Monday, December 24, 2012

Malayisa Renewable Energy Outlook

The energy demand of South-East Asia is estimated to growth at the rate of 6.5% per year over the next decade. Renewable energy (RE) resources play an important role in providing sufficient power supply, without any adverse impact to the environment. Five countries in the region – Indonesia, Malaysia, Philippines, Thailand and Vietnam aim to install total of 32 GW of new RE capacity between 2011 and 2025.

Each country is focusing differently on the technologies and incentives in growing its RE portfolio. Below table shows the focus of RE technologies for each country.

RE Technology Focus
Geothermal & Small Hydro
Solar & Biomass
Geothermal & Wind
Biomass & Wind
Small Hydro & Wind

In 2009, Malaysia government passed the National Renewable Energy Policy and Action Plan which set a roadmap for RE development. It created a Green Technology Financing Scheme to offer soft loans to the companies in RE & EE sectors. In December 2011, RE feed-in tariff (FiT) was launched to promote domestic, business and industrial sectors to venture into RE technologies, including biogas, biomass, solid waste, small hydro and solar PV. Although Malaysia has the shortest history in promoting RE in Southeast Asia, it has experienced the quickest development in the region.

The Sustainable Energy Development Authority (SEDA) Malaysia was officially set up in September 2011 to administer and manage the implementation of the FiT scheme. To date, 43 MW of RE FiT application has been approved, with another 348.57 MW expected in 2014.

Malaysia RE market is expected to grow to 1 GW by 2015, 2 GW by 2020, 4 GW by 2030 and eventually 21 GW by 2050. Initially, biomass would dominate the market. Subsequently solar PV would be the dominant source of RE by 2020 and would take up 30% of the total capacity by 2030.

The major obstacle for Malaysia RE development is the perception of risk reckoned by banks and financial institutions. This is due to lack of technical information about RE projects. However, RE could be worth RM19 billion (US$6.1 billion) of loan value by 2020. It is therefore important for the banks and financial institutions to support this fast growing power business.

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