Changing up the energy mix


KUCHING: Energy consumption, as far as most reports have predicted, will grow rapidly over the next two decades with many countries projected to continue investing heavily in renewables.

According to the International Energy Outlook 2017, produced by the US Energy Information Administration (EIA), between 2015 and 2040, world energy consumption will increase by 28 per cent, with more than half of the increase attributed to non-Organisation for Economic Co-operation (OECD) Asia (including China and India), where strong economic growth drives increasing demand for energy.

Although renewable energy and nuclear power are the world’s fastest growing forms of energy, the report said fossil fuels are expected to continue to meet much of world’s energy demand.

“Petroleum and other liquids remains the largest source of energy, but its share of world marketed energy declines from 33 per cent in 2015 to 31 per cent in 2040.

“On a worldwide basis, liquids consumption increases in the industrial and transportation sectors, and declines in the electric power sector,” it projected.

The report also highlighted that natural gas is the world’s fastest growing fossil fuel, increasing by 1.4 per cent per year, compared with liquid’s 0.7 per cent per year growth and virtually no growth in coal use (0.1 per cent per year).

As for coal, EIA noted that compared with the strong growth in coal use in the early 2000s, worldwide coal use is projected to remain flat-with declines in OECD regions and China offsetting growth in India and the other non-OECD Asian nations.

“Coal is increasingly replaced by natural gas, renewables, and nuclear power (in the case of China) in electricity generation. Industrial demand for coal also weakens.”

Meanwhile, EIA pointed out that renewables, including hydropower, are the fastest-growing sources of electricity generation over the period of 2015 to 2040.

It will rise by an average of 2.8 per cent per year, as technological improvements and government incentives in many countries support their increased use.

“In 2040, renewables provide the same share of world electricity generation as coal at 31 per cent.”

In his keynote address at International Energy Week (IEW) 2018, Chief Minister Datuk Patinggi Abang Johari Tun Openg stressed on the fact that “tremendous demand for energy gives impetus to the search for greener sources of energy.”

For Sarawak, the aim is to make renewable energy make up 50 per cent of its energy consumption by 2050.

“The key word is now green energy,” Abang Johari reiterated.

“Sarawak is looking at hydrogen-fuel cells and the hydrogen economy, mostly because of our abundant water resources from hydropower. Hydrogen energy is now seen to have the greatest potential in transportation. There is good scope for the development of green energy in Sarawak because our population is small enough to have complete coverage.

“We aim to achieve a remarkable feat of having renewable energy make up 50 per cent of energy consumption by 2050.”


Renewable targets in the region

The Chief Minister’s vision runs parallel with most countries in Southeast Asia who have set renewable energy targets and adopted some form of national renewable energy policy to meet them.

According to the International Renewable Energy Agency (IRENA) in its latest Renewable Energy Market Analysis for Southeast Asia, Malaysia, along with Indonesia, the Philippines, Thailand and Vietnam are comparatively more advanced in the region in terms of policy maturity and comprehensiveness.

“In the power sector, policies that have catalysed deployment have focused on dedicated financing schemes to support projects; permitting and licensing mechanisms and technical standards to facilitate grid interconnection; and guaranteed purchase of renewable power at attractive tariffs,” it said.

“Most countries have introduced technology-specific feed-in tariffs (FiT), often combined with other deployment policies such as net metering, like Malaysia did for roof-top solar power generation.With the falling cost of technologies, especially for solar PV and onshore wind, and increasing maturity of the sector as a whole, policies that support the deployment and integration of renewables are evolving.”

The Sustainable Energy Development Authority Malaysia’s (SEDA) itself believes strongly in the future of sustainable energy, especially with Malaysia being a country well-endowed with renewable resources such as hydro, solar and bioenergy.

According to SEDA chairman Datuk Dr Yee Moh Chai in the Annual Report for 2016, in the area of energy efficiency and conservation, the Authority has been actively promoting energy demand management, having been tasked to implement such programmes under the 11th Malaysia Plan and entrusted to look after the commercial sector for Energy Audit Conditional Grant.

Under the country’s Renewable Energy Act 2011, Malaysia has also taken steps to further clean energy deployment by mandating adoption of a renewable energy FiT mechanism and the Authority has been the implementing agency for the said mechanism.

Additionally, the Authority implemented the Net Energy Metering (NEM) scheme since November 1, 2016, a new programme deployed to complement the successful FiT mechanism.

Yee explained the concept of NEM is that the electricity produced from the solar PV system installed will be consumed in situ by building owners and any excess of the generated electricity will be exported and sold to the Distribution Licensees (such as Tenaga Nasional Bhd and Sabah Electricity Sdn Bhd) at the prevailing displaced cost as prescribed by the Energy Commission.

He noted that as NEM will help to reduce consumption of imported electricity from the utility, it is viewed as an energy efficient as well as an energy cost savings measure.

“The way forward for Malaysia to prepare the country for a total energy transition is to optimise and utilise all the RE resources available in the land,” he added.

“Thus, the Authority believes that this is the right time to formulate the energy transition roadmap that will propel Malaysia from the traditional dependence on fossil fuel to the new and innovative alternative of generating energy from clean and renewable energy.”

Meanwhile, Malaysia’s Energy, Green Technology and Water Ministry (KeTTHA) has targeted to produce 50 per cent of its energy through renewable energy source by 2050.

Energy, Green Technology and Water Minister Datuk Seri Panglima Dr Maximus Johnity Ongkili said last week at the launch of Sustainable Energy Convention 2018 that the generation of renewable energy in the country from hydro and other new sources was so far at 7,271.74 megawatts (MW) or 22 per cent.

Ongkili also said that the ministry emphasised the use of renewable energy to achieve the greenhouse gas emission reduction target which had been set by the country in the Paris Climate Change Agreement 2015.

“Cohesive efforts must be organised to reduce greenhouse gas emission in the energy sector in the country, which is the largest contributor and responsible for 76 per cent of total greenhouse gas emission through fossil fuel combustion.”

“Various efforts have been and are being undertaken by experts, policy makers and scholars to find the best way to achieve a balance between sustainable energy sources, the ability to absorb energy costs and the need to preserve the environment.”


Hydropower and other renewable potential in Sarawak

In Sarawak, Sarawak Energy group chief executive officer Sharbini Suhaili revealed that the state’s strong focus on hydropower development is based on the realisation that large hydropower offers the lowest levelised cost of energy (LCOE) among the different types of technologies available today.

He said this in his presentation entitled ‘Hydropower Development – Affordable, Renewable and Reliable Energy to Energise Transformation and Sustainable Opportunities’ during IEW 2018.

“This gives the state a sustainable, competitive advantage, allowing us to transfer savings to our domestic customers and attract energy-intensive industries, by offering very attractive watt-hour rates,” Sharbini said.

“A study on hyrdo potential in the 1980s and 1990s with the support of the German government, showed that Sarawak has the potential for over 20,000MW of hydro power in total.

“Of this, 14 sites have been identified as high potential, with a total capacity of about 8,000MW.

“Three of these hydropower sites have been developed and two are still ongoing, which is Baleh and Kota2 in Lawas.”

Sharbini highlighted that it is apparent that the best strategy for the state to develop its full economic potential plus utilise its abundant and renewable energy resource.

“The environmental impact is of course an important aspect that we need to consider in planning all our projects.”

Sarawak Energy’s projects are developed in accordance to the International Hydropower Association (IHA) Sustainability Assessment Protocol and the International Commission On Large Dams (ICOLD) guideline.

From the group’s studies, Sarawak Energy has observed that about two per cent of the total areas in Sarawak would be utilised if all of the identified hydropower projects are executed, including the ones in operation and the ones under development.

“Today, we have 4,700MW and that will increase to more than 7,000MW by 2025, when Baleh hydro power plant comes onstream.

“Currently, we have hydropower representing 73.5 per cent of our generation mix, and this is made possible because Sarawak is blessed with an abundance of rainfall, rivers and wide terrain.”

“We have three hydropower plants operating – Batang Ai, Bakun and Murum – with a combined capacity of close to 3,500MW.

“We are building on the experience from Batang Ai, Bakun and Murum projects to further improve our processes for the next hydropower devpt which is the 1,285MW Baleh project and which will be completed in 2025.”

On the tariff comparison chart between various countries and states, Sharbini pointed out that today, with the high percentage of hydro in the state’s generation mix, Sarawak has the lowest average tariff within Asean.

“In fact, we are about 40 per cent lower than Peninsular Malaysia and more than 100 per cent lower than Singapore.”

He added that while Sarawak Energy will maintain renewable energy as its dominant source but to ensure security of supply, the group will also incorporate thermal plants into its generation mix, harnessing Sarawak’s indigenous coal and gas resources.

Sarawak Energy is targeting 100 per cent of the state’s population to have access to 24-hour electricity supply by 2025.

State domestic coverage was at 95 per cent in 2017 while rural coverage was at 90 per cent.

There are about 1,600 villages and 36,000 households yet to be electrified.

“We are working on mini/micro hydro and solar generation systems for remote communities under Sarawak Alternative Rural Electrical Scheme (SARES) to ensure that before 2025, the whole of Sarawak will have access to 24-hours power supply.”

As of 2017, Sarawak Energy has about 9MW of solar power mainly in the rural areas.

Overall, Sharbini remarked that “Sarawak has experienced positive disruptions through hydropower development. This provides a platform for socio-economic transformation, acceleration of rural infra-structure development, renewable and affordable energy for Sarawakians, reduction of carbon intensity of electricity supply and uplifting the living standards of affected communities.”

Sarawak Energy is now spearheading initiatives under the state aspiration to build a digital economy in tandem with a green economy which includes hydrogen and fuel cell applications, particularly for transportation and power storage.

“As part of this initiative, we have recently embarked on an educational visit to China and Japan and we know that these two countries are putting in place the building blocks towards a hydrogen economy.

“In fact, in many parts of the world, there are many players looking at hydrogen and fuel cell research. In this regard, we aspire to be ahead of the curve and not be left behind.”


Solar power a prominent renewable source in energy mix

Solar power a prominent renewable source in energy mix The falling costs of renewable power generation, including that of solar, demonstrates that electricity from renewable energy will gradually be within the cost range of or even lower than that of fossil-based power.

In MH Technology Malaysia Sdn Bhd’s managing director Ir Roger Wong’s presentation on solar power development at the IEW 2018 Technology Symposium, he highlighted that as per an IRENA report, the global weighted average LCOE of utility-scale solar photovoltaic (PV) has fallen 73 per cent since 2010, to US$0.10 per kilowatt-hour (kWh) for new projects commissioned in 2017.

According to IRENA, record low auction prices for solar PV in Dubai, Mexico, Peru, Chile, Abu Dhabi and Saudi Arabia in 2016 and 2017 confirm that the LCOE can be reduced to US$0.03 per kWh from 2018 onward, given the right conditions.

“As you are probably aware of, in the Middle-East, you may be able to command a higher power generation output, given the fact that you have a better solar irradience coming from the sun.

“Nevertheless, due to the temperature, with the heating element, you can actually downgrade the performance of the module as well.

“It’s actually a give-and-take situation but in short, you should be able to get more power output with these areas,” he explained.

Wong went on to note that the forecasted cost for this type of power generation is likely to be halved again by 2020, from the current cost.

As per IRENA’s report outlook for solar and wind electricity costs to 2020 presages the lowest costs yet seen for these modular technologies, which can be deployed around the world.

Based on the latest auction and project-level cost data, IRENA pointed out that global average costs could decline to about US$0.06 per kWh in 2020 for solar PV.

On the reduction of LCOE per kwh for solar, Wong highlighted that three core components that can drive cost reduction.

“First and foremost, obviously is technology improvement. We are seeing alot of improvement coming from the technologies side, mainly driven by either the manufacturers itself or the university-led research teams.

“Secondly, with competitive procurement, in fact, there are certain areas or regions or even countries or states where we talk about having a more strategic procurement.

“Either you go by bulk purchasing or when you are having a large project going on at a single moment and as such, you can probably actually leverage on that kind of procurement to bring down the cost as well.”

As for developers in the industry as a cost reduction driver, Wong pointed out that as long as the developers are getting more hands-on, from there, they are getting more experienced in their field.

“Whether we are talking about civil work, the infrastructure work or electrical work, eventually, the developers will also play their roles in maximising their efficiencies.”

Wong went on to note that in the case of large-scale solar, Malaysia has yet to reach maturity in this industry. However, the country is getting the assistance needed from international bodies to further this industry.

With studies showing that Asia actually leading the pack in solar adoption up to two years ago, Wong pointed out that the region is the key area Malaysia is looking into.

“ In fact, US President Donald Trump recently imposed a solar tariff for all the imported solar panels made outside the US. This implication on a global basis, from my perspective, is actually a plus point for a short period of time, relating to large-scale solar,” he said.

“This is because with the US imposing the tariff of 30 per cent on all the imported solar panels going into the country, you might be seeing an abundance of panels being floated, globally.”

“With that said, probably in this one or two years, we should be able to get an even cheaper rate, hence we can lower down our solar development costs, as far as this current scenario is concerned.”

Moving forward, Wong believed that what will encourage Malaysia to move forward in the solar panel industry is to have some some intervention from the authorities or maybe from the government, even from the international technology partners.

“First and foremost, we need to highlight on favourable regulations and institutional support. As long as the policy is there, the needs is there, the government agenda and probably the needs of local supports, with the drive of the local community, maybe we can actually move forward in developing more solar developments.”

Low country risks also play a role, Wong pointed out, whereby especially for large-scale solar, the lower risk will obviously pull down costs and not incur any unnecessary costs in the industry.

Having a strong local engineeering base is also very important, he said, explaining that “as much as technology evolves, at the end of the day, when we talk about civil structures, the manpower to do the integration is also very important in determining the production or cost of your projects.”

“Going forward, in terms of applications, it’s limitless. Solar can be used in many areas. You can have a roof that acts as a panel and you can even have furniture that acts as panels. Utility runs the show as a large-scale job, while portable devices and also automotive (are other forms of applications). It’s all limitless.”


Visibility of renewable energy needs to be higher

With KeTTHA focusing on bringing in a lot of green products and technology into the country, Energy Action Partners’ regional director for Southeast Asia believes that while this is important, it is not enough.

“We need to be pushing more at all levels. We ourselves as the public need to actually make it known that we want renewable energy to increase in the country.

“The demand has to increase and then the supply will follow as well,” Ayu said during her ‘Exploring Malaysia’s Renewable Energy Potential’ presentation during the IEW 2018 Technology Symposium.

She went on to highlight that there are alot of challenges to implementing renewable energy in the country.

“The policy and regulatory environment has to change. We have to make it more friendly to renewables, to make it more competitive for the market and to level the playing field for renewable energy.”

“One of the main challenges is we have a lot of different industries and we are a bit fragmented in terms of how we power our industries and our commercial sector.

“We need to come up with a way to try and scale towards a circular economy where we’ll also feed back into the commercial industry sector.

“This is a huge effort but it’s entirely possible and basically right now, it’s time for us to actually start calling for more renewable energy.”

While SEDA has implemented FiT and NEM in the country, Ayu opined that more needs to be done in terms of actually informing the public that all these policies and opportunities are in place.

“One thing we can work on is actually getting SEDA to better promote these existing initiatives and efforts because they are there already and we should be taking advantage of them.”

As for the main technological challenges in implementing more renewable energy, if the country is to implement higher renewable energy shares, the grid has to be able to integrate all the renewable energy sources.

“Grids are not steady pieces of machinery and technology, they fluctuate and are very dynamic. It requires a huge amount of people to be monitoring grids. Now we have smart grids, so it’s a little easier with technology and I’m sure with advancements, those are actually going to get better.

“However, with renewable energy integration, renewable energy is very intermittent and so we need to be able to make sure that the grid is stabilised at all times in order to be taking in all these different sources which are coming in at different times and different amounts and then feeding them back to everyone else.”

On the recent development from the European Union (EU) which put a ban on palm oil and limited the amount of fuel that can come from biomass, especially with crop-based plants, Ayu noted that the argument behind this is that if “you start to open it up to any crop, it will just become the new fossil fuel or commodity”.

“You will start planting just to generate biomass and increase renewable energy share. As such, there does have to be a limit as well because as much as we are running out of fossil fuels in the world, we are also running out of arable land. We are probably going to run out of arable land before we run out of fossil fuels.

“Thus, the priority when it comes to agriculture, has to be food and not necessarily energy. That’s why, when you look at the international stage, countries are going to limit how much energy or electricity can be generated from biomass.”