Helping Malaysia Reduce Its Power Generation Carbon Footprint

Comment From Requestor

Please allow me to express the sincere thanks of SEDA and the Ministry of Energy for the expert assistance rendered to us by the Clean Energy Solutions Center. Your expert was a great help to us in evaluating our existing FIT rates, benchmarking against the rest of the world, as well as proposing rates for geothermal power generation.

He also helped us to clearly understand the pros and cons of FIT versus bidding for solar PV projects, the different mechanisms for bidding, and the size of the projects which should be considered for bidding. Your assistance has helped the Government of Malaysia make the most efficient use of our limited resources to reduce our carbon footprint in power generation. Thank you once again.”

—Ir. Ali Askar Sher Mohamad, Chief Operating Officer, Sustainable Energy Development Authority (SEDA) Malaysia

Through its Ask an Expert assistance program, the Clean Energy Solutions Center responded to three requests for assistance from Malaysia’s Sustainable Energy Development Authority (SEDA). These requests were designed to help the Government of Malaysia develop renewable energy strategies for geothermal, solar photovoltaics (PV), and biomass and biogas projects.

Based on SEDA’s requests, experts with the Ask an Expert program analyzed the following:

  1. Geothermal power development, including current market developments and global geothermal tariff benchmarking. This analysis was designed to support geothermal development on the island of Sabah (Borneo) and to set a tariff for geothermal projects in that region.
  2. The trade-offs between feed-in tariffs (FITs) and competitive tendering for solar PV projects based on global market experience. This analysis was designed to ensure that developers of larger solar PV projects (e.g., 5 MW to 50 MW) could compete outside the restrictive quota of the FIT to avoid consuming all the available capacity and excluding the participation of smaller players.
  3. Malaysia’s biogas, biomass and solar PV tariffs. This analysis was designed to help the Government of Malaysia determine whether to increase the tariffs or introduce additional bonuses for specific project design features to respond to stakeholder comments that current biomass and biogas rates were too low to support cost-effective project development.

After conducting these analyses, Solutions Center experts hosted three full-day workshops in Putrajaya, Malaysia, to gather input from stakeholders. Convening utility, industry, government, regulator and developer stakeholders—in addition to interested citizens—the workshops examined each topic in depth.

Impact of Assistance

The Solutions Center’s analysis was important in addressing several stakeholder concerns, particularly concerning tariff levels, and provided SEDA with an international perspective on tariff levels worldwide.

In addition, with attendance of more than 500 people, the workshops helped the Malaysian government:

  • Improve transparency of the overall decision-making and policy-making processes by gathering interested stakeholders’ views and perspectives on Malaysia’s current FIT framework and the future of the renewable energy industry.
  • Establish a geothermal tariff for Sabah that will be instrumental in mobilizing investment and increasing renewable energy development on the highly fossil-fuel reliant island.
  • Accelerate the early phases of project development by outlining critical issues for geothermal development, as well as key ways to mitigate drilling risk.
  • Ensure a more sustainable pathway toward competitive tendering for larger-scale solar PV development in the country—essential to reaching higher levels of renewable energy penetration in the future.
  • Plan for derivation of tariff rates for biomass and biogas technologies and introduce further differentiations (such as landfill gas, municipal solid waste and agricultural residues).
  • Consider policy mechanisms designed to achieve increased deployment of PV projects.