ARTICLE IN PRESS

Energy Policy 34 (2006) 23882397 www.elsevier.com/locate/enpol

Energy for sustainable development in Malaysia: Energy policy and alternative energy
Abdul Rahman Mohamed, Keat Teong Lee
School of Chemical Engineering, Engineering Campus, Universiti Sains Malaysia, Seri Ampangan, 14300 Nibong Tebal, Seberang Perai Selatan, Pulau Pinang, Malaysia Available online 31 May 2005

Abstract Energy is often known as the catalyst for development. Globally, the per capita consumption of energy is often used as a barometer to measure the level of economic development in a particular country. Realizing the importance of energy as a vital component in economic and social development, the government of Malaysia has been continuously reviewing its energy policy to ensure long-term reliability and security of energy supply. Concentrated efforts are being undertaken to ensure the sustainability of energy resources, both depletable and renewable. The aim of this paper is to describe the various energy policies adopted in Malaysia to ensure long-term reliability and security of energy supply. The role of both, non-renewable and renewable sources of energy in the current Five-Fuel Diversication Strategy energy mix will also be discussed. Apart from that, this paper will also describe the various alternative energy and the implementation of energy efciency program in Malaysia. r 2005 Elsevier Ltd. All rights reserved.
Keywords: Alternative energy; Energy policy; Sustainable development

1. Introduction Life is a continuous process of energy conversion and transformation. The accomplishment of civilization has largely been accomplished due to the increasing efcient and extensive harnessing of various forms of energy to extend human capabilities and ingenuity. Energy is thus one of the indispensable factors for continuous development and economic growth (Rogner and Popescu, 2001). However, at the same time, energy production can contribute to local environment degradation, such as air pollution and global environmental problems, principally climate change. Lately, the demand for energy is expected to increase worldwide over the next 24 years (International Energy Outlook, 2004), both in the industrial countries and particularly in the developing countries like Malaysia where rapid economic growth is expected. Fig. 1 shows the energy demand
Corresponding author. Tel.: +60 4 594 1012; fax: +60 4 594 1013.

E-mail address: chktlee@eng.usm.my (K.T. Lee). 0301-4215/$ - see front matter r 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2005.04.003

for Malaysia in the year 1999, 2002 and estimated values for 2005, 2010 (Thaddeus, 2002; UK Trade & Investment, 2003). It can be seen that the energy demand in Malaysia increases rapidly as the energy demand increase almost 20% within the last 3 years (from 1999 to 2002). The energy demand is further expected to increase to 18,000 MW by the year 2010. In order to meet the increasing demand of energy in Malaysia, a major challenge facing the power industry will be having an effective and sustainable energy policy. An effective and sustainable energy policy has two main considerations. The rst consideration is to increase access to affordable, modern energy services in countries that is lacking and secondly, to nd the mix of energy resources and technologies (efciencies) that will reduce the adverse environmental impacts of providing necessary energy services (Spalding-Fecher et al., 2005). Since all the urban areas and 93% of the rural areas in Malaysia have access to electricity (World Employment Report, 2001), the crucial challenge facing the power sector in Malaysia currently is the issue of sustainability that is to

ARTICLE IN PRESS
A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 2389

20 18 16 14 12 10 8 6 4 2 0 1999 2002 Year 2005 2010

Fig. 1. Energy demand in Malaysia. Sources: Thaddeus (2002) and UK Trade & Investment (2003).

ensure the security and reliability of energy supply and the diversication of the various energy resources. The question of security and reliability of supply is critical, to ensure smooth implementation of development projects to spur economic growth in Malaysia while diversication of energy resources is critical to ensure that the country is not dependent only on a single source of energy (Leo-Moggie, 1996). At the same time, these challenges must be met without having adverse effect on the environment to ensure sustainability. Therefore, the aim of this paper is to describe the various energy policies adopted in Malaysia to ensure long-term reliability, sustainability and security of energy supply. The role of both, non-renewable and renewable sources of energy in the current Five-Fuel Diversication Strategy energy mix will also be discussed. Apart from that, this paper will also describe the various alternative energy and the implementation of energy efciency program in Malaysia.

2. Energy policies in Malaysia Throughout the years, the government of Malaysia has formulated numerous energy-related policies in order to ensure the long-term reliability and security of energy supply for sustainable social-economic development in the country. The various energy policies included the National Energy Policy (1979), National Depletion Policy (1980) and Fuel Diversication Policy (1981, 1999). The National Energy Policy has three primary objectives; supply, utilization and environmental. The rst primary objective is to ensure the provision of adequate, secure and cost-effective energy supply by developing indigenous energy resources (both nonrenewable and renewable) using least cost options and to diversify supply sources (both from within and outside the country). The second objective is to promote the efcient utilization of energy and discourage wasteful and non-productive patterns of energy

consumption within the socio-cultural and economic parameters. The nal objective is to ensure that factors pertaining to environmental protection are not neglected in the pursuit of the supply and utilization objectives. Environmental challenges facing the energy sector cover climatic change, air and water pollution as well as solid waste, which are mainly caused by the increasing use of fossil fuels (Hitam, 1999). On the other hand, the National Depletion Policy is aimed to conserve the countrys energy resources, particularly oil and gas, as these resources are nite and non-renewable. In this respect, the production of crude oil was limited to an average of 630,000 barrels per day (bpd) while the consumption of gas in Peninsular Malaysia is limited to about 32,000 million standard cubic feet per day (Mariyappan, 2000). The Fuel Diversication Policy in Malaysia was continuously reviewed to ensure that the country is not too dependent on a single source of energy. Table 1 shows the energy mix in Malaysia for the year 1980, 1990, 2000 and 2003 (Abdul-Rahman, 2003; BioGen, 2003). Since 1980, the Malaysian government has implemented the four-fuel diversication strategy in the energy mix. This strategy was implemented after the occurrence of two international oil crisis and quantum leaps in prices in the year 1973 and 1979, in which during that time, the Malaysian energy sector had been highly dependent on a single source of energy, oil. Faced with the possibility of prolonged energy crisis, the government called for the diversication of energy resources away from oil. Other options of energy resources available at that time were hydropower, natural gas and coal as there were large untapped indigenous hydropower and natural gas reserves, while coal was considered an abundant worldwide resource with a very low and stable price (Thaddeus, 2002). As a direct consequence of this strategy, the contribution of oil to the energy mix has dropped drastically from a high 90% dependence in 1980 to less than 10% in 2003 as shown in Table 1. On the other hand, natural gas, coal, hydro and biomass contributed 71.0%, 11.9%, 10.0% and 1.1%, respectively to the energy mix. However, using conventional non-renewable energy such as fossil fuels (oil and coal) and natural gas in the energy mix has

Energy demand ('000 MW)

Table 1 Energy mix in Malaysia Source Oil Natural gas Hydro Coal Biomass 1980 (%) 87.9 7.5 4.1 0.5 1990 (%) 71.4 15.7 5.3 7.6 2000 (%) 53.1 37.1 4.4 5.4 2003 (%) 6.0 71.0 10 11.9 1.1

Sources: Abdul-Rahman (2003); BioGen (2003).

ARTICLE IN PRESS
2390 A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397

two major disadvantages. The nature of non-renewable energy makes it deplete to a nite depletable resource and secondly, the combustion of non-renewable energy like oil, coal and natural gas contributes signicantly to the emission of greenhouse gasses, that raise the issue of climate change. Both of these issues are of major global environmental concerns that will have disastrous impact on the socio-economic development in Malaysia. Furthermore, Malaysia is also a signatory to the UN Convention on Climate Change and the Kyoto Protocol which commits it to take steps to reduce green house gas emissions. On the other hand, it was reported that developing nations are largely expected to account for the increment in the world energy consumption. In particular, energy demand in developing Asia is projected to double over the next quarter century due to the emerging economic growth (International Energy Outlook, 2004). Considering the fact that energy demand in Malaysia is estimated to be growing at a rate of about 56% annually (UK Trade & Investment, 2003), against nonrenewable conventional energy resources and the negative impact towards the environment, the government realized the importance of further diversifying the energy mix into more sources of alternative energy. Thus, under the 8th Malaysia Plan (20012005), the government of Malaysia had changed the four-fuel policy to the ve-fuel policy with the addition of renewable energy as the fth source of fuel in 1999. In a long run, the aim of the policy was to generate 5% of the countrys electricity from renewable sources by 2005 (Leo-Moggie, 2001).

million cubic feet per day. Based on the natural gas reserves and production rate in Malaysia, the ratio between reserve and production is 87 (assuming that the production rate remains constant), indicating that natural gas could still contribute to the energy mix as a main source of energy for the next 87 years as compared to about 12 years for oil. At the moment, about 75% of the energy mix in Malaysia is contributed by natural gas as a source of fuel. The natural gas is supplied via a gas reticulation system installed by the national petroleum company, PETRONAS. 3.2. Coal Being the cheapest and most abundantly available fossil fuel, coal will always have a role in the energy mix of a particular country. In fact, in some countries like USA and China, coal is the main source of fuel. On the other hand, coal only contributes about 12% to the energy mix in Malaysia in the year 2003 (Table 1). The coal reserve in Malaysia currently stands at about 1712 million tones of various coal ranging from lignite to anthracite. The coal reserve can be further divided into 275 million tones of proven reserve, 347 million tones of indicated reserve and 1090 million tones of inferred reserve. The coal reserves (69%) in Malaysia are found in Sarawak while 29% are found in Sabah and the remaining 2% are found in Peninsular Malaysia (Thaddeus, 2002). Generally, the coal reserves in Malaysia have heat values ranging between 21,000 and 30,000 kJ/kg with low ash and sulfur levels. Locally, Malaysias coal reserve is actually sufcient to meet its demand, but currently 90% of the coal demands in the country are still imported, mainly from Australia, Indonesia, China and South Africa. This is mainly due to the high extraction cost of locally sourced coal. The high cost of locally sourced coal is because most of Malaysias coal deposits are located in the interior areas where infrastructure are poor. The development of infrastructure to transport coal from the interior areas to the end user is costly and most of the coal deposit requires underground mining, which is more costly as compared to surface mining. Further more, the local coal industry faces stiff competition from other countries which have bigger reserves and more establish coal industry. However, the government of Malaysia is currently promoting the utilization of locally source coal by the implementation of National Mineral Policy. Under the policy, the private sectors will be encouraged to play a key role in the development of coal resources, through greater involvement in exploration, development and production activities. They will be encouraged to take advantage of new technologies that would increase productivity. The most promising expected outcomes include improvements in underground mining methods, the use of larger equipment in surface mining operations

3. Energy mix for sustainable development As mentioned, Malaysia is currently adopting the Five-Fuel Diversication Strategy energy mix implemented in the year 1999. In this strategy, the energy mix in Malaysia is contributed by ve main sources, namely natural gas, coal, oil, hydro and renewable energy. 3.1. Natural gas With the discovery of natural gas in the year 1983, its contribution in the energy mix has grown increasing signicant throughout the years. Malaysia natural gas reserves currently stands at 87 trillion cubic feet. Out of this, 58 trillion cubic feet is proven reserves. A sum of 36.6 trillion cubic feet of the total 87 trillion cubic feet are reserves found in the coast of West Malaysia while the rest are reserves found in the coast of East Malaysia (Sabah & Sarawak). Natural gas reserves in Malaysia is the largest in South East Asia and 12th largest in the world. Malaysia is also one of the main producer of natural gas in Asia with a production rate of 1000

ARTICLE IN PRESS
A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 2391

and computerization of the administrative and mine maintenance activities (Leo-Moggie, 2002). Due to the abundance and stable price of coal, it has been and will continue to be an essential component of long- term sustainable development, not only in Malaysia but also the world. In the near future, assuming that all the coals used for power generation in Malaysia will be mined locally, 6.0 million tones of coals would be required annually. Based on the coal reserves and requirement rate, the ratio between reserve and requirement is 285 (assuming that the requirement rate remains constant), indicating that coal could still contribute to the energy mix for the next 285 years. A more sustainable energy mix for Malaysia in the longer term will see a greater contribution of coal to the energy mix of about 4045%, while natural gas will contribute less than 50% (Leo-Moggie, 2002). This is due to the commissioning of new coal-red electricity generating plants, which will account for 60% of the increasing demand of energy in the future. Thus, the demand for coal for electricity generation is projected to increase drastically, from an estimated 6.03 million tones in 2000 to between 19 and 20 million tones per annum by 2010 (Leo-Moggie, 2002). Although coal is projected to play a far more important role in the energy mix, nevertheless, its utilization faces several major challenges. Among some of them are the emissions of green house gasses and air pollutants such as sulfur dioxide (SO2) and oxides of nitrogen (NOX). Thus, the environmental problems associated with coal must be closely studied to nd new ways to overcome these problems. Fortunately, technological advances achieved in the recent years has made coal a much cleaner fuel today. In particular, signicant increases in thermal efciency and reductions in sulfur and nitrogen oxides and particulate emissions have been achieved. With the right technology, the process of coal extraction, movement and more efcient combustion system will help to reduce the environmental concerns associated with the use of coal for producing electricity. In this context, Malaysia will remain committed to the goals of sustainable development and thus measures will be continuously improved to ensure that the production and utilization of coal will meet environmental standards. Clean-coal technology, which includes electrostatic precipitators and ue gas desulfurization technology for air pollutants emission control, will be utilized in the new coal-red power plants to ensure that environmental standards are met (Leo-Moggie, 2002). However, the installments of gas cleaning technology will increase the capital costs of the power plant. For instance, the installation of a wet-type ue gas desulfurization that has an efciency of removing more than 90% of the SO2 produced will add an additional US$ 80150/kW to the capital cost (Kataoka, 1992).

3.3. Hydro Indigeneously, Malaysia has a substantial amount of hydroelectric resources. The hydropower potential in Malaysia is estimated at 29,000 MW. However, only 2000 MW off the 29,000 MW is currently utilized (LeoMoggie, 1999). This is basically due to the high capital investment required to develop the hydropower and often involve socio-economic issues. The development of a hydropower dam is overwhelmingly complex because the issues are not conned to the design, construction and operation of dams themselves but embrace the issues of social, environmental and political issues. Global estimates of the magnitude of impacts include some 4080 million people displaced by dams while 60% of the worlds rivers have been affected by dams and diversions. Furthermore, it was estimated that the investment involved in the construction of large hydropower dams worldwide is estimated at more than US$ 2 trillion (The World Commissions on Dams, 2000). Nevertheless, hydropower dams can and have made important and signicant contribution to human development. Firstly, hydropower dams can generate electricity that are clean and renewable. In the longer term, electricity from hydropower is relatively cheaper as compared to other sources (oil and natural gas) and the cost will not be affected by the changing fuel prices, which is currently determined by international market. Apart from that, many hydropower projects had also brought socio-economic development such as ood control, irrigation, tourism, local employment and skills development, rural electrication and the expansion of physical and social infrastructure such as roads and schools or rather as a whole, the opening up of interior areas of the country to other economics. Currently, the biggest hydropower project in Malaysia is the on-going Bakun hydropower project having a capacity of 2400 MW. The Bakun hydroelectric project will involve the construction of a 205 m high rock lled concrete dam creating a reservoir of 695 km2. This reservoir is small compared with some of the hydroelectric power stations such as the 5800 km2 for the 2400 MW Aswan Dam, 4500 km2 for the 1500 MW Kariba Dam in Zambia and 8500 km2 for the 850 MW Akosomb Dam in Ghana (Leo-Moggie, 1995). The Bakun project is expected to cost about RM 15 billion (US$ 4 billion) including the 1650 km of transmission system of which 650 km will be the undersea cable. Its construction will generate much job opportunities as well as transfer of technology and know-how to the country. The implementation and completion of the project will also bring much development to Sarawak especially to the interior areas and benet the whole country and the people. This project was initially projected to be completed in the year 2003, but due to

ARTICLE IN PRESS
2392 A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397

the Asian Financial crisis in 1997 and 2001 this project was halted. However, engineering work was resumed in October 2002, but the completion date is still yet to be determined (Plant Engineering Business, 2004). 3.4. Oil The depleting reserves and high price for oil had signicant effect on the role of oil in the energy mix. The contribution of oil in the energy mix has declined sharply from a high 90% in the year 1980 to merely less than 10% in the year 2003 (Table 1). Based on the year 2003, Malaysia contains proven oil reserves of 3.0 billion barrels, while the production has been relatively stable at around 700,000 barrels per day (EIA, 2003). If the production rate is maintained at 0.25 billion barrels per year, the ratio between reserve and production is 12, indicating that within 12 years, Malaysias oil will be exhausted. Therefore, the contribution of oil in the energy mix is expected to further decline to less than 1% by the year 2010 (Thaddeus, 2002). Apart from using the oil for power generation, the remaining oil is exported either as crude oil or downstream petroleum products. 3.5. Renewable energy The development of renewable energy in Malaysia is still in the early stage. As mentioned, in the 8th Malaysia Plan (20012005), the government have replaced the Four Fuel Diversication Policy with a Five Fuel Diversication Policy in 1999 by the addition of renewable energy as the fth source of fuel. It was estimated that by utilizing only 5% of renewable energy in the energy mix could save the country RM 5 billion (US$ 1.32 billion) over a period of 5 years (Mariyappan, 2000). Presently, renewable energy in Malaysia is still generated in a small-scale basis. However, concerted efforts are currently undertaken by the government to develop and promote the utilization of renewable energy resources. In line with the governments decision to intensify the development of renewable energy as the fth source of fuel, a Small Renewable Energy Power (SREP) Program was launched in May 2001 (KTKM, 2004a). Under this program, small power generating plants which utilizes renewable energy can apply to sell electricity to Tenaga Nasional Berhad (main utility of energy generation in Malaysia). Each of this power generating plants will be given a license for a period of 21 years to provide up to a maximum of 10 MW into the national distribution grid system. These power plants are only allowed to utilize all types of renewable sources such as biomass, solar, minihydro and wind as the source of fuel. Up to now, 59 applicants have been approved under the SREP with a total energy generating capacity of 352 MW (Kam, 2004). Among the various sources of renewable energy, biomass seems to be a very promising option for

Malaysia. In line with the promotion of using biomass energy, a Biomass Power Generation & Cogeneration Project (BioGen) was commissioned in October 2002. The project was jointly funded by the Government of Malaysia, United Nations Development Program, Global Environment Facility and the Malaysian private sectors. The main objective of this project was to reduce the growth rate of green house gas emission from fossil fuel red combustion processes. Apart from that, the other main objectives of BioGen is to reduce the un-used waste residue from palm oil and to catalyze wider adoption of grid-connected biomass-based power generation and cogeneration (PTM, 2004a). All these objectives can be achieved by utilizing biomass waste for power generating. Furthermore, it was reported that the productions of energy from agricultural wastes seems to be very attractive based on bio-resource sustainability, environmental quality and economic consideration (Tsai et al., 2004). To kick start off this program, the government targeted on the residues from palm oil mill industries. Other biomass source from the agricultural industries included wood, sugar cane and paddy. Being the largest palm oil producer in the world, Malaysia has approximately 362 palm oil mills, processing 71.3 million tones of fresh fruit bunch per year, producing an estimated of 19 million tones of crop residue per year in the form of empty fruit bunch, ber and shell. Table 2 shows the caloric values and moisture content of these residues. Based on this gures and a thermal efciency at 25%, it was estimated that 2059 MW of power can produced annually (1282 MW in Peninsular Malaysia and 777 MW in East Malaysia) (PTM, 2004b). Currently, 22 out of the 59 participants for the Small Renewable Energy Power (SREP) Program (as mentioned earlier) are using residues from palm oil waste industries as the source of fuel. Nevertheless, it is noted here that the use of biomass as a source of energy requires a complex series of stages that includes a continuous supply of biomass, drying, storing and gasication technology for producing energy (Mitchell and Connor, 2004). Among these stages, ensuring sufcient continuous supply of biomass seems to be the biggest challenge of utilizing biomass in Malaysia. Although the use of renewable energy resources has a lot of benets, it faces numerous challenges. Firstly, the development of technology to convert the renewable

Table 2 Caloric values and moisture content of palm oil residues Residue Empty fruit bunch Fiber Shell Caloric value (kJ/kg) 6028 11,344 18,836 Moisture content (%) 60 40 20

Source: PTM (2004b).

ARTICLE IN PRESS
A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 2393

energy resources into usable forms is still not that established. Although it was reported by several research and studies that there is a technical feasibility in the generation of energy from renewable resources, but the commercialization of research ndings has not been fully undertaken on a large scale. Secondly, the high cost of renewable energy generation faces stiff competition from cheaper alternative energy such as from fossil fuels. For instance, the electricity costs from biomass, geothermal and solar sources are within the range of US$ 725 cents/ kWh, compared to the conventional (coal, natural gas, etc.) electricity costs of US$ 46 cents/kWh (Hitam, 1999). The relatively higher costs of energy generation from renewable resources, both in terms of investment costs and nal energy costs make the generation of energy from renewable resources economically unattractive. Thus, this economical factor further restrain the efforts to promote the utilization of renewable energy. Another challenge facing the wider utilization of renewable energy is the lack of reliable information on the potential supply of renewable energy at the national level. For instance, the availability of biomass is not easy to be computed and obtained, as the amount of waste materials, such as wood residues, palm oil waste and agricultural waste, is seldom documented by the waste generating entities as well as by the relevant government agencies. Apart from that, the low demand for energy from renewable resources is also hindering the utilization of renewable energy. This is due to the weak public awareness on the positive benets of renewable energy as compared to non-renewable energy. Furthermore, the relatively high cost of renewable energy compared to conventional energy may discourage the public from utilizing renewable energy. These are among some of the practical issues that need to be addressed in detail before a wider utilization of renewable energy can be expected in Malaysia (Hitam, 1999).

conditions are favorable for the development of solar energy due to the abundant sunshine throughout the year. The solar radiation in Malaysia ranges from 6.5 kwh/m2 in the months of January and drops lower to 6.0 kwh/m2 in the months of August (Mariyappan, 2000). A PV system consists of several solar cells that convert light energy into electricity. Photovoltaic are an elegant means of producing electricity on site, directly from the sun, without concern for fuel supply or environmental impact. Solar power is produced silently with minimum maintenance, no pollution and no depletion of resources. Photovoltaic system are also exceedingly versatile and can be used to pump water, grind grain and provide communications and village electrication in situations where no electricity is available (PTM, 2004c). At the moment, the utilization of solar power or PV system in Malaysia is only limited to solar water heating systems in hotels, small food and beverage industries and upper middle class urban homes. It was estimated that there are more than 10,000 units of domestic hot system using PV system at the moment in Malaysia (KTKM, 2004b). Although PV system has tremendous potential, especially for remote areas in Malaysia, the cost of PV panels and technology is still too expensive for mass power generation. In order to reduce the cost of PV system, Malaysian Energy Center (PTM) embarked on a project named Malaysian Building Integrated Photovoltaic (MBIPV). The aim of the project was to incorporate PV system into the design of the building and become the main-stream of power production for the building. However, a cost reduction of 20% is required before PV system can become a viable source of energy as compared to the energy produced from fossil fuels or natural gas (Kam, 2004). 4.2. Hydrogen fuel cells Recently, hydrogen fuel cells have emerged as one of the most promising technologies as a source of energy in the future. Hydrogen fuel cell is an electrochemical device that combines hydrogen with oxygen to make water plus electricity without combustion. The water formed can then be brokendown back to hydrogen and oxygen via electrolysis. In principle, a fuel cell operates like a battery. However, unlike battery, a fuel cell does not run out down or require recharging. It will produce energy in the form of electricity as long as fuel is supplied. Fuel cells can promote energy diversity and a transition to renewable energy sources (KTKM, 2004c). Hydrogen (H2), being the most abundant element on earth, is an ideal source of fuel for fuel cells.
(footnote continued) solar power used in Malaysia is currently by individuals at domestic level instead of large-scale production for commercial use.

4. Alternative energy Apart from the ve main sources of energy featured in the Five-Fuel Diversication Strategy, the government of Malaysia has always been looking into the possibilities of utilizing other sources of alternative energy such as solar, hydrogen fuel cells, landll gas and incineration from municipal solid waste. 4.1. Solar1 Malaysia solar power or also known as photovoltaic (PV) system is estimated to be four times the world fossil fuel resources (Hitam, 1999). In Malaysia, the climatic
In this paper, solar power is introduced as a separate category instead of a sub-category of renewable energy because most of the
1

ARTICLE IN PRESS
2394 A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 Table 3 Composition of MSW in Malaysia Item Paper & cardboard Plastic Wood/grass/others Metal Glass Food & yard wastes Textiles Ash/soil Source: WIIAD (1996). Weight (%) 11.7 7.0 6.5 6.4 2.5 63.7 1.3 0.9

Unfortunately, hydrogen does not occur naturally and thus the extraction and production methods of hydrogen are very expensive. Currently, hydrogen is produced commercially by dehydrogenation from methane (CH4). Another alternative source of hydrogen would be by breaking water molecules into hydrogen and oxygen using electrolysis. However, this process requires a lot of energy and thus by principle, the hydrogen produce using this method cannot be considered as a source of energy but rather just a transformation of energy into another carrier. Apart from that, hydrogen is also incredibly explosive. In fact it is more explosive than natural gas. Thus its use is only limited to experimental needs. At the moment, multi-million dollar research and development is being carried out around the world to nd the best way to harness the gas (H2) as fuel in fuel cells. In Malaysia, a task force under the Malaysia Energy Center was set up to determine the road map for the next 20 years on hydrogen utilization in fuel cell. Effort is being made to produce hydrogen from solar hydrolysis. 4.3. Landll gas Municipal solid waste contains signicant portions or organic materials that produce a variety of gaseous products when dumped, compacted and covered in landlls. Anaerobic bacteria thrives in the oxygen-free environment, resulting in the decomposition of the organic materials and the production of primarily carbon dioxide (CO2) and methane (CH4). Carbon dioxide is likely to leach out of the landll because it is soluble in water. Methane, on the other hand, which is less soluble in water and lighter than air, is likely to migrate out of the landll site and is vented to the atmosphere. Landll gas energy facilities will capture the methane (the principal component of natural gas) and combust it for energy (Carlin, 2004). Malaysia is currently planning an energy plant using landll gas system in Puchong, Selangor. The landll gas system is expected to generate about 2 kW of electricity, and up to 5 MW in the future plant expansion (GE Energy, 2003). 4.4. Incineration of municipal solid waste (MSW) Incineration of municipal solid waste (MSW) is another alternative method of producing energy from waste. MSW is made up of a wide variety of organic (combustible) and non-organic (non-combustible) products ranging in size and composition from dust particles to old furniture and appliances. The average composition of MSW in Malaysia is shown in Table 3 (WIIAD, 1996). The actual composition of MSW in Malaysia varies from one place to the other. Among some of the factors that might inuence the composition of MSW produced

in a specic location are the extent of reduction, reuse and recycling (3Rs) programs and also the duration of year. The percentage of combustible material in MSW usually averages about 75%, but varies with the time of the year. Similarly, the moisture content of MSW is also a factor of season and weather conditions. The energy content of typical raw MSW is about 10,000 kJ/kg. Malaysia has started considering incineration technology and its impact on the environment mainly to reduce the volume of MSW produced in the country. Secondary aim is to produce energy from the incineration process. However, incineration of MSW is a very sensitive issue particularly on environmental concern about the harmful emission of air pollutants such as acid gases, toxic heavy metals, dioxins and furans. Fluidized bed gasication technology and ash melting system are currently being tested in a location at Broga, Selangor, Malaysia. 4.5. Nuclear Currently, Malaysia has no nuclear power generation plant and there is also no plan to embark on a nuclear power program in the foreseeable future. The only nuclear reactor available in the country is a 1 MW thermal research reactor owned and operated by MINT (Malaysian Institute for Nuclear Technology Research) (MINT, 2002). As mentioned earlier, Malaysia is current adopting the Five-Fuel Diversication Strategy which calls for the utilization of natural gas, coal, oil, hydro and renewable energy. Malaysia is also not expected to include nuclear power in its energy mix in the foreseeable future. Nevertheless, MINT stills keep abreast with the developments of nuclear power. MINT, together with TNB (Tenaga Nasional Berhad) has been continuously reviewing the prospect of including nuclear power in the energy mix for Malaysia. Such a continuing interest and periodic review was found to be necessary, according to the Ministry of Energy, Communications and Multimedia (MINT, 2002). Recognizing the need for early and adequate preparations should a nuclear power program be considered

ARTICLE IN PRESS
A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 2395

necessary, MINT and TNB, in cooperation with more than a dozen other governmental agencies and industrial organizations, had conducted a series of studies to systematically examine the possible role of nuclear power in Malaysia and to evaluate and assess the national state-of-preparedness for a possible implementation of such a program in the future. The purpose of these studies was to assemble a better and stronger information base to enable well-founded decisions to be made at the appropriate time, if and when Malaysia decides to go for nuclear power generation (MINT, 2002).

5. Energy efciency Apart from promoting the use of renewable energy and alternative energy to ensure the sustainability of energy supply and consequently of the countrys sustainable economic development, the government of Malaysia has also been implementing the energy efciency program. Energy efciency covers the efciency of power generation, transmission and distribution of electricity and various end-uses of energy. In the 7th Malaysia Plan (19962000), energy efciency and regulations requiring energy management of controlled installations, appointment and duties of energy efciency ofcers, approval and labeling of certain energy consuming products and scheduled products were mentioned but these have yet to be nalized (Mariyappan, 2000). The main target group for the implementation of energy efciency activities is the industrial sector targeting eight energy intensive manufacturing subsectors namely wood, food, glass, cement, rubber, pulp & paper, iron & steel and ceramic (MIEEIP, 2002). It was found that 39.6% of the total nal commercial energy consumption is attributed to the industrial sector in 1998 (Mariyappan, 2000). Under this program, the industrial sectors are taking initiatives to use energy efciently with the support of the government. On the other hand, the Malaysian government is promoting and developing the energy efciency program by committing time and money in energy efciency activities and also with technical and nancial assistance from foreign donors. In order to evaluate the performance of this energy efciency program, energy audits were performed in several companies or industries. Based on 27 energy audits performed in all major industrial sectors, it was concluded that by implementing energy efciency in short-term measures could reduce the energy costs by around 3%. On the other hand, with medium-term measures, another cost saving of 6% could be achieved while improvement of processes would give 8% savings. These percentages of energy savings were comparable with those values

estimated for Japanese industries, whereby implementation of energy efciency improvements could provide energy savings of 1012% for iron & steel, 510% for chemicals, 28% for cement and 618% for paper & pulp industries (Jochem, 2001). Long-term measures involving new technologies and processes seems to be the most promising and protable effort with a more than 25% reduction in energy bill. Considering the fact that the annual electricity costs of a company might reach RM 2700 million, thus the potential savings reported above would be denitely remarkable (Mariyappan, 2000). The latest and largest project in energy efciency is the Malaysian Industrial Energy Efciency Improvement Project (MIEEIP) which is co-funded by domestic sources, Global Environmental Facility (GEF) and United Nation Development Program (UNDP). This 4-year project is implemented under the Ministry of Energy, Communications and Multimedia (MECM) with Malaysia Energy Center (PTM) as the main implementing agent. It was predicted that the nation could save as much as RM 76 million through this energy efciency program (Mariyappan, 2000).

6. Energy policy at the regional level The importance of energy as an element in a sustainable economy was highlighted when energy was given priority at the World Summit on Sustainable Development in August 2002. Without effective energy policies, the environmental and social impacts of the energy sector will cripple attempts to move toward a sustainable development (Spalding-Fecher et al., 2005). The selection and implementation of appropriate energy policies is undeniably a very complex process. Incomplete or asymmetric information, inconsistence and/or poorly dened goals, conicting stakeholder viewpoints and all the various aws of the political process make policy-setting both challenging and imperfect. An effective energy policy should ultimately address the needs and opportunities in the social, environmental and economic dimensions of sustainable development (Komor and Bazilian, 2005). In the recent years, it was found that developed countries like United Kingdom, Sweden and Finland are continuously reviewing their renewable energy policy in order to ensure that their country are moving towards a sustainable energy economy (Ericsson et al., 2004; Tsai and Chou, 2004; Wang, 2004; Winkler, 2005). In that context, other developing countries like Malaysia and all the other developing countries in this region like Indonesia, Thailand and Philippines must also not to be left out in this exercise. However, it is undeniable that most of the governments in this region had taken proactive steps to promote renewable energy in their various energy

ARTICLE IN PRESS
2396 A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 Abdullah, K., 2005. Renewable energy conversion and utilization in ASEAN countries. Energy 30, 119128. BioGen, 2003. Biogen awareness and information session: renewable energy in Malaysiapotential and the way forward. Available at: http://www.ptm.org.my (downloaded 9 September 2004). Carlin, J., 2004. Landll gas. Available at: www.eia.doe.gov EIA, 2003. Country analysis briefs: Malaysia. Available at: http://www. eia.doe.gov/emeu/cabs/malaysia.html (downloaded 24 August 2004). Ericsson, K., Huttunen, S., Nilsson, L.J., Svenningsson, P., 2004. Bioenergy policy and market development in Finland and Sweden. Energy Policy 32, 17071721. GE Energy, 2004. GE Jenbacher supplying equipment for alternative energy project in Asia. Available at: www.gepower.com/about/ press/en/2003_press/120903f.htm Hitam, S., 1999. Sustainable energy policy and strategies: a prerequisite for the concerted development and promotion of the renewable energy in Malaysia. Available at: www.epu.jpm.my International Energy Outlook, 2004. World energy and economic outlook. Available at: http://www.eia.doe.gov/oiaf/ieo/world.html (downloaded 30 March 2005). Jochem, E., 2001. World energy assessment: Chapter 6: energy end-use efciency. Available at: http://www.undp.org/seed/eap/activities/ wea/drafts-frame.html (downloaded 30 March 2005). Kam, S., 2004. Looking to the sun and biomass, THE SUN WEEKEND, 78 August. Kataoka, S., 1992. Coal Burning Plant and Emission Control Technologies. Technical Note. World Bank, China Country Department, Washington, DC. Komor, P., Bazilian, M., 2005. Renewable energy policy goals, programs and technologies. Energy Policy 33, 18731881. KTKM (Ministry of Energy, Telecommunications and Multimedia), 2004a. Introduction to small renewable energy power programme (SREP). Available at: www.ktkm.gov.my/print_details.asp?Content_ID=277. KTKM (Ministry of Energy, Telecommunications and Multimedia), 2004b. Solar energy. Available at: www.ktkm.gov.my/print_details.asp?Content_ID=38 KTKM (Ministry of Energy, Telecommunications and Multimedia), 2004c. Fuel cells. Available at: www.ktkm.gov.my/print_details.asp?Content_ID=418 Leo-Moggie, A., 1995. Keynote address. Energy Malaysia 1995 conference: Powering into the 21st century, Kuala Lumpur, Malaysia. Leo-Moggie, A., 1996. Keynote address. Bakun Hydro electric project seminar, Kuala Lumpur, Malaysia. Leo-Moggie, A., 1999. Keynote address. World renewable energy congress 1999, Kuala Lumpur, Malaysia. Leo-Moggie, A., 2001. Keynote address. Malaysia regional forum on energy policy for the new millennium, Kuala Lumpur, Malaysia. Leo-Moggie, A., 2002. Keynote address. Eighth APEC coal ow seminar/nineth APEC clean fossil energy technical seminar/fourth APEC coal trade, investment, liberalization and facilitation workshop, Kuala Lumpur, Malaysia. Mariyappan, K., 2000. Country report from Malaysia: status of renewable energy and energy efciency in Malaysia. Available at: www.isep.or.jp/spena/2000/countryreports/malaysia.htm. Mitchell, C., Connor, P., 2004. Renewable energy policy in the UK 19902003. Energy Policy 32, 19351947. MIEEIP, 2002. Malaysian industrial energy efciency improvement project. Available at: http://www.unescap.org/esd/energy/dialogue/ promoting/egm/2002/A3.pdf (downloaded 31 March 2005) MINT (Malaysian Institute for Nuclear Technology Research), 2002. Nuclear energy option and energy planning in Malaysia. Available at: www.mint.gov.my/policy/p_issue_nuc_energy.htm. Plant Engineering Business, 2004. Hydroelectric dam project, Bakum, Sarawak. Available at: http://yazmiz.blogs.com.gpsmcom/2004/01/ hydroelectric_d.html.

policies. For instance, in Malaysia, renewable energy is included as the fth source of fuel in the energy mix and various programs had been set up to promote the use of renewable energy. On the other hand, in Indonesia, the Ministry of Energy and Mineral Resources had established a special task force to study and formulate action programs which could attract the private sectors in investing their capital to develop renewable energy industries (Abdullah, 2005). However, the future challenge facing these developing nations is to lower down the costs of modern renewable energy resources so that they are competitive as compared to the conventional energy resources. This challenge can be achieved easier by enhancing close cooperation within the developing countries in this region by diverting more funds towards renewable energy development. Close cooperation within the countries in this region is possible because these countries have similar geographical, climatic and economic features. For instance, countries like Malaysia, Indonesia and Thailand has huge resources of biomass from the palm oil industries, and thus a task force can be setup within these countries to develop the generation of renewable energy from the agricultural biomass. With a close cooperation within the countries in this region, renewable energy will then be able to penetrate and compete with the conventional fossil fuel more economically and thus creating a more sustainable energy development.

7. Conclusion The Malaysian energy sector is still heavily dependent on non-renewable fuel such as fossil fuels and natural gas as a source of energy. These non-renewable fuels are nite and gradually depleting and also contribute to the emission of greenhouse gas. While it is recognized that the world, including Malaysia is not ready to displace non-renewable energy with renewable fuels, the implementation of various policies and programs by the government of Malaysia has increased the awareness of the importance of the role of renewable energy in a sustainable energy system. However, non-government agencies and the public will have to take a more proactive step to coordinate, promote and use energy generated based on renewable resources before we can see a wider utilization of renewable energy in Malaysia. Apart from that, close cooperation within the countries in this region can also further promote the use of renewable energy. References
Abdul-Rahman, A., 2003. Issues and challenges of the development of RE in Malaysia. Available at: http://www.ptm.org.my/biogen/ PDF/Articles/DrAnuarISERE170903.pdf (downloaded 9 September 2004).

ARTICLE IN PRESS
A. Rahman Mohamed, K.T. Lee / Energy Policy 34 (2006) 23882397 PTM (Malaysia Energy Centre), 2004a. Biomass power generation & cogeneration project (BioGen). Available at: http://www.ptm.org.my/New_BioGen_Web_II PTM (Malaysia Energy Centre), 2004b. Biomass power generation & cogeneration project (BioGen). Available at: http://www.ptm. org.my/biogen/BIOGEN1/html. PTM (Malaysia Energy Centre), 2004c, Photovoltaics (PV). Available at: http://www.ptm.org.my/BIPV/bipv.htm. Rogner, H.H., Popescu, A., 2001. World energy assessment [Chapter 1: An introduction to energy]. Available at: http://www.undp.org/seed/ eap/activities/wea/drafts-frame.html (downloaded 30 March 2005). Spalding-Fecher, R., Winkler, H., Mwakasonda, S., 2005. Energy and the world summit on sustainable development. Energy Policy 33, 99112. Thaddeus, J., 2002. Complementary roles of natural gas and coal in Malaysia. Eighth APEC coal ow seminar/nineth APEC Clean fossil energy technical seminar/fourth APEC coal trade, investment, liberalization and facilitation workshop, Kuala Lumpur, Malaysia. The World Commissions on Dams, 2000. The report of the world commissions on dams. Available at: http://www.dams.org/report/ (downloaded 29 January 2005). 2397 Tsai, W.T., Chou, Y.H., 2004. An overview of renewable energy utilization from municipal solid waste (MSW) incineration in Taiwan. Renewable & Sustainable Energy Reviews in press, available online 10 December 2004. Tsai, W.T., Chou, Y.H., Chang, Y.M., 2004. Progress in energy utilization from agrowastes in Taiwan. Renewable & Sustainable Energy Reviews 8, 461481. UK Trade & Investment, 2003. Power market in Malaysia. Available at: http://search1.tradepartners.gov.uk/text/energy/malaysia/prole/overview.shtml (downloaded 9 September 2004). Wang, Y., 2004. Renewable electricity in Sweden: an analysis of policy and regulations. Energy Policy in press, available online 13 December 2004. Winkler, H., 2005. Renewable energy policy in South Africa: policy options for renewable electricity. Energy Policy 33, 2738. WIIAD (Winrock International Institute for Agricultural Development), 1996. Mining the urban waste stream for energy: options, technological limitations and lessons from the eld. Available at: www.winrock.org/reep/Publications/mswrpt/MSW2.html. World Employment Report, 2001. National report on the ICT sector in Malaysia. Available at: http://www.bib.ubl.ac.be/cdrom/wer_ lawitie/back/mal_3.htm (downloaded 30 March 2005).