ENERGY INDUSTRY CHALLENGES POLICY PLANNING
TECHNOLOGY AND INNOVATION Biomass in Malaysia, with 80-100 million tonnes yearly, is a promising economic driver. Government support, like National Biomass Strategy (NBS) 2020, is boosting investment. Malaysia, a major oil palm producer, has abundant biomass, such as palm residues, for generating electricity through combustion or decomposition.
Energy Demand and Crossroads: Malaysia faces a critical decision regarding its future energy supply. Meeting the increasing energy demand is essential while ensuring energy security and affordability. Energy Resources: Malaysia currently relies on its depleting oil and gas resources, but these reserves are diminishing. Dependency on International Markets: To meet energy needs, Malaysia depends on volatile international oil and gas markets, which can be unpredictable and costly. Renewable Energy Potential: There is substantial untapped potential in renewable energy sources within Malaysia. Local and Affordable Alternatives: Renewable energy sources can provide local and cost-effective alternatives to fossil fuels.
REGULATORY AND LEGAL FRAMEWORK
RENEWABLE ENERGY FINANCING AND INCENTIVE Project Financing Challenges: Some renewable energy technologies face hurdles in project bankability and financing, impacting participation in the Feed-in Tariff (FIT) programme, particularly in solar energy. Financial Enablers: Malaysia offers various financial incentives, including the Green Investment Tax Allowance (GITA), Green Income Tax Exemption (GITE), and Green Technology Financing Schemes (GTFS), to support renewable energy projects. Investment Requirement: To achieve a 50% renewable energy share in electricity generation, Malaysia needs a substantial investment ranging from USD6 billion and USD11 billion, although the investment risks in terms of system health, financing, and capital costs are relatively low.
Regulatory Overhaul: Overcoming regulatory hurdles is a substantial challenge to harness Malaysia’s renewable energy potential. Tariff Adaptation: Adapting existing tariffs to cater to various renewable projects poses a significant challenge. Comprehensive Project Evaluation: Expanding the assessment criteria for project viability presents a notable hurdle. External Audits Integration: Integrating independent audits into project evaluations is a challenging process to ensure quality and financial sustainability. Small hydropower FIT holders struggle to secure water supply agreements due to state-specific decision- making and permit approval processes.
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Malaysian Technology Strategic Outlook 2023/2024 Energy, Healthcare & Space Industry
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