fuel sources, including gas, will be imported. Fossil fuel
30,000
will be replaced on a real-time basis. In that scenario, any trouble on the
20,000 supply side could pose a serious threat to meeting the desired demand
[90].
10,000 Nuclear power generation is unlike any other technology. It involves
fuel loaded once in an 18–24 month cycle. The long fuel cycle allows for
0 planning, improves confidence, and reduces supply security threats. By
contrast, natural gas for the future could entail imported fuel. Petronas
stated that Malaysia's natural gas is decreasing [35,90]. Currently,
Fig. 18. Demand forecast and reserve margin curve [77]. natural gas is derived from local fields in addition to exports from West
Natuna Island and from joint development areas. However, most of
Table 7 these local sources will soon be depleted, indicating that Peninsular
Current status of RE power generation through the RE power purchase agree- Malaysia cannot rely on gas alone for electricity.
ment. Now, electrification using coal is completely reliant on import from
countries such as South Africa, Australia, and Indonesia. Possible in-
No. Item No. Capacity (MW)
terruption in supply is a serious threat to the nation. Countries ex-
1 April 2010-REPPA signed 17 88.15 porting coal could suddenly change their policies in the upcoming years
Project commissioned (COD) 6 24.7 because of their own consumption and increasing demand. Add to these
REPPA signed 8 41.45
considerations the intense competition from countries, such as India
REPPA terminated 3 22
2 Project not signed 14 108.9 and China, for coal given the rapid growth of such nations. Similarly,
3 Project not yet approved by SCORE 4 30 Japan, Korea, and Taiwan are also competing for coal. This circum-
4 Project rejected by EC 7 37 stance will certainly cause the price to increase in the future. Politics
Total applications 59 264.05 and logistics are other concerns arising from the generation of elec-
tricity from coal sources. Difficulties may arise because of bad weather
or labor regulations. These situations place great risk on energy security
capacity reaching 88.15 MW [87]. Only six plants are currently op-
if the country relies on a single source for energy generation.
erational with an entire capacity of 24.7 MW. This figure means that RE
has not been developed significantly. The slow development of RE may
result in a lack of healthy commercial mechanisms to assist in the 5.4. Conflict between nuclear and renewable energies
growth of RE. However, the FIT scheme was presented by the
The progress of RE as the fifth fuel will not be affected by the

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development of nuclear power. The early plans of Malaysia in hydro power plants connected to national electricity networks. Me-
2006–2010, i.e., the Ninth Malaysian Plan, reveal that the target of RE chanisms like this have been employed in countries such as the USA,
was 300 MW. However, RE development is managed by SREP and di- Spain, and Germany, and they have successfully encouraged the growth
rected by the Suruhanjaya Tenaga official energy commission [91,92]. of clean energy.
That target could not be achieved because of the sluggish im- In conclusion, relative to RE, nuclear plants are essential for serving
plementation of RE. Nevertheless, in 2012, Malaysia became highly the bulky base load supply given its continuous production and output.
committed to developing RE, given the implementation of the RE Act By contrast, RE cannot provide a secure source of energy. Even though
and Action Plan. its development is undoubtedly robust in terms of providing absolutely
Nuclear energy is considered clean energy. However, debates con- clean energy that could protect the environment, fuel diversification is
tinue about whether it qualifies as RE. Comparing RE and nuclear essential to avoid potential disruptions in energy supply and cope with
plants is not a fair practice. Wind, solar, or biomass sources could the ongoing development of green technology [91,92].
generate clean and infinite energy without actual fuels but not in a
manner that is similar to the generation of energy from nuclear sources. 6. Challenges and future perspective view of energy policy in
Normally, a nuclear power plant generates continuous power at Malaysia
constant output and would generally run at 80% of its capacity or more
[93,94]. Output from nuclear plants does not need to be adjusted to the The major challenges that could arise in the Malaysian power sector
daily demand because of complications of component designs. The are as follows.
plants will only be shut down when it is time to fill the fuel. Different
types of reactors, such as the PWR, are available. The fuel loading for 6.1. Energy policy
this type of reactor is prepared once every 15–18 months and takes one
month to accomplish. Until the next fuel filling, these types of plants As a rapidly developing country, Malaysia presents a rapidly in-
operate at maximum capacity. Besides filling the fuel, major assess- creasing energy consumption, leading to pressures on its reserved nat-
ments and inspections of plant components are required. The char- ural sources for forthcoming demand. These issues require the de-
acteristics of nuclear plants make them appropriate for Peninsular pendability and safety of energy supply and the expansion of different
Malaysia because they supply the base load requirements. At present, energy sources. The diversification of energy ensures that the country is
the minimum demand stands at approximately 10,000 MW. This not reliant on a single energy source. Such approach is also significant
minimum demand, which include gas and coal, must be served by base for minimizing the negative impact of current energy sources on the
load plants. In that case, nuclear plants will be among the essential environment. Conversely, green energy resources are extremely costly.
plants operating as base load supply [95–98]. Malaysia is suffering from economic issues, and this situation will be a
Employing RE to meet the load demand is extremely difficult as key challenge to its investment in sustainable energy sources. In this
challenges remain in terms of small capacity generation. For example, a case, the government can encourage the private sector to become in-
station for a PV solar farm has a production capability of approximately volved in improving the energy sector. Such participation depends on
10–60 MW, with the largest PV solar plant installed in Spain producing the plans and policies that motivate private enterprises to assist the
60 MW. By contrast, nuclear plants can produce 600–1000 MW. As government. An awareness program encourages the public to save
such, an enormous difference exists between the energy produced by RE electricity. The Malaysian government must search for new solutions
and by nuclear plants, especially in relation to the base load supply. RE contrary to other extensively used technologies. Notably, investment in
operates on a small scale and can thus only be considered as a sup- sustainable energy sources in 2008 was defined by the global recession.
plement for addressing minor demands or aiding remote areas. Therefore, the county's policy must be optimized such that recession
Therefore, until now, trusting RE generation for total power is im- can be avoided while investing in green technology. The Malaysian
possible [40,80,90]. government has recently adopted the National Green Technology Policy
Furthermore, many concerns remain over the intermittency of RE. that ensures the long-term sustainability, reliability, and security of
Sunlight radiation in Peninsular Malaysia (which is located in the energy supply for continuous development and growth. The govern-
equatorial region) is approximately 4500 kWh/m2 on average. Malaysia ment is also considering adopting nuclear technology to meet the
essentially receives four to six hours of sunshine daily on average growing electricity demand. However, after several incidents with
[38,99,100]. Although solar energy provides a promising future for the Japan's nuclear power plant, the Malaysian public are concerned about
country, it requires high capital investment and a large area to generate the possible consequences of its implementation. Hence, the situation
a reasonable amount of electricity [36,40,45]. must be carefully managed by creating widespread policies. There is,
As regards wind energy, implementation and possibilities are ex- therefore, in future it is very important to carefully manage the situa-
tremely limited in Peninsular Malaysia. Numerous research have been tion by creating widespread policies.
conducted by different universities and parties on the capability of
exploiting wind energy in several areas in the Peninsula 6.2. High voltage transmission line issues
[19,67,101–103]. However, results indicate the low wind potential in
the area. Peninsular Malaysia will surely face an energy crisis given the de-
Other RE sources, including biomass, solid waste, and biogas plants, pletion of the natural sources for electricity, which is expected to be
are undergoing serious development. To date, 88 MW of RE projects completely exhausted by 2030. The electricity generated from Sarawak
have agreed upon by SREP, with an expected 40.35 MW produced from and Sabah must then be transmitted to Peninsular Malaysia. Given the
biogas and biomass sources. Compared with solar and wind sources, distance between the areas, an undersea transmission line is required to
these sources do not face intermittency problems. They can produce supply electric power to Peninsular Malaysia. At present, to send
electricity at any time. However, some of these sources use “dirty” 2400 MW of generated electricity from the Bakun Dam hydro power
technology because of the need to burn the input sources to produce plant, the transmission line would require approximately 730 km HVDC
electricity. and 670 km submarine undersea power cable. However, enormous
One of the main concerns facing RE development is the sizable ca- potential for producing electricity is noted in the hydroelectric plants in
pital investment. This cost may be offset via the FIT mechanism in- the rivers of Sarawak. The Malaysian government is pursuing this
itialized along with the RE Act and Action Plan in 2012 [46,104]. FITs project, but connecting new transmission lines for additional power
are officially assured payments for electricity service providers gener- transmission to Peninsular Malaysia is a considerable challenge. The
ated by green technologies, including solar, wind, biomass, or small installation cost of the transmission line is approximately US$ 3.5

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M.A. Hannan et al. Renewable and Sustainable Energy Reviews 94 (2018) 551–564

billion, and that figure is estimated to increase the number of parallel Malaysia. Fossil fuel burning is a vital issue for power development
transmission lines to guarantee backup transmission and additional projects. Total CO2 emission is increasing, and an estimation in 2010
power transmission. The total cost will increase with the installation of indicates a value of 216804, which is 0.69% of total global emissions
each additional transmission line. In addition, Association of Southeast [83]. Therefore, the usage of fossil fuels will significantly contribute to
Asian Nations (ASEAN) including Malaysia has planned to develop the emission of GHG from their combustion, thereby exacerbating the
ASEAN grid for sustainable electricity export-import practices. climate changes issue significantly. The Malaysian government must
However, there are major barriers and technical challenges for estab- find alternative sources of development and move up the value chain.
lishing an ASEAN power grid. Therefore, in future, it need develop Accordingly, the Malaysia is on track to reduce carbon emissions by
policies and techniques to overcome the limitations associated with the 40% within coming few years for a cleaner environment for future
establishment of the ASEAN power grid, as well as future research di- generations and 45% by 2030, and be fully carbon neutral by 2050.
rection in enhancing the utilization of Malaysian power grid.

6.3. Renewable energy projects 7. Conclusion and recommendation

A five-fuel diversification strategy energy mix was approved by The main contributions of this review are to highlight Malaysian
Malaysia in 1999. Oil, natural gas, coal, hydro, and RE are considered energy policies and indicators to manage increasing energy demand,
as the five main energy sources. As an alternative source of future en- utilization of RE, promoting energy efficiency and improving environ-
ergy and part of green energy, RE projects are encouraged by the mental performance in achieving sustainable development. Several
government. Only RE is environmentally friendly, abundant, and un- energy policies have been discussed including policies on energy
tapped. Therefore, the government promotes RE. However, the per- supply, utilization and emission, renewable energy, production, con-
centage of RE implementation is low because of its high installation sumption, and energy efficiency and feed-in tariffs. A total of 14 energy
costs. RE is generated on a small-scale basis, although Malaysia has indicators have been comprehensively explained and categorized as
abundant RE resources. The government exerted effort to introduce the environmental, economic and social impacts on energy considerations
SREP Program in 2001, covering biomass, biogas, landfill waste, and to improve energy efficiency, guarantee sufficient energy supply, ex-
mini-hydro plants. Recently, solar PV and wind have become areas of pand the RE sources and reduce the GHG emissions, respectively. In
focus to increase electricity generation. In the Tenth Malaysian Plan, addition, the review has addressed future energy planning and options
the target amount of electricity generated from RE is set at 5.5% of the in Malaysia including the nuclear and renewable power program.
total electricity generation, which was 98 MW in 2015. Meeting this Furthermore, the review also highlights the various issues and chal-
target is certainly a challenge. To overcome challenges, under the New lenges for introducing future policy implementation. Finally, the review
Economic Policy (NEP) and government-linked companies’ involve- also provides some selective suggestions for further improvement in
ment a free-market economic policy and blue ocean strategies should be achieving sustainable development in Malaysia.
deployed to encourage the growth of RE inclusion in the system.
Accordingly, the Ministry of Energy, Green Technology and Water, i. Malaysia's extreme dependence on exporting natural gas and oil to
Malaysia is developing the Renewable Energy Transition Roadmap sustain its economic growth will be short-lived and therefore, it is
2050 as a successor to the incumbent National Renewable Energy an urgent need to switches conventional power to sustainable re-
Policy and Action Plan. sources. The government should promote RE resources through
various incentive plans to ensure reliability and security of energy
6.4. HVDC line construction supply as well as to achieve long-term sustainability.
ii. The electricity tariff rate should require more reasonable tariff
As HVDC is the preferred choice for renewable generation, the subsidies for distribution among different income groups.
construction of HVDC is a major challenge for Malaysia. In transmitting iii. Various awareness-raising programs need to be organized to alert
huge amounts of power with minimum losses, HVDC rather than HVAC the consumers and industry for the efficient utilization and con-
lines should be adopted. Few HVDC projects are extant in Malaysia. To sumption of energy.
ensure maximum area coverage by electrification and generation from iv. The government should introduce effective plans and policies to
renewable sources, establishing the infrastructure to facilitate power motivate private enterprise to become involved in improving the
transfer and extreme generation from RE is essential. Safeguarding the energy sector.
path of electricity flow is also a chief concern. Controllability, efficiency v. The government of Malaysia needs more attention on rural elec-
of power transmission, and HVDC technology are now preferred. trification program
Hence, HVDC is a key technology in overcoming a significant issue with vi. The Malaysian government should take effective measures to re-
RE generation, such as with wind, solar and hydro resources, as these duce CO2 emission and should focus on clean development me-
resources are not often located close to the population centers that need chanism implementation.
them. However, initial investment for HVDC is more expensive than vii. The Malaysian government must decide whether to invest millions
that for HVAC. According to the ASEAN HVDC transmission planning, in green technology or nuclear plants. Nuclear energy is en-
peninsular Malaysia and Sumatera HVDC interconnection development vironmentally friendly when under control but can pose serious
is in progress under power exchange agreement (PEA) and inter- threats if unstable.
connection agreement (IA) which will operate on commercial basis
instead of strategic basis. These recommendations would be a significant contribution to-
wards the achievement of future energy security and sustainability in
6.5. Greenhouse emissions Malaysia through the execution of various effective policies.

In Malaysia, natural gas and coal are the main resources responsible
for emitting GHG emissions in the energy mix, followed by hydro en- Acknowledgement
ergy sources. Oil is rapidly depleting, causing it to no longer be re-
cognized as a feasible source for generating electricity. Nowadays, it is This work was supported by the Universiti Tenaga Nasional Bold
used only as backup supply for emergencies. The toxic emissions from Multi-Track Incentive under Grant 10289176/B/9/2017/36.
the burning of fossil fuels that cause climate concerns also affect

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