IN its latest budget announcement, the government proposed the increase of existing funding programmes and extension of tax benefits in hopes to drive the adoption of green technology for businesses.
Meanwhile, the introduction of the Corporate Green Power Programme (CGPP) in late 2022, encouraging corporations to participate in the investment for solar photovoltaic (PV) development through the Virtual Power Purchase Agreement mechanism, is also well underway as submissions for the programme’s first instalment streams in.
Still, more needs to be done.
Sprawled across headlines highlights that the country will need investments in renewable energy (RE) to double to achieve its climate goals, and it is essential for these investments to include enabling technologies such as battery energy storage systems (BESS) to work hand in hand with the grid enhancement initiatives undertaken by Tenaga Nasional Bhd.
Within the roadmap, cross-border electricity supply to our neighbouring countries Thailand, Singapore and even Indonesia, has been penned as possibilities to integrate efforts for shared initiatives and drive private investments such as multilateral financial institution participation, bilateral and regional long-term strategies and arrangements.
A sustainable price to pay
Stronger financial incentives have been targeted to address woes about the affordability of adopting RE.
Encouraging corporate participation in upfront investments are prerequisites to achieving long-term energy saving benefits for not just company operations, but also ensures that Malaysia retains its competitiveness in managing global inflation for fuel and energy costs.
As we approach greater adoption for RE, there has never been a better time for RE developers to step up and provide corporations with options that will suit their transition goals and ease their costs, in the long term.
But to get there, procurement of green electricity from renewables must be competitive and reliable, with customised options such as Power Purchase Agreements or self-consumption solutions on the table made available for companies.
The initial investments of developing these alternative energy solutions cannot be avoided, but can be alleviated through public support programmes, including tax initiatives from the government which will offset the costs of adoption and broader programs, such as developing larger sites for the CGPP through the New Enhanced Dispatch Agreement framework.
Being bolder in renewable energy transitions
The additional quota of 630 megawatts (MW) across RE programmes (GCPP is now at a 800MW quota) in Malaysia promises greater consumption of green electricity, and the Malaysian government with its announcements is indeed helping the country head in the right direction.
Amidst optimism towards policies targeting climate change mitigation, considering the resources available for the development of RE infrastructure would be critical in keeping pace with the transition.
What works is that through the recent “Energy Transition Town Hall”, the government recognised and reviewed the implications of its current RE export ban.
Discussions which are ongoing are already suggesting that the ban might be lifted in hopes for greater collaboration between neighbouring countries, especially in green financing and leveraging other sources of green electricity less available in Malaysia.
This would also mark a significant step in vitalising and attracting foreign direct investment into RE projects in Malaysia, which will ultimately aid our goal of reaching net zero emissions by 2050.
Although the country had a head start in rolling out various solar programmes over the years, solar contributes a mere 1.6% of our energy mix, where hydropower technologies account for the bulk of Malaysia’s renewable capacity. We believe through future programmes such as third party-access and BESS, solar would catch up quickly over the next 10 years.
On the brighter side, it is reported that solar PV will be a key technology leading Malaysia’s energy transition in the lead-up to its net-zero ambition. This presents opportunities for global solar developers to enter the market, and for companies to tap into existing green tax incentives.
Glocal renewable energy solutions
Speaking from the point of view as a global RE developer, realising energy solutions projects across geographies has been made possible with cross-border collaboration.
With global experiences and local expertise, RE technologies have improved exponentially over the years.
The quality and advice that local teams are able to deliver have tremendously contributed to the growth of RE transitions and there are talents out there who can be groomed for the betterment of our industry.
As we push our agenda of walking the talk, it is important that we support energy transitions beyond financial support.
Technical vocational training and hiring of specialists are becoming crucial for Malaysia to advance in its transition journey.
By exposing our local talents to global job scopes, we equip them with skills and set high standards that can bring value not only to corporations like ours, but also to the overall RE landscape for Malaysia.
We assure our corporate customers of a full and total adoption of all their sites on high-consistent standards.
Quality is important, especially for a technology which has a system life exceeding 25 years.
Better now than later
Global discourse on energy transition gives us hope. It is only timely that Malaysia reaffirms and renews its pledge of net-zero by 2050.
We cannot emphasise more how the energy transition for Malaysia will require multi-pronged approaches, with close cooperation and collaboration from private and public sectors.
The next 27 years will undoubtedly present greater opportunities and challenges for us, but 2023 will significantly shape our country’s energy transition progress. – The Vibes, March 20, 2023
Niranpal Singh is the managing director of BayWa r.e. Malaysia, a global renewable energy developer
