Malaysia Renewable Energy Roadmap (MyRER)
On 30 December 2021, the Ministry of Energy and Natural Resources and Sustainable Energy Development Authority (SEDA) Malaysia launched the Malaysia Renewable Energy Roadmap (MyRER) This roadmap aims to achieve 31% Renewable Energy (RE) share in the national capacity mix by 2025 and attain decarbonisation of the electricity sector by 2035.
This alert which outlines the workstreams and scenarios for RE development in the nation is prepared by associate, Nur Shohidah Ramlee from the firm’s Energy, Infrastructure & Project practice.
On 30 December 2021, the Ministry of Energy and Natural Resources and Sustainable Energy Development Authority (SEDA) Malaysia launched the Malaysia Renewable Energy Roadmap (MyRER). This roadmap aims to achieve a 31% Renewable Energy (RE) share in the national capacity mix by 2025 and attain decarbonisation of the electricity sector by 2035. This alert outlines the workstreams and scenarios for RE development towards the 2025 RE target and the 2035 milestone. Background Throughout 2001 to 2020, various initiatives, programmes, strategies as well as incentives have been introduced and implemented to support the growth of RE technologies in Malaysia. Albeit global economy was severely impacted by the COVID-19 pandemic, the RE sector remains relatively resilient. The MyRER serves as the strategic framework in realising the Government’s future RE aspiration with an anticipated cumulative investment of RM43 billion and 46,636 job opportunities. The roadmap aims to determine the renewable energy targets in the electricity mix-up to the year 2035 and strategies required to achieve renewable energy targets, which includes: Synthesis of historical and current data on Malaysia’s electricity sector to build a baseline of RE. Review of resource availability for renewables. · Setting of RE capacity targets for 2025 in line with the Government’s aspirations. · Development of RE scenarios for 2025. · Setting a yearly plant-up roadmap to achieve 2025 RE capacity targets and 2035 scenarios. · Setting of strategies and key actions to achieve RE capacity target and scenarios; and · Assessment of the impact of RE capacity targets on socio-economic indicators. In achieving these targets, MyRER considers two distinct scenarios for RE development: Business as usual - where existing policies and programmes will be implemented without further extension. (b) New capacity target - where there would be a much higher RE capacity target which is in line with the capacity development plan of the Planning and Implementation Committee for Electricity Supply and Tariff (JPPPET 2020) for Peninsular Malaysia, the JPPPET 2021 for Sabah and current outlook for Sarawak. Strategic Framework The MyRER strategic framework is built upon four technology-specific pillars (i.e. Solar Pillar, Bioenergy Pillar, Hydro pillar and New Solutions and Resources Pillar - including geothermal, wind and energy storage technologies). This takes into account the available RE resources, existing institutional and regulatory framework, industry practices, technology adoption and projected future social and economic development. The key actions to be implemented for each of the pillars are as follows: 1. Solar · Review future Net Energy Metering (NEM) programmes for rooftop solar and the offtake tariffs to gradually converge with the energy costs for more equitable socialisation of grid and system operation costs. · Explore new business models in addition to those enabled by the NEM and Large Scale Solar (LSS) programmes. · Explore LSS auctions focusing on modern technologies with lesser land used such as floating solar. · Improve and continue solar auctions to ensure competitive tariff. · Explore a framework for the deployment of solar quota based on direct corporate offtake or different forms of Power Purchase Agreements. · Enhance existing rooftop programmes including exploring possible frameworks to allow non-utility off-takers under NEM. · Facilitate, encourage and increase participation of Government agencies in Government solar rooftop programmes. 2. Bioenergy · Explore the feasibility for the clustering of bioenergy power for power generation to improve project economics. · Assess auction systems beyond the Feed-in Tariff (FiT) to support additional capacity build-up for post-2025. · Conduct a feasibility study of grid extensions to allow additional development of bioenergy clusters by encouraging off-grid bioenergy power plants to re-power and upsize and build new off-grid and micro-grid power plants. · Explore possibility of a net metering scheme for bioenergy resources. ·Leverage available bioenergy feedstock from municipal solid waste for the development of Waste to Energy (WTE) facilities as a two-pronged strategy in addressing the waste management issue and in supplying energy to the national grid. ·Conduct feasibility study of bio-Compressed Natural Gas power generation and biomass co-firing in coal-fired power plants. ·Encourage studies and assessments to be conducted on improvement in bioenergy power generation technology. 3. Hydro ·Continue to optimise small hydro FiT through auctioning while considering differences in development costs for low-head and high-head system. ·Encourage hydro-geological study for identification and characterisation of new high potential sites for small hydro development. The study shall lead to development of open access geo-referenced database that will be utilised by developers. ·Explore lifetime extension of existing large hydro peaking plants to support greater Variable Renewable Energy penetration. ·Coordinate with state authorities to expedite approvals and facilitate implementation and operation regulations for hydro plants development. · Devise and improve the existing tendering process format for small hydro development. · Continue to encourage identification and characterisation of new sites for small hydro through hydrogeological study. · Enhance project development coordination and facilitation with state authorities to expedite approvals including facilitation on hydro plants related development and operation regulations. · Assess deployment of large hydro as part of the national power development plan through collaboration between regulators, state authorities and utilities. 4. New Technology and Solutions · Explore new RE technologies, resources and solutions for efficient and cost effective RE deployment. · Assess required energy storage roll-out to maintain system stability. · Conduct feasibility study and economics assessment on the implementation of new RE sources including geothermal, onshore and offshore wind. Transition Impacts Prioritise and roll out cost-effective energy storage solutions. The energy transition phase has been identified as one of the main economic recovery post-pandemic. By 2025, 1.2 GW of RE capacity additions will be planned (without displacing the non-RE capacity additions) in order to reach the RE 31% target. The build-up of RE capacity will support over MYR19.93 billion of cumulative investment in RE from 2021-2025 and results in the employment of around 28,416 jobs by 2025. Post-2025, 7.1 GW of coal capacity under existing PPAs is expected to be retired under the New Capacity Target scenario. RE share in the capacity mix will increase to 40% by 2035, natural gas increases to 41% share, while the share of coal drops to 18%. By 2035, the implementation of the New Capacity Target scenario is expected to generate 46,636 direct and indirect jobs.
In achieving the stipulated RE targets and aspirations, commitments by policymakers, industry players and strategic partners including financial institutions shall be the determinant in ensuring the successful implementation of this Roadmap.
The MyRER can be accessed here.
Authored by Nur Shohidah Ramlee, an associate from the firm’s Energy, Infrastructure & Project practice.
2 March 2022