KUALA LUMPUR: Most of the 10 flagship catalyst projects and initiatives implementation for the National Energy Transition Roadmap (NETR) introduced in August last year, are on schedule.
NETR outlines 10 flagship catalyst projects and 50 key initiatives under six energy transition levers.
They are energy efficiency (EE), renewable energy (RE), hydrogen, bioenergy, green mobility, as well as carbon capture, utilisation and storage (CCUS) to unlock economic opportunities and reduce carbon emissions.
The flagship catalyst projects are championed by various entities including Petroliam Nasional Bhd, Tenaga Nasional Bhd, Khazanah Nasional Bhd and SEDC Energy.
The NETR flagship catalyst projects and initiatives, championed by different entities both in the public and private sectors, demonstrate the varying and unique approaches in advancing Malaysia energy transition.
The projects and initiatives serve as pathfinders to explore new economic opportunities in supporting the nation's green growth for climate resilience through energy transition.
The Energy Efficiency and Conservation Act 2023 has been enacted, while the bill on CCUS is schedule to be tabled by the end of 2024.
Another notable progress is the completion in the construction and commission of 2.0 per cent biomass co-firing system in Tanjung Bin Power Plant.
"The co-firing initiative with a target capacity of at least 15 per cent biomass by 2027 is anticipated to substantially reduce carbon dioxide, emissions, equivalent to planting about 141 million mature trees.
The introduction of Corporate Renewable Energy Supply Scheme (CRESS) in July 2024 enabled the companies to supply or acquire green electricity through the national grid network system.
The scheme is an important enabler for several the NETR projects as an off-take mechanism, it said.
Another significant progress is the development of the large scale solar photovoltaic (PV) plants under the fifth competitive bidding round by the Energy Commission in April 2024.
These solar power plants with a total combined capacity of 2,000 megawatt (MW) are scheduled to commence operations in 2026.
Likewise, TNB is advancing its RE initiatives with the commencement of the hybrid hydro-floating solar PV project at its hydro dam lakes, with a total planned capacity of 2,500MW.
The project, starting with an initial 30MW at the Chenderoh hydro dam in Perak, is set to expand to other locations including the Temenggor hydro dam in Perak and Kenyir in Terengganu by 2027.
A successful National Energy Transition Roadmap (NETR), which was introduced in August last year, could increase the "green" energy contribution to Malaysia's gross domestic product (GDP) to RM220 billion in 2050 from RM25 billion in 2023.
"The successful implementation of the NETR is expected to increase the sector's GDP contribution from RM25 billion in 2023 to RM220 billion in 2050, with 310,000 job opportunities will be generated.
"It is also expected to reduce greenhouse gas (GHG) emissions by 32 per cent in energy sector from 259 megatonne of carbon dioxide equivalent (MtCO,eq.) in 2019," the report said.
In addition, the roadmap outlines the phasing out of coal as energy source by 2050, with natural gas being the primary contributor of the total primary energy supply mix at 56 per cent while renewables, namely solar, hydro and bioenergy contributing 23 per cent.
Issues and Challenges
The NETR faces several key challenges including the high cost of energy transition, lack of awareness and demand, technical and commercial feasibility issues, the undesirable consequences associated with fossil-fuel transitioning campaign on Malaysia's economy, as well as global uncertainties.
The high cost of energy transition requires a total financing of at least RM1.2 trillion.
The report said it is one of the main challenges in achieving the targets outlined in the NETR by 2050.
"About 63 per cent of this funding is primarily needed for RE and green mobility. Investments in RE, which includes power generation and grid network will involve expanding solar PV and hydropower as well as enhancing grid infrastructure," it said.
Meanwhile, green mobility funding focuses on expanding public transportation, boosting domestic EV production, and increasing EV charging infrastructure.
Significant investments are also necessary to scale up nascent hydrogen and CCUS technologies, alongside commitments to improve energy efficiency, advance sustainable aviation and marine transports, as well as establishing green skilling programmes.
Investments in RE which include grid network costs about RM170 billion and for power generation the cost will be about RM260 billion.
"Another significant challenge is the lack of awareness and demand due to misconceptions on the benefits of transitioning to sustainable energy. It is often perceived that sustainable energy is costly and less reliable compared to conventional sources.
"This has resulted in the averseness of industries, businesses and households to invest and procure energy-efficient technology and products," the report added.
Both technical and commercial feasibility also pose significant challenges to the energy transition. Shortage of expertise, particularly in green technologies, and the high capital expenditure as well as scarcity of resources would further impede the pathway to net-zero.
On another note, the development of the CCUS in Malaysia has yet to reach commercial scale, due to challenges arising from both the technology's nascent status and associated high cost.
The report also said that another inevitable challenge is the international commitment to move away from fossil fuels, as deliberated at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC - COP28).
This historic milestone has intensified the call to reduce investments in fossil fuel industries particularly in energy sector.
"While this supports the net-zero transition pathway, the challenges for Malaysia is to ensure the economic activities will not be affected with the call since energy is one of the key enablers for economic growth."
Way Forward
In response to the high cost of energy transition, the report said Malaysia may need to consider a blended financing approach, which includes equity crowdfunding, venture capital, philanthropic contributions and multilateral development funds.
The NETF, which was unveiled under Phase 2 of the NETR in August 2023, has been designed as a catalytic blended finance platform, aimed at expediting the mobilisation and deployment of capital.
The facility will enhance the accessibility of funds, streamline investment processes, and ensure a seamless financial flow to finance energy transition projects.
"Energy transition projects are still surrounded by apprehensions on the commercial viability, either due to being technologically immature or yet to reach commercial scale.
"However, acknowledging the potential for the projects to achieve commercial scale, government support is pertinent, both financial and non-financial, to accelerate the adoption and commercialisation of green technology, hence contributing to the nation's sustainable future," the report said.
In line with the Putrajaya Low Carbon Green City initiative, 11 locations have been selected for solar roof installations through a collaboration between TNB and Gentari.
These solar roofs help lower GHG emissions, decrease carbon footprint, support climate change mitigation efforts, thereby reducing operating costs.
The government is also promoting the green economy through the development of a high-tech hub with the establishment of the Kerian Integrated Green Industrial Park.
Meanwhile, the government provided over RM59 billion in grants, loans and financing guarantees for micro, small, and medium enterprises (MSMEs) to bolster business capacity and drive income growth.
As of end-July 2024, a total of RM2.9 billion was approved for over 20,800 borrowers.
In addition, the micro loan schemes under Bank Simpanan Nasional Bhd has provided RM245.7 million to over 6,500 borrowers, covering hawkers, traders, micro-entrepreneurs, gig workers and new graduates.
Meanwhile, Syarikat Jaminan Pembiayaan Perniagaan Bhd has guaranteed 10,153 SMEs loan financing with a total amount of RM10.9 billion while Syarikat Jaminan Kredit Perumahan Bhd approved RM2.8 billion as a housing financing credit guarantee, benefitting 8,644 individuals.