EU-Malaysia Cooperation in Green Technology

ENERGY EFFICIENCY
INITIATIVES IN MALAYSIA
ENERGY COMMISSION

Outline

ENERGY SCENARIO IN MALAYSIA

THE PROJECTION OF ENERGY SUPPLY AND DEMAND

ENERGY EFFICIENCY STRATEGIES AND INITIATIVES

WAY FORWARD

CONCLUSIONS

OVERVIEW OF
ENERGY SCENARIO
IN MALAYSIA

TRENDS IN GDP, PRIMARY ENERGY SUPPLY

AND FINAL ENERGY DEMAND

TRENDS IN ELECTRICITY CONSUMPTION

BY SECTORS

FINAL ENERGY USE BY SECTORS

FINAL ENERGY USE BY TYPE OF FUELS

Fuel Mix In Generation

100 %
Hydro
90 %

Coal
80 %

70 %

60 %

Natural Gas

50 %

40 %

30 %

20 %

Oil
10 %

0%
1980

1992

1996

2000

2004

2008

THE PROJECTION OF
ENERGY SUPPLY AND DEMAND

PRIMARY ENERGY SUPPLY BY FUEL

Coal

Oil

Gas

Hydro

Nuclear

NRE

Electricity Heat

TPESisexpected
togrowatan
annualgrowthrate
of3.6%(2002
2030)

160
140

Sharpincreasein
coalwillcome
fromelectricity
generation
industry

120

Mto e

100
80
60
40

Source: Asia Pacific

Energy Research Centre
(APERC), 2006

20
0
2002

2010

2020

2030

FINAL ENERGY DEMAND BY SECTOR

Industry Transport Commercial Residential

Industrysectorwill
remainthebiggest
energyuser(47%in
2030)followedclosely
bytransportsector
(40%in2030)

100%
80%

Industry sectoris
expectedtobethe
fastestgrowingsector
(4.3%),followedby
transportsector(3.9%),
andresidential
sector(3.1%)overthe
outlookperiod.

Mto e

60%

40%
20%
0%

Source: APERC 2006

2002

2010

2020

2030

FINAL ENERGY DEMAND BY FUEL

Totalfinalenergy
demandisexpectedto
growataannual
growthrateof3.9%
(20022030)

Coal Oil Gas NRE Electricity Heat

120
100

Naturalgasis
expectedtobethe
fastestgrowingenergy
type(5.1%),followed
byelectricity(4.7%),
coal(4.2%)and
oil(3.4%)overthe
outlookperiod;

Mtoe

80
60
40
20

Source: APERC 2006

0
2002

2010

2020

2030

NET IMPORT/EXPORT
Coal

Oil

Gas

Hydro

Nuclear

NRE

Electricity

Heat

100%

Expectedto
becomenet
importerby2020

80%
60%

Percentage

40%
20%
0%
2002

2010

2020

2030

-20%
-40%
-60%
Source: APERC 2006

-80%

STRUCTURE OF ELECTRICITY SUPPLY INDUSTRY

LOSSES

LOSSES
Transmission

Generation

TNB,SESB,Private
Licensees, SESCO,IPPs

Public Licensees, SESCO

Energy Commission (PENINSULAR,

SABAH), Electrical Inspectorate
(SARAWAK)

Distribution
LOSSES

Industry, commercial,
residential and transport.

ENERGY EFFICIENCY
STRATEGIES
& INITIATIVES

EXISTING POLICIES
National Energy Policy
A simple form of energy policy defined in
terms of its objectives

Supply objective is to ensure adequate and secure

energy supply at reasonable prices,
Utilisation objective is to use energy efficiently
and to cut down on wasteful ways of using energy,
and
Environmental objective is that in ensuring the
achievements of the supply and utilisation
objectives, the environment is not degraded
adversely
Fifth Fuel Policy - RE

EXISTING POLICIES
9th MALAYSIAN PLAN (2006-2010) - Chapter 19:
Sustainable Energy Development (Energy Efficiency)
Efficient lighting and air conditioning systems
Energy management systems
Incorporation of EE in Uniform Building By Laws
Local manufacture of EE equipment and
machineries
Courses in learning institutions
EE in public buildings
MIEEIP extension to oleo-chemical, plastic and
textile sectors
Enhancing of fiscal incentivesMarket pricing for
energy
Emphasis on Demand Side Management
Regional (ASEAN) coorporation

NEW POLICIES
Consultant

study is underway to
formulate Energy Policy
Have just formulated a Renewable
Energy Master Plan
In the process of formulating an Energy
Efficiency Master Plan - expected to be
completed by early 2010
RE and EE Master Plan for electricity
sector only

LEGISLATIVE TOOLS

PRESENT LAWS AND REGULATIONS

Existing laws focusing on supply

side(generation, transmission, distribution)
and safety while many elements in demand
side management remain non regulated
areas

Voluntary energy efficiency classification

and ratings have been introduced by
Energy Commission for materials and
electrical equipment which can be adopted
with the introduction of future
laws/regulations

PRESENT LAWS AND REGULATIONS

ENERGY COMMISSION ACT 2001

to promote efficiency, economy and safety in the generation,

production, transmission, distribution supply and use of
electricity

to promote the use of renewable energy and the conservation

of no-renewable energy
ELECTRICITY SUPPLY ACT 1990

to promote the efficient use of electricity

Efficient Use Of Electricity

To determine the standards, specifications, practices and

measures for the efficient use of electricity.

Installation to meet requirements for installation to me

requirements in respect of the efficient use of electricity.

Equipment to meet requirements in respect of the efficient

use of electricity

EFFICIENT MANAGEMENT OF ELECTRICAL

ENERGY REGULATIONS 2008

Effective date 15 December 2008

Key Provisions:

Applied to big energy users

Appointment and notification of Electrical Energy
Manager
Electrical Energy Management Policy
Energy audit
Recommendations for electrical energy
management
Monitoring and keeping of records
Periodical reporting

APPLICATION OF EMEER 2008

Consumers
Any installation which receives electrical energy with a
total electricity consumption equal to or exceeding
3,000,000 kWh as measured at one metering point or
more over any period of six consecutive months; or
Generators for own consumption
Any installation used, worked or operated by a private
installation licensee with a total net electrical energy
generation equal to or exceeding 3,000,000 kWh over
any period of six consecutive months;

FUNCTIONS AND DUTIES OF ELECTRICAL

ENERGY MANAGER

To audit and analyse the total electrical energy

consumption or generation

To advise in developing and implementing measures to

ensure efficient management of electrical energy at
the installation

To monitor effective implementation of the measures

To supervise the keeping of records on efficient

management of electrical energy at the installation and
verify its accuracy; and

To ensure the timely submission of information and

reports under the regulations.

POSSIBLE LAWS AND REGULATIONS

NEEDED FOR EE

Competency (energy managers, auditors, ESCOs)

Standards and labeling for equipment and

appliances-to control the incoming and production
of energy inefficient /non-green products

Promotion and education on EE & EC activities and

technology development.

Funding sources and distribution mechanisms

Establishment of a centralized agency for

implementing and monitoring EE activities.

ECONOMIC TOOLS

FISCAL INCENTIVES
INCENTIVES FOR RE & EE projects and products
(End Users, ESCOs, Importers, local manufacturers)

Until 31 December 2010

The company is required to implement the project within one

(1) year from the date of incentive approval

Implementing Agencies:

MIDA One stop centre for processing

Energy Commission technical evaluation for energy efficiency
projects and products

Green Building Index Certified Building until 2014.

Types of incentives- ITA, PS, STE, IDE

INCENTIVES EE
Companies Providing Energy Conservation Services
(ESCOs)

Pioneer status with income tax exemption of 100% of

statutory income for 10 years; or

Investment tax allowance of 100% on the qualifying capital

expenditure incurred within a period of 5 years. The
allowance to be set-off against 100% of the statutory
income for each year of assessment; and

Import duty and sales tax exemption on energy

conservation equipment that are not produced locally and
sales tax exemption on the purchase of equipment from
local manufacturers.

INCENTIVES EE
Companies Which Incur Capital Expenditure For
Energy Conservation For Own Consumption (End
User)

Investment Tax Allowance of 100% of the

qualifying capital expenditure incurred within 5
years. The allowance to be set-off against 100%
of statutory income for each year of assessment;
and

Import duty and sales tax exemption on energy

conservation equipment that are not produced
locally and sales tax exemption on the purchase
of equipment from local manufacturers

INCENTIVES - RE

Companies Generating RE for Sale

PS with tax exemption of 100% of statutory income for 10
years; or
ITA of 100% for 5 years to be offset against 100% of the
statutory income.

Companies Generating RE for Own Consumption

ITA of 100% for 5 years to be offset against 100% of
statutory income.

Companies Generating RE for Sale/Own Consumption

PS with tax exemption of 100% of statutory income for 10
years for energy sold; or
ITA of 100% for 5 years to be offset against 100% of the
statutory income for the whole project.

AWARENESS
AND PROMOTION

EE PUBLICATIONS

SECTORAL PROGRAMS

High Efficiency Motors Promotion

High Efficiency Refrigerators Promotion

Appliance Energy Efficiency Rating Labeling

Building Energy Efficiency Benchmarking

Green Building Index Rating System for Non

Residential and Residential Buildings

VOLUNTARY EE RATING SYSTEM AND LABELING

EE PERFORMANCE CRITERIA AND RATING SYSTEM

Material/Equipment

Energy Performance Indicator, Rating System

1 Insulation materials

Thermal conductivity, k-value,(W/mK )

2 High Efficiency Motors

EFF 1 type based on European Committee of

Manufacturers of Electrical Machinery and Power
Electronics

3 Lamps (CFL, Fluorescent

Tube, LED)

Efficacy (Lumen/Watt)

4 Ballasts for fluorescent lamps

All ballasts approved by Energy Commission

5 Domestic Air conditioners

Energy Efficiency Ratio,EER (Btu/h/W): STAR Rating

6 Domestic Refrigerators

Energy Efficiency Factor,EEF,(Litre/kWh) ): STAR

Rating

7 Domestic fans

Coefficient of Performance (COP) (m3/min/W) ):

STAR Rating

8 Televisions

Energy Efficiency Index (cm2/kWh) ): STAR Rating

EDUCATIONAL

CETREEE, USM schools, higher learning

institutions
EE & RE topics in secondary school textbooks
Recognition of energy management program
(training/courses) for capacity developmeny
by Energy Commission

EE CODE OF PRACTICE AND GUIDELINES

Involved in newly launched standard ISO

5001:2009, Energy Management SystemsRequirements with guidance for use

MS 1525: 2007 Code of Practice on Energy;

Efficiency and Use of Renewable Energy for
Non-Residential Buildings

EE CODE OF PRACTICE AND GUIDELINES

Guidelines for Electrical Energy Use Equipment :Transformers, Motors, Chillers, Cooling Towers, Fans
and Blowers, Pumps,Air Compressors, Lighting

Guidelines for Thermal Equipment : Boilers and Furnaces,Thermal Oil Heaters,Absorption

Chillers and Heat Recovery equipment,Cogeneration
System

GENERAL AWARENESS PROGRAMMES

Demonstration projects for buildings and industries

EE and RE incentives enhancement

EE/Demand Side Management projects

Development of Energy Service Companies (ESCOs)

Development of energy efficiency guidelines

Building Sector Energy Efficiency Project (BSEEP)

DEMONSTRATION PROJECTS

Low Energy Office (LEO) Building , Ministry of

Energy Green Technology and Water, Putrajaya

Green Energy Office (GEO) Building, National

Green Technology Centre (formerly PTM),
Bangi Selangor

DEMONSTRATION PROJECTTHE NEW ENERGY COMMISSIONS BUILDING

TARGETED BUILDING ENERGY INDEX

FOR ECS BUILDING: 85 kWh/m year
Building Energy Index

Base Building

Proposed Building

140

116

120
108

kWh/m2/year

100

80

60

40

51
39
28
19

20

13
4

0
Cooling Energy

Fan Energy

Lighting Energy
Categories

Plug Load Energy

BARRIERS TO IMPLEMENT EE INITIATIVES

Difficulty in securing EE project funding
Unattractive tariffs for cogeneration and demand side management.
Lack of incentives for utilities to promote demand side management.
Lack of awareness among key decision makers in industry.
Inadequate measures to ensure quality of services provided by energy
service companies.

Fragmented EE programs implementation framework

Fragmented legal and regulatory framework
Relatively low energy prices made EE projects not as attractive.
To be addressed in National EE Master Plan studies and preparation.

WAY FORWARD

Need to address distortion in energy pricing from efficient

use of energy at the demand side

100
90
INDUSTRIAL DIESEL

72% discount

70
60

67% discount

INDUSTRIAL LPG

70% discount

50
40

63% discount

INDUSTRIAL MFO

63% discount

30

53% discount

RM22.06/MMBtu

20
GMSB WEIGHTED AVERAGE TARIFF

RM15.00/MMBtu

RM12.87/MMBtu
RM14.31/MMBtu

10

RM10.50/MMBtu

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RM6.40/MMBtu

GAS PRICE TO POWER SECTOR

Ja
nu

Price (RM/MMBtu)

80

KEY ELEMENTS IN EFFICIENT

USE OF ENERGY

Introduction and implementation of energy

management system at the organizational
level.
Minimum energy performance requirements for
energy using equipment.
Competent persons and energy efficient
solution providers.
On going training and awareness programs.
Introduction of EE laws and centralized EE
agency at the national level.

CONCLUSIONS

Energy Efficiency has been accepted as an

important means towards the use energy in a
sustainable manner
Malaysia has formulated strategies and is
implementing a number of programmes to
promote energy efficiency and renewable
energy in the country.
The government will introduced EE master plan
for effective implementation of EE initiatives
The initiatives will have to be market/
commercially driven

CONTACT US
Demand Side Management
Energy Management Department
ENERGY COMMISSION
13th Floor, Menara TH Perdana
Maju Junction, 1001,Jalan Sultan Ismail
50250 Kuala Lumpur

Tel:03 2612 5400/5536/554

Fax: 03 26912654
Website: www.st.gov.my
E-mail: info@st.gov.my

THANK YOU!

Q&A