Ingenieur Vol. 75 ingenieur July 2018-FA | Page 32

INGENIEUR
ASIANPOWER
Recent developments within the Malaysian
solar power sector attest to the fact that the
renewables sector is becoming an attractive
investment destination for renewables developers.
The continuation of auctions in the country and
the successful commissioning of the projects
contracted, presents a sizeable upside risk to our
forecasts.
Thankfully, Malaysia’s well-established solar
manufacturing sector ensures that there is a
reliable and low-cost supply chain for solar project
developers.
As a result, the project pipeline, notably for
biomass and solar projects, is strengthening
accordingly. The Government’s commitment to the
domestic renewables sector has strengthened of
late, and a number of regulations have been put
in place to encourage investment into the sector,
including feed-in tariffs, tax incentives and, more
recently, renewable energy auctions.
Robust growth is expected in non-hydro
renewables capacity over the coming decade, with
annual average growth rates of 8.5% between
2018 and 2027. This will result in non-hydro
renewables capacity totalling 3.3GW by 2027.
More renewable energy projects
expected in the near term - Sunbiz
More renewable energy (RE) projects are expected
to come up for bids in the near term in Malaysia
as the new Energy, Green Technology, Science,
Climate Change and Environment Ministry is
committed to push up the nation’s RE capacity.
While there is no indication of an ideal or target
reserve capacity, the new Minister indicated that
the abundant reserve capacity gives the industry
decent time to build up its RE capacity within the
next three to seven years, without the need for
much more major new plant start-ups in the near-
term.
This suggests in the near future, sector
opportunities could tilt heavily towards RE project
awards and a dearth of future fossil fuel plants,
MIDF added that the Ministry aims to reduce
the reliance on imported fuel by aggressively
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increasing the RE contribution to the mix from just
2% currently to 20% “in the future”.
It said the push for RE is not entirely new and
efforts had been taken previously to increase RE
contribution to the system such as the Large Scale
Solar (LSS) projects.
Solar accounts for the bulk of Malaysia’s RE.
However, there is the issue of getting RE sources
to reach grid parity for it to be cost competitive
and gain a larger share of generation mix without
burdening end-consumers.
MIDF also noted that given the indication of
excessive reserve capacity, the pace of any major
plant start-ups in the near-term is likely to be
impacted.
It added that although the new Minister’s
intention is to champion RE, it opined that the
shift is for RE to eventually dilute contribution
from fossil fuel rather than near-term, outright
replacement.
There is the issue of feasibility to induce RE in
a big way into the system too which will have to be
sorted out.
The Energy-Transformation Nexus -
UNCTAD
Access to electricity is essential for the
structural transformation of the economies of
the least developed countries. Equally, such
a transformation is essential to electricity
access. The viability of investments in electricity
infrastructure depends critically on demand;
and structural transformation directly generates
demand in production processes and also
strengthens domestic demand by raising
household incomes. This two-way relationship
– the energy–transformation nexus – is central
to the development process, and essential to
universal electricity access in the least developed
countries.
However, there are limits to the productive use
of electricity brought about by transformational
energy access alone, because of other constraints
on producers. Energy and development strategies
therefore need to be closely co-ordinated.
Insufficient demand for electricity will slow the
development of modern energy systems, yet
if energy demand for productive use remains