Energy policy of Malaysia
Encyclopedia
The Energy Policy of Malaysia is determined by the Malaysian Government, which address issues of energy production, distribution, and consumption. The Department of Electricity and Gas Supply acts as the regulator while other players in the energy sector include energy supply and service companies, research and development institutions and consumers. Government-linked companies
Petronas
and Tenaga Nasional Berhad
are major players in Malaysia's energy sector.
Governmental agencies that contribute to the policy are the Ministry of Energy, Green Technology and Water, Energy Commission (Suruhanjaya Tenaga)
, and the Malaysia Energy Centre (Pusat Tenaga Malaysia). Among the documents that the policy
is based on are the 1974 Petroleum Development Act, 1975 National Petroleum Policy, 1980 National Depletion Policy, 1990 Electricity Supply Act, 1993 Gas Supply Acts, 1994 Electricity Regulations, 1997 Gas Supply Regulation and the 2001 Energy Commission Act.
and renewable energy resources
using the latest cost options and diversification of supply sources both from within and outside the country.
In pursuit of the supply objective, policy initiatives, particularly with respect to crude oil and natural gas
, we have aimed at both extending the life of domestic non-renewable energy resources, as well as diversification away from oil dependence to include other forms of energy sources.
of energy and discourage wasteful and non-productive patterns of energy consumption.
The policy's approach to realize this objective is to rely heavily on the energy industry and consumers to exercise efficiency in energy production, transportation, energy conversion
, utilization and consumption through the implementation of awareness programs. Demand side management initiatives by the utilities, particularly through tariff
incentives, have had some impact on efficient utilization and consumption.
Government initiatives to encourage cogeneration
are also aimed at promoting an efficient method for generating heat energy and electricity from a single energy source.
.
The environment objective has seen limited policy initiatives in the past. All major energy development projects are subjected to the mandatory environmental impact assessment
requirement. Environmental consequences, such as emissions
, discharges and noise
are subjected to the environmental quality standards like air quality and emission standards.
, particularly
biomass
, as the 'fifth fuel' resource under the country’s Fuel Diversification Policy. The policy, which
was set out in 2001, had a target of renewable energy providing 5% of electricity generation by 2005,
equal to between 500 and 600 megawatt (MW) of installed capacity. The policy has been reinforced by fiscal
incentives, such as investment tax allowances and the Small Renewable Energy Programme (SREP),
which encourages the connection of small renewable power generation plants to the national grid
.
The Small Renewable Energy Program allows renewable projects with up to 10 MW of capacity to sell
their electricity output to TNB, under 21-year licence agreements. Numerous applications for the
program have been received, mainly involving biomass, and of these over half are for palm oil
waste.
In 2005 there were 28 approved biomass projects involving the installation of 194 MW of grid-connected
capacity. There were also four approved landfill gas
-based projects, with 9 MW of capacity, and 18 mini
hydro-electric
projects offering 69.9 MW of total capacity.
is 19,023 MW, with a maximum demand of 13,340 MW as of July 2007 according to Suruhanjaya Tenaga. Total electricity generation for 2007 is 108,539 GW·h with a total consumption of 97,113 GW·h or 3,570 kW·h per capita
. The generation fuel mix is 62.6% gas, 20.9% coal, 9.5% hydro and 7% from other forms of fuel. In 2007, the country as a whole consumes 514 thousand barrels (23.6 million tonnes) of oil daily against a production of 755 thousand barrels (34.2 million tonnes) per day.
However, Malaysia only has 33 years of natural gas reserves, and 19 years of oil reserves, whilst the demand for energy is increasing. Due to this the Malaysian government is expanding into renewable energy sources. Currently 16% of Malaysian electricity generation is hydroelectric, the remaining 84% being thermal. The oil and gas industry in Malaysia is currently dominated by state owned Petronas
, and the energy sector as a whole is regulated by Suruhanjaya Tenaga, a statutory commission who governs the energy in the peninsula and Sabah, under the terms of the Electricity Commission Act of 2001.
All figures are in megawatts
Source: Suruhanjaya Tenega (Energy Commission) Annual Report
All figures are in megawatts
Source: Suruhanjaya Tenaga Annual Report
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
and Tenaga Nasional Berhad
Tenaga Nasional
Tenaga Nasional Berhad is the largest Electric utility company in Malaysia and also the largest power company in Southeast Asia with MYR 69.8 billion worth of assets. It serves over seven million customers throughout Peninsular Malaysia and also the eastern state of Sabah through Sabah Electricity...
are major players in Malaysia's energy sector.
Governmental agencies that contribute to the policy are the Ministry of Energy, Green Technology and Water, Energy Commission (Suruhanjaya Tenaga)
Energy Commission of Malaysia
The Energy Commission of Malaysia was created under the Energy Commission Act 2001 as a new regulator for the energy industry in Peninsular Malaysia and Sabah...
, and the Malaysia Energy Centre (Pusat Tenaga Malaysia). Among the documents that the policy
Energy policy
Energy policy is the manner in which a given entity has decided to address issues of energy development including energy production, distribution and consumption...
is based on are the 1974 Petroleum Development Act, 1975 National Petroleum Policy, 1980 National Depletion Policy, 1990 Electricity Supply Act, 1993 Gas Supply Acts, 1994 Electricity Regulations, 1997 Gas Supply Regulation and the 2001 Energy Commission Act.
Policy overview
The Ministry of Energy, Green Technology and Water has identified three principal energy objectives that would be instrumental in guiding the development of its energy sector.Supply
To ensure the provision of adequate, secure and cost-effective energy supplies through developing indigenous energy resources both non-renewableNon-renewable resource
A non-renewable resource is a natural resource which cannot be produced, grown, generated, or used on a scale which can sustain its consumption rate, once depleted there is no more available for future needs. Also considered non-renewable are resources that are consumed much faster than nature...
and renewable energy resources
Renewable resource
A renewable resource is a natural resource with the ability of being replaced through biological or other natural processes and replenished with the passage of time...
using the latest cost options and diversification of supply sources both from within and outside the country.
In pursuit of the supply objective, policy initiatives, particularly with respect to crude oil and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
, we have aimed at both extending the life of domestic non-renewable energy resources, as well as diversification away from oil dependence to include other forms of energy sources.
Utilization
To promote the efficient utilizationEfficient energy use
Efficient energy use, sometimes simply called energy efficiency, is the goal of efforts to reduce the amount of energy required to provide products and services. For example, insulating a home allows a building to use less heating and cooling energy to achieve and maintain a comfortable temperature...
of energy and discourage wasteful and non-productive patterns of energy consumption.
The policy's approach to realize this objective is to rely heavily on the energy industry and consumers to exercise efficiency in energy production, transportation, energy conversion
Energy conversion
Transforming energy is when the energy changes into another form.In physics, the term energy describes the capacity to produce changes within a system, without regard to limitations in transformation imposed by entropy...
, utilization and consumption through the implementation of awareness programs. Demand side management initiatives by the utilities, particularly through tariff
Electricity tariff
Electricity pricing varies widely from country to country, and may vary signicantly from locality to locality within a particular country. There are many reasons that account for these differences in price...
incentives, have had some impact on efficient utilization and consumption.
Government initiatives to encourage cogeneration
Cogeneration
Cogeneration is the use of a heat engine or a power station to simultaneously generate both electricity and useful heat....
are also aimed at promoting an efficient method for generating heat energy and electricity from a single energy source.
Environmental
To minimize the negative impacts of energy production, transportation, conversion, utilization and consumption on the environmentNatural environment
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....
.
The environment objective has seen limited policy initiatives in the past. All major energy development projects are subjected to the mandatory environmental impact assessment
Environmental impact assessment
An environmental impact assessment is an assessment of the possible positive or negative impact that a proposed project may have on the environment, together consisting of the natural, social and economic aspects....
requirement. Environmental consequences, such as emissions
Air pollution
Air pollution is the introduction of chemicals, particulate matter, or biological materials that cause harm or discomfort to humans or other living organisms, or cause damage to the natural environment or built environment, into the atmosphere....
, discharges and noise
Noise pollution
Noise pollution is excessive, displeasing human, animal or machine-created environmental noise that disrupts the activity or balance of human or animal life...
are subjected to the environmental quality standards like air quality and emission standards.
Renewable energy policy
The Malaysian government is seeking to intensify the development of renewable energyRenewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
, particularly
biomass
Biomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
, as the 'fifth fuel' resource under the country’s Fuel Diversification Policy. The policy, which
was set out in 2001, had a target of renewable energy providing 5% of electricity generation by 2005,
equal to between 500 and 600 megawatt (MW) of installed capacity. The policy has been reinforced by fiscal
incentives, such as investment tax allowances and the Small Renewable Energy Programme (SREP),
which encourages the connection of small renewable power generation plants to the national grid
National Grid, Malaysia
National Grid, Malaysia is the high-voltage electric power transmission network in Peninsular Malaysia. It is operated and owned by Tenaga Nasional Berhad by its Transmission Division...
.
The Small Renewable Energy Program allows renewable projects with up to 10 MW of capacity to sell
their electricity output to TNB, under 21-year licence agreements. Numerous applications for the
program have been received, mainly involving biomass, and of these over half are for palm oil
Palm oil
Palm oil, coconut oil and palm kernel oil are edible plant oils derived from the fruits of palm trees. Palm oil is extracted from the pulp of the fruit of the oil palm Elaeis guineensis; palm kernel oil is derived from the kernel of the oil palm and coconut oil is derived from the kernel of the...
waste.
In 2005 there were 28 approved biomass projects involving the installation of 194 MW of grid-connected
capacity. There were also four approved landfill gas
Landfill gas
Landfill gas is a complex mix of different gases created by the action of microorganisms within a landfill.-Production:Landfill gas production results from chemical reactions and microbes acting upon the waste as the putrescible materials begins to break down in the landfill...
-based projects, with 9 MW of capacity, and 18 mini
hydro-electric
Small hydro
Small hydro is the development of hydroelectric power on a scale serving a small community or industrial plant. The definition of a small hydro project varies but a generating capacity of up to 10 megawatts is generally accepted as the upper limit of what can be termed small hydro. This may be...
projects offering 69.9 MW of total capacity.
Production and consumption
Traditionally, energy production in Malaysia has been based around oil and natural gas. Malaysia currently has 13GW of electrical generation capacity. Power generation capacity connected to the Malaysian National GridNational Grid, Malaysia
National Grid, Malaysia is the high-voltage electric power transmission network in Peninsular Malaysia. It is operated and owned by Tenaga Nasional Berhad by its Transmission Division...
is 19,023 MW, with a maximum demand of 13,340 MW as of July 2007 according to Suruhanjaya Tenaga. Total electricity generation for 2007 is 108,539 GW·h with a total consumption of 97,113 GW·h or 3,570 kW·h per capita
Per capita
Per capita is a Latin prepositional phrase: per and capita . The phrase thus means "by heads" or "for each head", i.e. per individual or per person...
. The generation fuel mix is 62.6% gas, 20.9% coal, 9.5% hydro and 7% from other forms of fuel. In 2007, the country as a whole consumes 514 thousand barrels (23.6 million tonnes) of oil daily against a production of 755 thousand barrels (34.2 million tonnes) per day.
However, Malaysia only has 33 years of natural gas reserves, and 19 years of oil reserves, whilst the demand for energy is increasing. Due to this the Malaysian government is expanding into renewable energy sources. Currently 16% of Malaysian electricity generation is hydroelectric, the remaining 84% being thermal. The oil and gas industry in Malaysia is currently dominated by state owned Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
, and the energy sector as a whole is regulated by Suruhanjaya Tenaga, a statutory commission who governs the energy in the peninsula and Sabah, under the terms of the Electricity Commission Act of 2001.
Peninsular Malaysia Historical Electricity Production and Consumption Data
| Year | Production Capacity | Maximum Demand | ||
|---|---|---|---|---|
| TNB Production Capacity | IPP Production Capacity | Total Production Capacity | ||
| 2005 | 6346 | 11277 | 17623 | 12493 |
| 2006 | 6346 | 11977 | 18323 | 12990 |
| 2007 | 6346 | 13377 | 19723 | 13620 |
| 2008 | 6436 | 13377 | 19723 | 14007 |
| 2009 | 7040 | 14777 | 21817 | 14245 |
All figures are in megawatts
Source: Suruhanjaya Tenega (Energy Commission) Annual Report
Sabah Historical Electricity Production and Consumption Data
| Year | Production Capacity | Maximum Demand |
|---|---|---|
| 2005 | 660 | 548 |
| 2006 | 708 | 594 |
| 2007 | 706 | 625 |
| 2008 | 812 | 673 |
| 2009 | 903 | 719 |
All figures are in megawatts
Source: Suruhanjaya Tenaga Annual Report
Energy efficiency
Industrial consumers use about 40% of primary energy, as well as about 55% of the electricity (which consumes about 38% of primary energy) used in Malaysia. This means that industrial consumers use about 60% of the total energy used in Malaysia. The Malaysian Energy Commission has set up various energy efficiency programs.See also
- Biofuel policy of Malaysia
- Sabah ElectricitySabah ElectricitySabah Electricity Sdn. Bhd. is an electrical company that generates, transmits and distributes electricity mainly in Sabah and Federal Territory of Labuan. It supplies electrical power to 413,983 customers distributed over a wide area of 74,000 km2. 82.8% of the customers are domestic...
- Sarawak Electricity Supply CorporationSarawak Electricity Supply CorporationSyarikat SESCO Berhad is the privatized organization responsible for the generation, transmission and distribution of electricity for the Sarawak state in Malaysia. It was privatized on 1 July 2005.SESCo provides electricity to about 382 000 customers...
- Tenaga Nasional Berhad