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Saturday, January 11, 2014
Info Sharing
Saturday, January 4, 2014
RENEWABLE ENERGY - FROM WASTE TO WEALTH
ABSTRACT
Soaring energy prices, energy and
environment security, concerns about fossil fuels supplies are a reminder of the essential role that more
affordable energy plays in sustaining economic growth and higher human
development. Safeguarding energy supply, especially from clean indigenous
resources, has become more pressing than ever. The degradation of our environment
due to energy production from fossil fuels, have contributed to a global
reevaluation of energy use in all economic sectors. The need for sustainable
energy use has become more and more evident, and drawing considerable attention towards renewable energy
sources, which are abundant, more easily accessible, untapped, inexhaustible and
environmentally friendly. Malaysia
currently relies heavily on fossil
fuels (oil and gas) for its electricity generation. However with their
depleting reserves, and the projected upward trend of commercial energy demand,
Malaysia is strenghtening the role of Renewable Energy (RE) as the fifth
cornerstone, and more sustainable form of energy generation. This paper gives an introduction to RE - its sources and importance, giving
emphasis to the significance of biomass as a source of RE in Malaysia. With abundant sources available, biomass which
is the fourth energy
resource after coal, oil and natural gas, and has been used as a fuel for
millennia in many parts of the world, especially in developing countries, it is likely to become ever more prominent in
adopting RE. Biomass is
rapidly moving towards the mainstream as an alternative source of energy, and
has been gathering momentum since the 1970’s oil prices and availability crises.
This owes to the fact that Malaysia is bestowed
with exuberant resources especially in palm oil industry, which contributes 85.5% of the total biomass
production in Malaysia. The industry offers
a great potential and is
envisaged to contribute to an increasing share of Malaysia’s large-scale electric
power generation. The emerging palm biomass
industry in Malaysia is also foreseen to dominate the country’s directional
development in the coming years, particularly in the light of heightened global sustainability awareness. The business
trend in the Malaysian biomass industry; potentials and prospects; issues, challenges
and outlook over the future of Malaysia’s renewable energy are also discussed.
1.0 INTRODUCTION
Energy is essential to modern life. Many people in developed countries take for granted that energy will be readily accessible to them at all times - to provide light when dark, to cool their homes, to provide clean water, to charge their mobile phones and laptops - whenever and wherever needed.
Energy is essential to modern life. Many people in developed countries take for granted that energy will be readily accessible to them at all times - to provide light when dark, to cool their homes, to provide clean water, to charge their mobile phones and laptops - whenever and wherever needed.
However, almost half the world’s population currently live without modern energy. Projections show that the situation is likely to be the same in two decades time. As a result, billions of women, men and children will be denied the power to challenge their poverty. Energy poverty denies people a basic standard of living which should be available for all. To fulfil the right to energy for everyone, the biggest challenge lies in providing access to energy for the poorest sectors of the population - those without capital, capacity, knowledge and influence; those whom private sector energy suppliers are not interested in serving. This lack of access to efficient modern energy has a significant impact on economic development and small-scale enterprises, educational opportunities, infant mortality, drudgery for women and quality of life. And not all energy poor people live in rural areas. Low-income people in urban and peri-urban areas also suffer from lack of access to energy services, and their numbers are likely to increase. It is predicted that almost 60% of the world's population will be living in urban and peri-urban areas by 2030, and services there are not expected to grow commensurately.
The pursuit for economic growth which is compounded with insatiable thirst for energy, where the majority of resources come from fossil fuels, has resulted in serious environmental consequences being confronted by global community.
A sustainable renewable energy industry would be able to complement the world’s energy needs, and address the energy security issue while contributing to the conservation of the natural environment. Our planet is under enormous environmental strain because of how we manage our energy and economy. Everyone must see the need to be involved, make long-term decisions to use alternative clean and green energy while advocating the efficient utilization of energy resources.
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| An illustration showing the various sources of renewable energy |
1.1 What is Renewable Energy?
Renewable energy refers to energy derived directly from natural resources such as sun, rain, wind, and waves. There are several types of energy derived from natural sources such as solar energy from the sun, biomass energy derived from waste plants, and geothermal energy uses the natural earth energy as heat volcanic eruptions.
Renewable energy refers to energy derived directly from natural resources such as sun, rain, wind, and waves. There are several types of energy derived from natural sources such as solar energy from the sun, biomass energy derived from waste plants, and geothermal energy uses the natural earth energy as heat volcanic eruptions.
1.2 Types of Renewable Energy
The types of renewable energy is dependent upon the sources obtained. These renewable energy sources are more environmentally friendly as compared to other sources of nonrenewable energy such as fossil fuel, gasoline, natural gas and coal.
The types of renewable energy is dependent upon the sources obtained. These renewable energy sources are more environmentally friendly as compared to other sources of nonrenewable energy such as fossil fuel, gasoline, natural gas and coal.
1.2.1 Tidal Energy
Tidal energy is generated by placing turbine generators in areas with strong sea tides because the gravitational force of the moon and tidal sea level helps turbine to generate power.
Tidal energy is generated by placing turbine generators in areas with strong sea tides because the gravitational force of the moon and tidal sea level helps turbine to generate power.
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Tidal flow activates the turbine to produce electricity
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1.2.2 Wave Energy
Wave energy is the energy produced by using the same ocean tides as in tidal power generation. Normally, power generation is done in facilities near coastal areas where the waves are strong enough to generate power.
Wave energy is the energy produced by using the same ocean tides as in tidal power generation. Normally, power generation is done in facilities near coastal areas where the waves are strong enough to generate power.
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Electricity generation using wave energy
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1.2.3 Solar Energy
This is the energy converted from sunlight that reaches the earth's surface. Operating costs are too high. Solar power is generated using the resources that can always be replenished compared with the resources of non-renewable energy such as coal and gasoline.
This is the energy converted from sunlight that reaches the earth's surface. Operating costs are too high. Solar power is generated using the resources that can always be replenished compared with the resources of non-renewable energy such as coal and gasoline.
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Solar photovoltaic panels are used to generate electricity
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1.2.4 Biomass Energy
The use of biomass energy has the potential to reduce the greenhouse gas effect. The amount of carbon dioxide generated by the biomass is similar to the generation of carbon dioxide from fossil fuels. Fuels made from plant materials have a neutral carbon footprint because of the amount of carbon dioxide produced by the burning of fossil fuels is roughly equal to the amount used by plants to grow up.
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The process of generating electricity using biomass resource
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1.2.5 Geothermal Energy
Shots of hot springs or volcanoes can be beneficial in the production of electricity through natural heating and cooling. Power generation process is more dependent on the heat generated from the earth naturally.
Shots of hot springs or volcanoes can be beneficial in the production of electricity through natural heating and cooling. Power generation process is more dependent on the heat generated from the earth naturally.
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| Generator is also used to convert pressurized steam into electrical energy |
1.2.6 Wind Energy
Wind is produced by changes in air temperature due to the heat and sun. So, the wind has been used to grind grain with windmills because at that time people have understood the power of the wind since the first windmill was built.
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| Prevailing wind is used as an energy source to generate electricity |
1.2.7 Hydroelectric Energy
Hydroelectric power is produced by the force of rapidly gushing water. For example, Pergau Dam which generates electricity supply to a local catchment population.
Hydroelectric power is produced by the force of rapidly gushing water. For example, Pergau Dam which generates electricity supply to a local catchment population.
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| Rapidly flowing water turns the turbines to generate electric power |
1.3 The Importance of Renewable Energy
Today, many countries rely heavily on fossil fuels and nuclear power to generate their electricity. The result is a system that lacks diversity and security, threatens the health of their citizens, jeopardizes the stability of Earth's climate, and robs future generations of clean air, clean water, and energy independence. Fortunately, renewable energy resources such as wind, solar, bioenergy, and geothermal are capable of meeting a significant proportion of the world’s energy needs, and can help alleviate many of the problems mentioned above while providing other important benefits.
Today, many countries rely heavily on fossil fuels and nuclear power to generate their electricity. The result is a system that lacks diversity and security, threatens the health of their citizens, jeopardizes the stability of Earth's climate, and robs future generations of clean air, clean water, and energy independence. Fortunately, renewable energy resources such as wind, solar, bioenergy, and geothermal are capable of meeting a significant proportion of the world’s energy needs, and can help alleviate many of the problems mentioned above while providing other important benefits.
Fuel share of world total primary energy supply, 2004
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* Geothermal, solar, wind, tide/wave/ocean.
Original Source: International Energy Agency, Renewables in Global Energy Supply:
An IEA Fact Sheet, OECD, 2007, Figure 1.
Source : United Nations Development Programme (UNDP), Malaysia |
Although renewable energy still has a long way to go in order to replace fossil fuels and become primary source of energy consumption, there are several important reasons that call for a strong commitment to renewable energy development for the future of our society :
1.3.1 Environmental Benefits
Positive environmental impact is certainly one of the most important reasons. Renewable energy technologies are clean sources of energy that have a much lower environmental impact than conventional energy technologies. Fossil fuels when burn, create harmful greenhouse gas emissions and our planet is already feeling the impact of climate change. By using renewable energy instead of fossil fuels we would significantly protect our environment and public health by avoiding or reducing emissions that contribute to smog, acid rain, greenhouse gas and global warming; and by reducing water consumption, thermal pollution, waste, noise, and adverse land use, and this would have positive environmental
impacts for the entire planet.
Global sectoral consumption of renewables, 2004
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Original Source: International Energy Agency, Renewables in Global Energy Supply:
An IEA Fact Sheet, OECD, 2007, Figure 4.
Source : United Nations Development Programme (UNDP), Malaysia
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1.3.2 Sustainable Energy for the Future
Energy for future generations
Climate change and the need to manage diminishing fossil fuel reserves are, today, two of the biggest challenges facing the planet. In order to secure the future for ourselves and generations to follow, it is widely accepted that we must act now to reduce energy consumption and substantially cut greenhouse gases (GHGs), such as carbon dioxide. World leaders have resolved to tackle global warming by signing the Kyoto Protocol, an international treaty committing signatory countries to reduce their emissions of carbon dioxide and five other GHGs from 1990 levels.
Enhances quality of life
GHGs come from a variety of sources—power generation, transportation, agriculture and land use, manufacturing, and other activities. Fossil fuels—coal, crude oil and natural gas—release carbon dioxide during production and consumption. Fossil fuels also are the primary source of energy for the global economy, which is in the midst of a long-term expansion that is contributing to a rising quality of life in many parts of the world, particularly in developing countries.
GHGs come from a variety of sources—power generation, transportation, agriculture and land use, manufacturing, and other activities. Fossil fuels—coal, crude oil and natural gas—release carbon dioxide during production and consumption. Fossil fuels also are the primary source of energy for the global economy, which is in the midst of a long-term expansion that is contributing to a rising quality of life in many parts of the world, particularly in developing countries.
1.3.3 Jobs and the Economy
Increase economic development
Most renewable energy investments are spent on materials and workmanship to build and maintain the facilities, rather than on costly energy imports. Renewable energy investments are usually spent within the country, frequently in the same state, and often in the same town. This means the energy dollars stay home to create jobs and fuel local economies, rather than going overseas. Meanwhile, renewable energy technologies developed and built in the country are being sold overseas, providing a boost to the country’s trade deficit.
Most renewable energy investments are spent on materials and workmanship to build and maintain the facilities, rather than on costly energy imports. Renewable energy investments are usually spent within the country, frequently in the same state, and often in the same town. This means the energy dollars stay home to create jobs and fuel local economies, rather than going overseas. Meanwhile, renewable energy technologies developed and built in the country are being sold overseas, providing a boost to the country’s trade deficit.
Create new jobs
Renewable energy is not all about environment as it can also give strong boost to our economy in the form of new jobs. The number of people employed within the renewable energy industry is rapidly growing, giving many countries an excellent option to boost their economies in this post-recession period.
Renewable energy is not all about environment as it can also give strong boost to our economy in the form of new jobs. The number of people employed within the renewable energy industry is rapidly growing, giving many countries an excellent option to boost their economies in this post-recession period.
Fight against poverty and improve livelihood
The global clean energy race is very important and winners in this race will experience many political as well as economic benefits in years to come. Wind, geothermal, biomass – all of these sources have excellent potential to satisfy our energy needs. Renewable energy can help in fight against poverty by playing part in electrification of many rural areas in developing world. In these rural areas renewable energy is much cheaper energy option to satisfy energy needs as compared to traditional energy solutions. Renewable energy helps improve livelihood by increasing accessibility to better education and health.
The global clean energy race is very important and winners in this race will experience many political as well as economic benefits in years to come. Wind, geothermal, biomass – all of these sources have excellent potential to satisfy our energy needs. Renewable energy can help in fight against poverty by playing part in electrification of many rural areas in developing world. In these rural areas renewable energy is much cheaper energy option to satisfy energy needs as compared to traditional energy solutions. Renewable energy helps improve livelihood by increasing accessibility to better education and health.
1.3.4 Energy Security
Reduced dependency on foreign oil imports
With many oil producing countries facing depletion in their productions, many nations have increased its dependence on foreign oil supplies instead of decreasing it. This increased dependence impacts more than just the nation’s energy policy.
With many oil producing countries facing depletion in their productions, many nations have increased its dependence on foreign oil supplies instead of decreasing it. This increased dependence impacts more than just the nation’s energy policy.
Insulate our economy from fossil fuel price spikes
Renewable energy can improve our energy security by reducing the need for foreign oil import. The global oil market has been characterized by extremely volatile prices and the dependence on oil continues to grow. By switching to renewable energy and using more domestic renewable energy sources instead of importing foreign oil we would drastically improve our energy security and energy independence.
Improve political ties through technology sharing
On the other hand, renewable energy can also help improve political ties between countries by sharing technological know-how. Some large renewable energy projects could even be joined works of two or more different countries.
1.3.5 Reliablity, Stability and Safety
Infinite supply of energy sources
Renewable energy will not run out. Ever. Other sources of energy are finite and will some day be depleted. Renewable energy has abundant potential of many resources. The sun for instance has almost unlimited potential.
Renewable energy will not run out. Ever. Other sources of energy are finite and will some day be depleted. Renewable energy has abundant potential of many resources. The sun for instance has almost unlimited potential.
Enhances energy reliabilitity and reduce supply shortages or disruptions
Renewable energy offers a variety of different options to choose from. What this means is that countries can choose between sun, wind, biomass, geothermal energy, water resources, etc, depending on the potential of each of these sources. This diversity in fuel mix enhances the reliability of future fuel supplies, reduce supply shortages or disruptions.
1.4 Renewable Energy in Malaysia
Malaysia is endowed with an abundance of energy resources, both depletable and renewable resources.The importance of conserving and managing Malaysia’s natural resources is undoubtedly paramount because of the depleting conventional energy sources. Malaysia’s current fuel mix is skewed too much in favour of natural gas and coal - fuels that account for a majority of its electricity generation, much conflicting to the climate change issues that are becoming a serious global concern. Thus, we need to ensure that future energy production and consumption behaviour will spew minimal negative impacts on the environment.
Malaysia is endowed with an abundance of energy resources, both depletable and renewable resources.The importance of conserving and managing Malaysia’s natural resources is undoubtedly paramount because of the depleting conventional energy sources. Malaysia’s current fuel mix is skewed too much in favour of natural gas and coal - fuels that account for a majority of its electricity generation, much conflicting to the climate change issues that are becoming a serious global concern. Thus, we need to ensure that future energy production and consumption behaviour will spew minimal negative impacts on the environment.
1.4.1 Renewable Energy Development
The importance of renewable energy in Malaysia has been recognized since the Eighth Malaysia Plan when the Five Fuel Policy was introduced in 2001 to include renewable energy as the fifth fuel for electricity generation apart from oil, gas, coal and hydro power. The 10th Malaysian Plan has paved a path to ensuring that all parties receive the necessary support to further induce the growth of the sustainable energy sector. The Government’s Transformation Program (GTP) and the identification of renewable energy capacity development under one of the twelve National Key Economic Areas (NKEA) will complement of the growth of the new industry in pursuit of Malaysia to become a fully developed nation by 2020. The Government’s commitment in ensuring the availability of sufficient infrastructure and skilled workforce is proof of the country’s dedication towards a greener future, transforming Malaysia into a developed and high income nation as envisaged in Vision 2020.
The importance of renewable energy in Malaysia has been recognized since the Eighth Malaysia Plan when the Five Fuel Policy was introduced in 2001 to include renewable energy as the fifth fuel for electricity generation apart from oil, gas, coal and hydro power. The 10th Malaysian Plan has paved a path to ensuring that all parties receive the necessary support to further induce the growth of the sustainable energy sector. The Government’s Transformation Program (GTP) and the identification of renewable energy capacity development under one of the twelve National Key Economic Areas (NKEA) will complement of the growth of the new industry in pursuit of Malaysia to become a fully developed nation by 2020. The Government’s commitment in ensuring the availability of sufficient infrastructure and skilled workforce is proof of the country’s dedication towards a greener future, transforming Malaysia into a developed and high income nation as envisaged in Vision 2020.
Several factors have hampered the development of renewable energy in Malaysia in the past, namely : (Ramasamy, 2010)
- the weaknesses of current market structure;
- economic, financial and technological constraints;
- the absence of legal framework and institutional framework to meet the information and technology needs of the industry.
Renewable energy development in Malaysia with regards to the 5-year Malaysia Plan can be summarized in Table below.
Table 1 : Malaysia RE Development Progress
under the Respective Malaysia Plan
under the Respective Malaysia Plan
Source : Sustainable Energy Development Authority (SEDA), 2012
1.4.2 Renewable Energy Policy
The Chronology :
- 2nd April 2010: National Renewable Energy Policy & Action Plan approved by Government of Malaysia
- 10th Jun 2010: 10th Malaysia Plan (chapter 6)
- 15th Oct 2010: National Budget 2011 (paragraph 34)
- 25th Oct 2010: Economic Transformation Programme (chapter 6)
Policy Statement :
- Enhancing the utilization of indigenous renewable energy resources to contribute towards national electricity supply security and sustainable socioeconomic development.
Objectives :
- To increase RE contribution in the national power generation mix;
- To facilitate the growth of the RE industry;
- To ensure reasonable RE generation costs;
- To conserve the environment for future generation; and
- To enhance awareness on the role and importance of RE.
Strategic Thrusts :
- To introduce the appropriate legal framework;
- To create a conducive business environment for RE;
- To intensify human capital development;
- To enhance RE R & D; and
- To create public and stakeholder awareness & RE policy advocacy programmes.
Malaysian Renewable Energy Targets under
The National Renewable Energy Policy
The National Renewable Energy Policy
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| Note : Recapacity achievements are dependent on the size of RE fund • Assumptions : - Feed-in Tariff (FiT) implemented - 15.6% compound annual growth rate (CAGR) of RE power capacity from 2011-2030 Source : Sustainable Energy Development Authority (SEDA), 2012 |
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| Photos above show the work under progress for the installation of solar photovoltaic renewable energy complex for Kuala Lumpur International Airport (KLIA) in Sepang, Selangor |
Renewable Energy Generation 2009 -2015
Source : Ministry of Energy, Green Technology and Water, 2012
The above Figure shows that RE contribution will increase from <1% in 2009 to 5.5% of Malaysia’s total energy generated by 2015.
Distribution of Renewable Energy Resources, Malaysia
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| Source : Sustainable Energy Development Authority (SEDA), 2012 |
2.0 BIOMASS ENERGY
Biomass energy is a unique form of renewable energy and carbon neutral. This is because the carbon emissions released during the biomass energy conversion process at biomass electricity generating facilities are from carbon that was captured and removed from the atmosphere during the growth of the biomass, thus creating a carbon cycle. The carbon dioxide is then reabsorbed from the atmosphere through photosynthesis.
The physical and chemical properties of different biomass materials play a very important role in determining the most suitable technology to be used for fuel processing and conversion to energy in order to optimize conversion efficiency.
Biomass energy is a unique form of renewable energy and carbon neutral. This is because the carbon emissions released during the biomass energy conversion process at biomass electricity generating facilities are from carbon that was captured and removed from the atmosphere during the growth of the biomass, thus creating a carbon cycle. The carbon dioxide is then reabsorbed from the atmosphere through photosynthesis.
The physical and chemical properties of different biomass materials play a very important role in determining the most suitable technology to be used for fuel processing and conversion to energy in order to optimize conversion efficiency.
2.1 What is Biomass
Biomass is biological material derived from living, or recently living organisms. In the context of biomass for energy this is often used to mean plant based material, but biomass can equally apply to both animal and vegetable derived material. Biomass is carbon based and is composed of a mixture of organic molecules containing hydrogen, usually including atoms of oxygen, often nitrogen and also small quantities of other atoms, including alkali, alkaline earth and heavy metals. These metals are often found in functional molecules such as the porphyrins which include chlorophyll which contains magnesium.
Biomass is biological material derived from living, or recently living organisms. In the context of biomass for energy this is often used to mean plant based material, but biomass can equally apply to both animal and vegetable derived material. Biomass is carbon based and is composed of a mixture of organic molecules containing hydrogen, usually including atoms of oxygen, often nitrogen and also small quantities of other atoms, including alkali, alkaline earth and heavy metals. These metals are often found in functional molecules such as the porphyrins which include chlorophyll which contains magnesium.
2.2 Biomass Resources
Biomass resources include agricultural residues; animal manure; wood wastes from forestry and industry; municipal green wastes; sewage sludge; and dedicated energy crops such as short rotation (3-15 years) coppice (eucalyptus, poplar, willow), grasses, sugar crops (sugar cane, beet, sorghum), starch crops (corn, wheat) and oil crops (soy, sunflower, oilseed rape, jatropha, palm oil). Organic wastes and residues have been the main biomass sources so far, but energy crops are gaining in importance and market share. Residues, wastes, and begasse are primarily used for heat and power generation. Sugar, starch and oil crops are primarily used for fuel production.
2.3 Biomass in Malaysia
Annually, a minimum of 168 million tonnes of biomass waste is generated in Malaysia. In general, palm oil waste accounts for 94% of biomass feedstock while the remaining contributors are agricultural and forestry by-products, such as wood residues (4%), rice (1%), and sugarcane industry wastes (1%). By 2010, up to 4.5 million hectares of land is cultivated with oil palm, which translates to 13.6% of the country’s total land area. The palm oil industry generates an abundant amount of by-products, especially through its processing. With more than 423 mills in Malaysia, this industry generated around 80 million dry tonnes of biomass in 2010. Some of the major contributors to biomass in Malaysia are elaborated in the preceding sub-topics.
Annually, a minimum of 168 million tonnes of biomass waste is generated in Malaysia. In general, palm oil waste accounts for 94% of biomass feedstock while the remaining contributors are agricultural and forestry by-products, such as wood residues (4%), rice (1%), and sugarcane industry wastes (1%). By 2010, up to 4.5 million hectares of land is cultivated with oil palm, which translates to 13.6% of the country’s total land area. The palm oil industry generates an abundant amount of by-products, especially through its processing. With more than 423 mills in Malaysia, this industry generated around 80 million dry tonnes of biomass in 2010. Some of the major contributors to biomass in Malaysia are elaborated in the preceding sub-topics.
The Biomass Sources, 2013
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| Source : BioEnergy Consult |
Share of Renewable Energy Resources, Malaysia, 2005
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| Source : BIOMASS UTILIZATION IN MALAYSIA : CURRENT STATUS OF CONVERSION OF BIOMASS INTO BIOPRODUCTS Mohamed Ali Hassan & Shahrakbah Yacob, UPM, 2005 |
2.2.1 Agricultural Residues
• Most abundant in Malaysia (> 70 million tonnes annually)
• Production of biomass throughout the year due to high sunlight intensity/time and high rainfall
• Main contributor of biomass – palm oil industry
- Empty fruit bunches (EFB)
- Palm oil mill effluent (POME)
- Mesocarp fiber
- Palm kernel shells
- Palm kernel cake (residue)
• Mainly ligno-cellulosic materials
2.2.2 Palm Oil Biomass
Out of palm oil processing yield, only 10% are finished products i.e. palm oil and palm kernel oil, and the remaining 90% are harvestable biomass waste in the form of empty fruit bunches (EFB), palm kernel shell (PKS), palm oil mill effluent (POME), and palm kernel cake (PKC). (http://www.besustainablemagazine.com/cms2/malaysias-biomass-potential/)
• Biomass production (2003)
- Empty fruit bunch (EFB) – 14 million tonnes
- Palm kernel shell - 8 million tonnes
- Mesocarp fiber – 5 million tonnes
• Abundant and concentrated in the mills (business as usual)
• Most abundant in Malaysia (> 70 million tonnes annually)
• Production of biomass throughout the year due to high sunlight intensity/time and high rainfall
• Main contributor of biomass – palm oil industry
- Empty fruit bunches (EFB)
- Palm oil mill effluent (POME)
- Mesocarp fiber
- Palm kernel shells
- Palm kernel cake (residue)
• Mainly ligno-cellulosic materials
2.2.2 Palm Oil Biomass
Out of palm oil processing yield, only 10% are finished products i.e. palm oil and palm kernel oil, and the remaining 90% are harvestable biomass waste in the form of empty fruit bunches (EFB), palm kernel shell (PKS), palm oil mill effluent (POME), and palm kernel cake (PKC). (http://www.besustainablemagazine.com/cms2/malaysias-biomass-potential/)
• Biomass production (2003)
- Empty fruit bunch (EFB) – 14 million tonnes
- Palm kernel shell - 8 million tonnes
- Mesocarp fiber – 5 million tonnes
• Abundant and concentrated in the mills (business as usual)
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| Palm oil biomass |
2.2.3 Municipal Solid Waste Biomass
• Malaysia generates in excess of 15,000 tons of solid waste per day
• The life span of landfills : 5 – 10 years ONLY
• 80% of the 230 landfills will be closed in TWO years
• Non biodegradable plastics is widely used in supermarkets and grocery stores
• Malaysian government recognizes the importance of preserving the environment by promoting recycling program (Reduce, Reuse, Recycle)
• Energy (methane) for power/electricity generation
- 1st IPP Ayer Hitam Landfill 2 MW
• Chemicals
- Organic acids production – lactic, acetic, propionic and butyric acids
- Bioplastics – PHA or polylactate
• Fertilizer – Bio-compost
• Malaysia generates in excess of 15,000 tons of solid waste per day
• The life span of landfills : 5 – 10 years ONLY
• 80% of the 230 landfills will be closed in TWO years
• Non biodegradable plastics is widely used in supermarkets and grocery stores
• Malaysian government recognizes the importance of preserving the environment by promoting recycling program (Reduce, Reuse, Recycle)
• Energy (methane) for power/electricity generation
- 1st IPP Ayer Hitam Landfill 2 MW
• Chemicals
- Organic acids production – lactic, acetic, propionic and butyric acids
- Bioplastics – PHA or polylactate
• Fertilizer – Bio-compost
Share of Municipal Solid Wastes, Malaysia, 2005
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| Source : BIOMASS UTILIZATION IN MALAYSIA : CURRENT STATUS OF CONVERSION OF BIOMASS INTO BIOPRODUCTS Mohamed Ali Hassan & Shahrakbah Yacob, UPM, 2005 |
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| Municipal solid waste in an open dump site : a potential source of renewable energy |
2.3.1 The Biomass Policies and Initiatives
Several policies and initiatives are being implemented to promote the sustainable utilization of the Malaysian biomass potentials.
Several policies and initiatives are being implemented to promote the sustainable utilization of the Malaysian biomass potentials.
• National Biomass Strategy
In November 2011 the Malaysian Innovation Agency after extensive collaboration between the Malaysian Government and private sector companies as well as domestic and international research institutes and academia, published the National Biomass Strategy which focuses on oil palm biomass as a starting point and may later be extended to include biomass from other sources. According to the National strategy, from a supply-side perspective, by 2020 Malaysia’s palm oil industry is expected to generate about 100 million dry tonnes of solid biomass. This includes not only the empty fruit bunches (EFB), mesocarp fibres (MF) and palm kernel shells (PKS), but also the oil palm fronds and trunks. Excluded from this figure is palm oil mill effluent (POME).
In November 2011 the Malaysian Innovation Agency after extensive collaboration between the Malaysian Government and private sector companies as well as domestic and international research institutes and academia, published the National Biomass Strategy which focuses on oil palm biomass as a starting point and may later be extended to include biomass from other sources. According to the National strategy, from a supply-side perspective, by 2020 Malaysia’s palm oil industry is expected to generate about 100 million dry tonnes of solid biomass. This includes not only the empty fruit bunches (EFB), mesocarp fibres (MF) and palm kernel shells (PKS), but also the oil palm fronds and trunks. Excluded from this figure is palm oil mill effluent (POME).
• The National Biomass Strategy 2020 :
New Wealth Creation for Malaysia’s Biomass Strategy v.2.0 2013
The National Biomass Strategy 2020 lays the foundations for Malaysia to capitalise on its biomass by channelling it into higher value downstream uses. While the strategy initially focused on the palm oil industry since it was the largest producer of biomass in Malaysia, the scope is extended to include all types of biomass from sources such as rubber, wood and rice husk. Its aim was to assess how Malaysia can develop new industries and high-value opportunities by utilising agricultural biomass for high value products, starting with oil palm biomass. An explicit goal of the study was to determine how Malaysia can develop new biomass sectors with the aim of creating higher value-added economic activities that contribute towards Malaysia’s gross national income (GNI) and creating high value jobs for the benefit of Malaysians. It goes on to identify opportunities by which Malaysia can achieve significant additional contribution to GNI, and increased wealth and job creation from its biomass. It provides a 2020 biomass-to-wealth scenario, which will drive the development of national clusters in the pellets, bioethanol and biobased chemicals industries as well as fulfil the national renewable energy target for converting biomass to energy while ensuring sufficient nutrients are left for soil replenishment.
The National Biomass Strategy 2020 lays the foundations for Malaysia to capitalise on its biomass by channelling it into higher value downstream uses. While the strategy initially focused on the palm oil industry since it was the largest producer of biomass in Malaysia, the scope is extended to include all types of biomass from sources such as rubber, wood and rice husk. Its aim was to assess how Malaysia can develop new industries and high-value opportunities by utilising agricultural biomass for high value products, starting with oil palm biomass. An explicit goal of the study was to determine how Malaysia can develop new biomass sectors with the aim of creating higher value-added economic activities that contribute towards Malaysia’s gross national income (GNI) and creating high value jobs for the benefit of Malaysians. It goes on to identify opportunities by which Malaysia can achieve significant additional contribution to GNI, and increased wealth and job creation from its biomass. It provides a 2020 biomass-to-wealth scenario, which will drive the development of national clusters in the pellets, bioethanol and biobased chemicals industries as well as fulfil the national renewable energy target for converting biomass to energy while ensuring sufficient nutrients are left for soil replenishment.
This strategy would see the creation of new high value industries and 70,000 jobs of which 40,000 would be high-skilled.
• The EU-Malaysia Biomass Sustainable Production Initiative (Biomass-SP)
The EU-Malaysia Biomass Sustainable Production Initiative (Biomass-SP) is a development cooperation project funded by the European Union (EU) under the SWITCH-Asia Programme, and jointly promoted by the Malaysian Industry-Government Group for High Technology (MIGHT), the Association for Environmental Consultants and Companies of Malaysia (AECCOM), the European Biomass Industry Association (EUBIA), and the Danish Technological Institute (DTI).
BIOMASS-SP brings together small and medium enterprises (SMEs) involved in biomass supply chain, government agencies, research institutions and universities (RIUs) and financial institutions that are involved in promoting biomass industry, as well as environmental business intermediaries in an enabling and knowledge-intensive project BIOMASS-SP aimed to develop the biomass industry in Malaysia based on the principles of sustainable consumption and production (SCP).
The Ministry of Science, Technology and Innovation (MOSTI) through Commercialization and Business Incubation Centre, Sirim has prepared a roadmap of Strategic Landscape for major biomass sectors namely Palm Biomass, Agro/Forestry Residues, Municipal Solid Wastes, Biogas, Jathropa and Marine Algae, through the year 2020.
• The Bioeconomy Technology Roadmap
This initiative was rolled out by The Ministry of Science, Technology and Innovation (MOSTI) along with BiotechCorp and related agencies with 7 focus areas Extracts, BioFeeds, BioControl, BioFertilisers, Genomics, BioSimilars and BioIndustrials. This roadmap is drawn out to complement the national Biotechnology Policy.
• Malaysian Biomass Initiative (MBI)
Malaysian Biomass Initiative was established by the Global Science and Innovation Advisory Council (GSIAC), chaired by the Malaysian Prime Minister, and with the support of the Malaysia Industry – Government Group for HighTechnology (MIGHT) and the New York Academy of Science (NYAS).
MBI is based on a public – private partnership model and operated by an entity where sub-entities of the MBI (such as Special Purpose Vehicle for Aggregation, Consortia etc.) will play the crucial role of long term sole purchaser and supplier of palm waste biomass.Other MBI responsibilities include ensuring the reliable supply of biomass (from feedstock to off-takers), coordinating optimization for quality and cost efficient processes, and integrating global technologies to provide for fractioned biomass components.
The MBI also has capacity – building elements whereby the GSIAC platform may serve to provide input to the related Centres of Excellence in Malaysia, especially where relevant technologies in the MBI are concerned.
2.3.2 The Biomass Trends
- Migration from biofuels to biochemicals in view of huge market potential. Biobased chemicals market share in the global chemicals market are expected to increase from 9-13% in 2010 to 22-28% in 2025 (USDA; USA Biobased Products Market Potential & Projections through 2025). Locally, Malaysia’s biochemicals share in Malaysia’s chemicals sales target is projected to increase from 5% in 2010 and 20% in 2020 (McKinsey & Co, 2011).
- Backward integration by companies to secure renewable feedstock and forward integration with chemical companies for marketing.
- Opportunity for significant economic value from oil palm by utilizing waste generated at plantation and mill level for production of higher-value bio-based chemicals (Biotechnology Corporation Sdn. Bhd., 2011).
- Green Chemistry trend such as minimizing waste in chemical production processes, going for less toxic alternatives in place of existing products, and the shift to renewable fossil-fuel-replacement feedstock (Pike Research, 2011).
- The current size of the green chemical industry is about USD 2.8 billion globally. In 2020, it will likely grow to about USD 100 billion (Pike Research, 2011)
2.4 The Biomass Potentials and Prospects
Biomass has a significant role to play in solving energy needs. Biomass is capable of replacing fossil fuels in order to provide energy (electrical power and heat) in those areas where it is abundantly available. Other benefits such as commercial, social and environmental will then ensue. However, before any biomass project can be implemented albeit on smaller scale, the commercial viability of the project must be examined. The cost effectiveness and continuous availability of the resources must be weighted meticulously in order to maintain and sustain an economic return and to ensure the achievement of its environmental, social and technological objectives. The overall cost factors have to be fully analyzed in order for biomass to be widely accepted. That will include the comparison of biomass usage to other established fossil fuels, investments on related facilities and the existing support infrastructure available. Incorporating bioenergy into a holistic framework which assesses the total cost including the environment shows that biomass can be a competitive energy source (Shell, 1999).
Biomass has a significant role to play in solving energy needs. Biomass is capable of replacing fossil fuels in order to provide energy (electrical power and heat) in those areas where it is abundantly available. Other benefits such as commercial, social and environmental will then ensue. However, before any biomass project can be implemented albeit on smaller scale, the commercial viability of the project must be examined. The cost effectiveness and continuous availability of the resources must be weighted meticulously in order to maintain and sustain an economic return and to ensure the achievement of its environmental, social and technological objectives. The overall cost factors have to be fully analyzed in order for biomass to be widely accepted. That will include the comparison of biomass usage to other established fossil fuels, investments on related facilities and the existing support infrastructure available. Incorporating bioenergy into a holistic framework which assesses the total cost including the environment shows that biomass can be a competitive energy source (Shell, 1999).
Malaysia Biomass Resources Potential, 2005
 |
| Note: Waste from rice mills is mainly rice husks; palm oil mill waste includes empty fruit bunches; wood waste comprises chips, shavings and sawdust. Palm trunk and fronds, and logging waste left in the cutover forest areas are not included. The potential annual electricity production and power generation capacity were computed on the assumption that all the available biomass resources listed were fully utilized. Source: PTM, Comprehensive Biomass Study, 2005. |
Biomass suppplies over 13% of the world's energy demand. Traditionally of course, wood has been used to provide heat for thousands of years, and is derived both from direct use of harvested wood as a fuel and from wood waste streams. Wood is still by far the major biofuel and it is primarily used to produce heat for space heating and cooking in the developing world. This traditional use of biomass is expected to grow with increasing world population. However, there is significant scope to improve its efficiency and environmental performance and thereby help reduce biomass consumption and related impacts.
2.4.1 Abundant Resources
Malaysia produces at least 168 million tonnes of biomass, including timber and oil palm waste, rice husks, coconut trunk fibres, municipal waste and sugarcane waste annually. Being a major agricultural commodity producer in the region, Malaysia is well-positioned amongst the ASEAN countries to promote the use of biomass as a renewable energy source.
Biomass Resource “Industrial In-Situ” Potential, 1999
 |
| *Original source : MPOB, SIRIM, FRIM, Forestry Departmentand Ministry of Agriculture, 1999 Source : Mazlina Hashim, “APECATC – Workshop on Biomass Utilization”, 19 – 21 January 2005 in Tokyo and Tsukuba, Japan |
2.4.2 The Significance of Oil Palm Industry
The majority of the oil palm biomass is left on the fields ( i.e. palm fronds) or returned to the fields as organic fertilizer (i.e. empty fruit bunches). This biomass plays an important role to ensure the sustainability of plantations and preserve soil fertility. However there is also the potential to utilise a share of this biomass for a variety of additional end uses, including, pellets, bioenergy, biofuels and biobased chemicals, without depleting the soil.
As the world’s largest exporter of palm oil, Malaysia generates a lot of biomass, which holds tremendous potential for high value added applications ranging from biofuels to bioplastics from cellulosic feed stock. With an estimated value of US$11.14 billion in 2015, biomass is targeted to be a vital contributor to the agricultural and industrial biotechnology sectors. The strategy is developed by Agensi Inovasi Malaysia (AIM) in close collaboration with related government agencies, universities and business leaders.
Oil Palm Biomass
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Source : BioEnergy Consult, 2013
|
• Oil Palm Biomass in Wood Industry
In a business as usual scenario, by 2020, Malaysia’s palm oil industry will utilise 12 million tonnes of biomass p.a. for use in wood products and bioenergy. Currently, oil palm biomass makes up a small percentage of the input to the wood industry. This is expected to grow steadily to about 1 million tonnes p.a. by 2015. With industry growth and a higher share of oil palm biomass as input instead of rubber wood, the volume is expected to reach almost 3 million tonnes of biomass p.a. by 2020.
In a business as usual scenario, by 2020, Malaysia’s palm oil industry will utilise 12 million tonnes of biomass p.a. for use in wood products and bioenergy. Currently, oil palm biomass makes up a small percentage of the input to the wood industry. This is expected to grow steadily to about 1 million tonnes p.a. by 2015. With industry growth and a higher share of oil palm biomass as input instead of rubber wood, the volume is expected to reach almost 3 million tonnes of biomass p.a. by 2020.
The use of oil palm biomass in the wood and bioenergy industries could, by 2020, contribute RM 2.8 billion and RM 2.4 billion to GNI, respectively. The growth of bioenergy alone will create about 1,400 direct and 3,900 indirect jobs and require an additional private investment of RM 8–10 billion.
In 2015, more than 3.5 million tonnes of biomass and, in 2020, close to 9 million tonnes of biomass will be used to produce energy so that the country can meet its renewable energy target.
Converting the POME into biogas for either powering the mills or selling power into the national grid would potentially allow for an increase of power capacity of 410 MW by 2030. This initiative alone would reduce the nation’s carbon dioxide (CO2) emissions by 12 percent and free up significant biomass for higher value-added uses.
Oil Palm Residues Potential Power Generation (MW)
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| Source : Biomass Resource Inventory Report, BioGen Project PTM |
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| Source : Biomass Resource Inventory Report, BioGen Project PTM |
The 2MW Sungai Dingin Palm Oil Mill is a Full Scale Demonstration Project (FSDP) under EC-ASEAN cogeneration programme which uses palm kernel shell and fibre to generate steam and electricity. Meanwhile, the 14MW TSH Bioenergy Sdn Bhd in Tawau, Sabah, is the biggest biomass power plant in Malaysia and uses empty fruit bunches (EFB), palm oil fibre and palm kernel shell as its resources.
• Increased Soil Fertility
The increased nutrient recycling will increase soil fertility and increase sustainability of palm oil production. Systems that minimise the removal of nutrients and carbon from the system should be preferred. Still not all carbon and nutrients have to be re-cycled. What the optimum is between biomass utilisation and recycling varies according to soil and climate.
• Increased External Demand for By-Products
The primary benefits of external demand for by-products is the solving of problems concerning polluting byproducts and increasing the profitability of the production by:
- balanced recycling nutrients and carbon at the field
- increasing the efficiency of boiler fuel utilisation at the mill
- supplies of surplus energy to local electricity net
- novel economic activity and generation of local employment by conversion of biomass residues in value added products.
2.4.3 Power Generation from Paddy Husks
Rice / paddy husks is another important biomass resource in Malaysia, with good potential for power cogeneration, e.g. in Perlis, which uses paddy husks as the main source of fuel and generates 10MW power to accommodate for the requirements of 30,000 households.
Rice / paddy husks is another important biomass resource in Malaysia, with good potential for power cogeneration, e.g. in Perlis, which uses paddy husks as the main source of fuel and generates 10MW power to accommodate for the requirements of 30,000 households.
A USD15 million project has been undertaken by Bio-Renewable Power Sdn Bhd in collaboration with Perlis State government, while technology provider is Finland’s Foster Wheeler Energia Oy. Another husk-based power generation is a EC-ASEAN cogeneration project in Titi Serong, Parit Buntar, Perak with a 1.5MW power generation.
Paddy Residues Potential Power Generation (MW)
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| Source : Biomass Resource Inventory Report, BioGen Project PTM |
Residue Product Ratio and Potential
Power Generation from Paddy Residues
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| Source : Biomass Resource Inventory Report, BioGen Project PTM |
2.4.4 Power Generation from Wood Residues
Wood energy accounts for 9% of total energy consumption in Malaysia. Statistics show that most biomass energy is consumed by industries, but data on woodfuel use by households are not available. In the domestic sector biomass energy is mainly used for cooking.
Wood energy accounts for 9% of total energy consumption in Malaysia. Statistics show that most biomass energy is consumed by industries, but data on woodfuel use by households are not available. In the domestic sector biomass energy is mainly used for cooking.
Wood Residues Potential Power Generation (MW)
 | |||
| Annual Operating hr = 6100 1PJ = 10E15 = 277777.8MWh = 46 MW Electrical conversion efficiency is 21% Source : Biomass Resource Inventory Report, BioGen Project PTM |
2.4.5 Power Generation from Municipal Solid Wastes (MSW)
The per capita generation of solid waste in Malaysia varies from 0.45 to 0.44kg/day depending on the economic status of an area. Malaysian solid wastes contain very high organic waste and consequently high moisture content and bulk density of above 200kg/m. The high rate of population growth is the country has resulted in rapid increase in solid waste generation which is usually dumped in landfills.
The per capita generation of solid waste in Malaysia varies from 0.45 to 0.44kg/day depending on the economic status of an area. Malaysian solid wastes contain very high organic waste and consequently high moisture content and bulk density of above 200kg/m. The high rate of population growth is the country has resulted in rapid increase in solid waste generation which is usually dumped in landfills.
Solid Waste Generation :
A Comparison Between 2005 and 2012
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| Source : Ministry of Urban Wellbeing, Housing and Local Government, 2013 |
Share of Solid Waste Composition
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| Source : Biomass Resource Inventory Report, BioGen Project PTM |
Share of Domestic Solid Waste Composition
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| Source : Ministry of Urban Wellbeing, Housing and Local Government, 2013 |
Projected MSW Generation by 2020
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| Source : Biomass Resource Inventory Report, BioGen Project PTM |
 | ||
Kajang Waste-to-Energy (W2E) Plant in Semenyih, Selangor :
MSW is converted into refuse derivedfuel for use in an integrated steam power plant.
2.5 Additional Value Creation : Biomass to Wealth
To fully capitalise on the biomass opportunity, an additional 20 million tonnes of biomass compared to a business as usual scenario could be deployed towards higher value downstream activities such as pellets, bioethanol and biobased chemicals.
2.5.1 Pellets
Pellets is a natural entry point for capturing this opportunity since the technology is reasonably mature, the cost of developing infrastructure relatively low (i.e., RM 30–40 million per plant with a capacity of 100,000 tonnes) and the payback of 5-7 years relatively quick. Converting biomass to pellets will allow biomass owners in Malaysia to immediately capitalise on available biomass. Pellets produced in Malaysia can be shipped to other Asian countries such as Japan and Korea where there is already an existing market demand for biomass. Globally, the demand for biomass pellets is forecasted to reach ~20 million tonnes by 2020. Korean and Japanese policies have already created an increased demand for bio-based pellets in the region. In Korea, the first dedicated biomass power plant is scheduled to go online in 2013 in Dong Hae. By 2020, Korean demand for wood and biomass pellets is forecasted to reach 5 million tonnes. Meanwhile competition continues to increase. Malaysia, therefore, needs to accelerate speed to market, possibly also creating local demand to expedite the development of the industry. While Malaysia does have a distinct advantage in terms of proximity to the markets in Asia, to capitalise on the advantage, it must deliver in an efficient, proactive and timely manner.
A series of incentives has already been put in place to catalyse the industry (e.g., tax breaks, business opportunity under the oil palm NKEA that will provide 10-15 percent of capex for the first five new pellet plant applications). Mobilising 10 million tonnes of biomass for pellets by 2020 could create about RM 9–10 billion in GNI and about 5,500 and 6,800 direct and indirect jobs, respectively. In addition to the contribution to GNI and the creation of new jobs, pelletisation allows industry to mobilise its biomass and, in so doing, the logistics and infrastructure associated with mobilising the biomass can be established. This will be relevant for the development of the bioethanol and biobased chemicals industry.
2.5.2 Bioethanol
There is increasing evidence that the 2nd generation bioethanol market will be mature by 2015. Commercial plants (e.g., Beta Renewables in Crescentino in northwestern Italy and Shengquan Group in Shandong province in China) have already been established and over 700 million litres of 2nd generation bioethanol is likely to be commercially produced by 2015.
The US has separate targets for 2nd generation bioethanol, and there is a possibility that the EU could establish a similar policy. However, demand coming from these markets is highly dependent on regulation.
Incentives for the production of bioethanol, such as the inclusion of biobased chemicals to provide capex incentives of up to 40 percent and tax breaks have been put in place to catalyse the development of the industry.
2.5.3 Biobased Chemicals Biobased chemicals represent the largest potential for Malaysia. Currently, the global market for all chemicals amounts to more than RM 7 trillion. Of this, lignocellulosic biomass can supply about 0.6 percent, equivalent to a global market size of RM 48 billion, which is expected to grow to as much as RM 110–175 billion by 2020. Producing 1.6 million tonnes of biobased chemicals would require 10–20 biobased chemical plants and a total investment of RM 10–15 billion by the private sector as well as the mobilisation of about 5.5 million tonnes of biomass. Seizing the biobased chemicals opportunity could lead to an increase in GNI of RM 14–15 billion and the creation of 2,500 and 13,400 direct and indirect jobs, respectively. As the advancement of biobased chemicals continues, several promising biobased chemicals are starting to emerge. The most successful ones combine competitiveness (time to market; technical feasibility; relative cost position to fossilbased products) with demand. Ethylene Glycol and Succinic acid belong to the group of chemicals that appear to be the most promising. In its effort to strive towards complete success, Malaysia is working to ensure that further downstream processing and manufacturing of chemicals is captured within the country by encouraging the building of plants within chemical clusters. 
Source : News clipping of Berita Harian 7/5/2012
National Biomass Strategy 2020 : Delivering Incremental GNI
of Approximately RM30 bn 
Summary
In total, the additional value creation from pellets, bioethanol and biobased chemicals represents a possible GNI increase of RM 30–34 billion by 2020 and the creation of 66,000 jobs. For this opportunity to be realised, an additional 20 million tonnes of biomass must be mobilised beyond those required in a business as usual scenario, which includes the wood industry and bioenergy. The realisation of this opportunity for Malaysia will also require active private sector participation and investments amounting to RM20–26 billion.
3.0 ISSUES, CHALLENGES, AND OUTLOOK OF RENEWABLE ENERGY
AS AN ALTERNATIVE ENERGY
3.1 Issues
3.2 Constraints
Economic Constraints (i) Controlled and low electricity tariffs (ii) Competing incentives (iii) Least cost option
Financial Constraints
(i) Private capital and the availability of funds
Technological Constraints
(i) Interconnection (ii) RE technology
The existing constraints mean any measures designed to implement the policy should address these constraints in a meaningful way without distorting the market (e.g. by providing subsidies). The opportunity is available for the proper management of these constraints in an effective and efficient manner which enables the policy to be sustainable over the long term.
3.1.3 Arbitrary RE Price Setting
3.1.4 Business Tensions and Trade-offs
The demand on the utility (as the market for retail and distribution has not been liberalised) to fund RE by paying higher prices to RE power producers is the opposite of the demand on the same utility to improve its financial performance and the return on its assets. The current scenario would create a dilemma amongst consumers due to these factors:
The expectation of a high price for RE especially for biomass and biogas by the RE power producers;
3.1.5 Cost Bearing
Placing the RE costs solely on the utility’s shoulder (as is the case to date) creates tremendous tensions for the utility especially as it has to meet its key performance indicators set under the GLC Transformation programme, its public company status and treated as part of the government. The result is that the utility will find ways to minimise their cost exposure.
Alternatively if the RE producers bear the costs they have no incentive to enter the market. If the cost burden is placed on the Government, it means an opportunity costs and competition amongst other programmes for funding. However it must be recognised the Government revenue is not unlimited and must be used efficiently and effectively.
Therefore placing the RE cost burden on all levels of consumers whether they are households or businesses is an effective and efficient mechanism because:
3.1.6 Lack of an Efficient Regulatory Framework
It is observed that current regulatory framework is inadequate to address the myriad issues pertaining to RE as a fifth fuel in electricity generation. For example under Section 26 of the Electricity Supply Act (ESA), the power to fix tariffs is in the handsoff licensees with the proviso such tariffs are to be approved by the Minister before being applied. The ESA also requires“installations” to have proper safety supervision undertaken by the resident engineer as prescribed in the Electricity Regulations. It is silent on the provision making available the rights of a power producer to require or demand interconnection of its power plant to the grid, nor is there any provision to deal with the risk of the grid operator behaving anti-competitively (since the grid is a natural monopoly and needs to be regulated as such).
Without a robust, effective and efficient regulatory framework that provides clear rules (and minimises discretionary powers) the default mechanism is to rely on regulatory negotiations, i.e. negotiations to achieve an outcome which is similar had the outcome been specified in regulations. This consumes time and effort of all parties and may not necessarily produce the desired results. The absence of a proper regulatory framework, inhibits effective legal action from being taken. The lack of mandatory requirement to enable access and interconnection means, any interconnection needs to be done voluntarily by the grid operator, through the use of contracts. These contracts could supplement the deficiency in the current regulatory framework, but their ability is dependent on the possibility of regulatory intervention to avoid abuse of market power. Further network access prices are not applicable in Malaysia since the transmission and distribution charges in the form of network access prices or use of system charges are not levied by the utility. The only form of such charges is the expenses that TNB as a licensee incurs in providing a supply line to a person requiring the supply of electricity, which is not a “network access price”. Institutions are of two types – formal or informal. Formal institutions are set up within the ambit of legislation or regulations while informal institutions exist within the ambit of administrative actions which may be sanctioned, recognised or supported by the state. It is now recognised institutional systems may be one of the causes of sustainability problems and barriers to addressing policy problems. Systems which are not transparent or fully accountable are precisely those that are resilient, powerful and resistant to change. 3.1.9 Limited Oversight The lack of an oversight body to ensure the policy targets are met or at least to hold the implementing agency accountable reduces the effectiveness of the governance framework resulting in the limited success of RE development in the country. 3.1.10 Lack of Institutional Measures (a) Access to information; (b) Structure of information
3.2 Challenges
3.2.1 There is uncertainty in respect of the technological development to convert the renewable energy resources into usable forms. Although several research and studies have indicated the technical feasibility of generating energy from renewable resources, the commercialisation of research findings has not been fully undertaken on a large scale. 3.2.2 Generation of energy from renewable resources is economically unattractive due to availability of cheaper alternative of energy, high cost of energy generation and inability to supply to the national grid. Current prevailing lower prices of fossil fuel, particularly crude oil prices due to oversupply in the international market, as compared to that of renewable energy inhibit efforts to develop and promote the utilisation of renewable energy. Meanwhile, the relatively high costs of energy generation from renewable resources, both in terms of investment costs and final energy costs, compared to conventional energy further restrain the efforts to promote the utilisation of renewable energy. In this regard, the electricity costs from biomass, geothermal and solar sources are within the range of US 7-25 cents/kWh, compared to conventional electricity costs of US 4-6 cents/kWh. In the case of stand-alone photovoltaic (pv) system used in the rural electrification programme in Sabah and Sarawak, its cost of installation and maintenance is higher than the diesel gen sets. Furthermore, the inability of biomass energy generators to supply the energy generated to the national grid under the existing arrangement also contributed to the problem.
Renewable Energy (Investment Costs and Electricity Costs)
Source: Hansen, U. (1998) "Technological Options for Power",
The Energy Journal, Vol. 19, No.2, pp. 63-87.
3.2.3 There is a lack of reliable information on the potential supply of renewable energy at the national level. For instance, the availability of biomass is not easy to be computed, as the amount of waste materials, such as wood residues, palm oil waste and agricultural waste, is seldom captured by the waste generating entities as well as by the relevant government agencies.
3.2.4 There seems to be little public demand for energy from renewable resources. This is due to weak public awareness on the positive attributes of renewable energy. Furthermore, the relatively high cost of renewable energy compared to conventional energy may discourage the public in utilising renewable energy. These are practical issues that need to be addressed in detail in order to convince the public on the technical and commercial viability of renewable energy. 3.2.5 The existing tariffs act as a constraint on the part of the utility to agree to a higher energy purchase price due to the reason that no business will purchase an input to be sold at a lower price; 3.2.6 Competing incentives exist in the market that make it on a net benefit test, more favourable for businesses to utilize these competing incentives than participating in RE power generation; 3.2.7 Preference for the least-cost fuel option by policy makers. 3.2.8 Major problems in tapping biomass resources : • Technological shortcomings in realization of fermentable products from biomass • Complex and sensitive system (biological agents) • Production of several products in a single process • Complexity in downstream processing • Socio-economics • Not competitive compared to fossil fuels • Accountability in pollution and global warming • Sustainability of process and technology
3.3 Outlook
3.3.1 Increased utilisation of renewable energy resources is strategically important in the long term as it will contribute to the sustainability of energy supply. The renewable nature of biomass, solar, wind and municipal waste will ensure that these resources are available in perpetuity. Renewable energy resources are reliable in the long term provided efforts are undertaken to convert those energy into usable forms.
3.3.2 Concerns that emerged due to the emission of carbon dioxide, nitrogen dioxide, sulphur dioxide and particulates as a result of energy generation from crude oil and petroleum, natural gas and coal. Thus, the increase in the utilisation of renewable energy will minimise the negative impacts of energy generation, transmission, conversion and consumption on the environment.
3.3.3 increased utilisation of renewable energy, such as biomass and municipal waste, also acts as a means of pollution control. In this respect, industrial waste, like wood residues, palm oil waste and agricultural waste, could be converted into usable forms of energy, such as for heat generation.
3.3.4 Malaysia has great potential in biomass utilization as renewable resources : • Significant reduction in GHG emission : – to achieve sustainable development via quantification of emission limitation and reduction of GHG under Kyoto Protocol – Clean Development Mechanism (CDM) projects generate – Certified Emission Reduction (CER) for sale or export – The CER can be used towards developed nations commitments to mitigate their GHG emissions • Biomass utilization promises sustainable development of both the industry and environment
3.4 RE Targets and Success Indicators
As the RE Policy is a new and forward-looking policy, it is important and necessary that evaluation be done periodically, to empirically ascertain whether these actions are bearing fruit or require change mid-stream, and by which the outcomes of the Policy Objectives be monitored and realised. Accordingly evaluation criteria have been drawn up for each Thrust, and planned base line assessments are to be undertaken to provide the basis for future evaluation. 4.0 RENEWABLE ENERGY : THE WAY FORWARD
Source: Green Prospect Asia (August 2012)
The market, the know how, the experience, the opportunities are there; The existing projects are boosters for innovation, training, service, growth; The government, industry, education should focus on speed, innovation and enterpreneurship.
NIMBY - Not In My Back Yard
NIMBA - Not In My Bank Account NIMTO - Not In My Term of Office BANANAs - Build Absolutely Nothing Anywhere Near Anything CAVE - Citizens Against Virtually Everything
5.0 CONCLUSION
The development and future direction of the Malaysian energy sector will depend on the requirements of the economy in terms of reliability and security of energy supply. In line with the objective of diversifying the sources of energy, renewable energy has been identified as an alternative source of energy which could be promoted. However, there are a number of challenges that inhibit the development of renewable energy. In this regard, formulation of sustainable energy policy and strategies in addressing these challenges is indeed a prerequisite for the concerted development and promotion of renewable energy. |
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