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  • Renewables
2 November 2018

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  • ASEAN

SINGAPORE – To push more environment-friendly alternatives into the energy mix of economies in the region, a clean energy financing roadmap has been cast during the 36th ASEAN Ministers on Energy Meeting (AMEM) here.

The crafting of the proposed financing framework had been done in collaboration with the International Energy Agency (IEA), a global energy think tank headquartered in Paris.

In an exclusive interview, IEA Executive Fatih Birol said “clean energy financing is showing some good signs in terms of solar power – and still very big in terms of other clean energy technologies.”

He added that such facility is also building up “for natural gas, especially those coming from the United States and Australia; and in this very region many countries are building energy infrastructure such as the Philippines in order to import LNG (liquefied natural gas), which is very good in terms of diversifying energy sources.”

The IEA in particular had drawn up a toolkit on energy investments and financing for ASEAN – it takes the form of an online repository of resources that may be accessed by member-states. Such includes financial tools and templates for legal documents relating to energy infrastructure investments.

Singapore Trade and Industry Minister Chan Chun Sing noted that they have been working closely with the IEA “on energy investment and infrastructure financing to ensure that there is adequate infrastructure to support the region’s growing energy demand, and to make ASEAN an attractive hub for infrastructure development projects.”

In a paper released during the AMEM meeting, it was stipulated that “to enhance regional capabilities in attracting investments and developing sustainable financing models, Singapore and the IEA have co-developed a Capacity Building Roadmap on energy investments and financing for ASEAN.”

The framework will then be shared to Singapore’s peers in the ASEAN region so they could collaboratively mobilize project funding to required energy investments in the region.

“ASEAN’s energy demand is expected to increase by almost two-thirds from 2018 to 2040 as its population grows in tandem with rapid industrialization. At least US$2.7 trillion of cumulative investment would be needed to meet this energy demand and to improve energy access within the region,” the joint Singapore-IEA paper said.

The investment framework for clean energy, it was emphasized, can be optimized “through enhancing expertise in developing conducive regulatory environments and planning for allocation of capital across technologies.”

The paper similarly stipulated the need “to upgrade skills required to assess the financial sustainability of domestic power generation systems, and to mitigate vulnerabilities on investments for power sector.”

At the same time, ASEAN-countries need to be oriented on how to “enhance competency in project financial tools to better assess investment options, financing requirements and project risks.”

It has been similarly propounded that the energy sectors of the region be able to “develop mechanisms and business models for project de-risking and bankability.”

To this end, it was emphasized that there must be a platform “to deepen public-private engagement, including with financial institutions, which could also serve to equip policymakers with knowledge of new and emerging business models to de-risk projects.”

2 November 2018

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  • Malaysia

ABB has won an ASEAN Energy Award for the installation of the first-of-its-kind public EV charging station, supporting the Malaysian government’s efforts to accelerate wider adoption of electric mobility.

ABB`s Terra 53 fast charging station, located in Subang Jaya, Malaysia, reduces typical charging time from 2 hours, using conventional public AC chargers, to around 15 minutes for electric vehicles with storage capacities of approximately 24kWh. The station utilizes electricity generated by a rooftop solar installation at the ABB facility, providing a 100 percent carbon neutral mobility solution. It reflects ABB’s commitment to strengthening the country’s EV ecosystem and to reducing carbon emissions.

ASEAN Secretary General Lim Jock Hoi, presented the award to ABB at the 36th ASEAN Ministers on Energy Meeting, (AMEM) Official Dinner held in Singapore, on October 29, 2018.

Malaysia targets deployment of 100,000 electric cars, 2,000 electric buses and 125,000 charging stations by 2030. The expansion is in line with efforts to reduce dependence on fossil fuel in the transportation sector and to drive down carbon emissions by 45 percent by 2030 in compliance with the Paris climate accord.

“The opportunity for sustainable mobility is immense,” said Frank Muehlon, Managing Director for electric vehicle charging infrastructure at ABB. “Every day, new smarter mobility alternatives are challenging conventional vehicles and the use of fossil fuels. The award recognizes our efforts to take our technology leadership to the next level to find new solutions to catalyze this shift in Malaysia and across the fast developing ASEAN region, whether in cars and buses, trains or ships.”

ABB installed the Terra 53 fast charger last year at its premises in Subang Jaya outside of Kuala Lumpur. It is available daily to EV drivers at zero cost as a ‘drive-thru’ convenience, instead of the traditional approach of using parking bays.

Over 8,000 fast chargers, including high power chargers up to 350 kW, have been installed by ABB across 68 countries, more chargers than any other manufacturer. In addition to Malaysia, the chargers can be found in the region in Singapore, Thailand, Indonesia and the Philippines.

Fortune Magazine recently ranked ABB #8 on its list of companies that are “changing the world” for the advances it has made in e-mobility and EV charging.

ABB received the award as a special submission under the renewable energy category and was amongst over 60 other recipients. The winners were selected based on their projects, which involved innovation or best practices in the field of renewable energy research, development, demonstration, and commercialization. Special focus was given to projects that were relevant to ASEAN Member States in terms of regional interests and cooperation on sustainable energy.

The ASEAN Centre for Energy (aseanenergy.org) is an intergovernmental organization established by Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

ABB (abb.com) is a pioneering technology leader in power grids, electrification products, industrial automation and robotics and motion, serving customers in utilities, industry and transport & infrastructure globally. Continuing a history of innovation spanning more than 130 years, ABB today is writing the future of industrial digitalization with two clear value propositions: bringing electricity from any power plant to any plug and automating industries from natural resources to finished products. As title partner in ABB Formula E, the fully electric international FIA motorsport class, ABB is pushing the boundaries of e-mobility to contribute to a sustainable future. ABB operates in more than 100 countries with about 147,000 employees.

  • Renewables
2 November 2018

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  • ASEAN

SINGAPORE – It is now easier for small producers of solar energy in Singapore to sell “green credits” to buyers keen to offset their carbon footprint.

To link up these buyers and sellers, SP Group has launched a digital marketplace powered by blockchain technology, thus ensuring safe, transparent and fast transactions.

The power utilities firm believes that this is the world’s first blockchain-powered marketplace in renewable energy certificates (REC), a tradable document used to offset the use of non-clean energy.

The initiative was announced on Monday (Oct 29) at the Asean Energy Business Forum at Marina Bay Sands.

For now, only small firms can access the marketplace, but it will open to households by the middle of next year.

SP Group chief digital officer Samuel Tan said: “We are thinking of products that will help our consumers choose sustainability.”

He added: “Through blockchain technology, we enable companies to trade in renewable energy certificates conveniently, seamlessly and securely, helping them achieve greener business operations and meet their sustainability targets.”

Currently, RECs are bought and sold in Singapore through a manually intensive process, where it is hard for small-scale buyers like consumers to find sellers and where prices need to be negotiated between both sides.

The blockchain marketplace will automate the selling and verification process, and make it easier to connect buyers and sellers.

Any clean energy producer in the world that produces 1 megawatt-hour (MWh) of electricity can be issued one REC. This REC not only serves as proof that the electricity is sustainable, but is also a document that can be sold.

The goal of these certificates is to encourage the production of green energy.

As a four-room Housing Board flat uses only about 12 kilowatt-hour (kwh) of electricity a day, SP Group’s blockchain marketplace will allow the trading of RECs in 0.001 units. This will open up the the buying and selling of RECs, nowadays mostly done by large companies, to much smaller players like households.

The online marketplace will also allow interested sellers and buyers to find each other quickly. Local companies that have signed up include property giant City Developments Limited (CDL) and bank DBS.

A CDL spokesman said: “Participating in SP’s blockchain-powered trading of RECs will help CDL to step up efforts to reduce carbon emissions more conveniently, seamlessly and securely.”

The developer said it aims to be powered completely by renewable energy by 2050, and that buying RECs would be one of the strategies it uses towards this goal.

One seller of these certificates here is chemical logistics company Katoen Natie Singapore, which will soon launch Singapore’s largest single unit rooftop solar facility.

A spokesman said: “Katoen Natie will be embarking on a second phase of expansion for our solar energy plant here in Singapore. With the expansion, we are expecting excess capacity that can be traded on the REC platform.”

The marketplace is accessible here:  www.spgroup.com.sg/rec

  • Renewables
2 November 2018

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  • ASEAN
(From left) Asean Secretary-General Lim Jock Hoi, Minister for Trade and Industry Chan Chun Sing and Asean Centre for Energy Executive Director Sanjayan Velautham at the signing of a memorandum of understanding between Asean and the International Renewable Energy Agency on Oct 29, 2018.ST PHOTO: GAVIN FOO

SINGAPORE – Asean has exceeded its energy efficiency goals, reducing its energy intensity by more than 20 per cent in 2016 compared to 2005 levels, well ahead of its 2020 target.

The grouping, which Singapore chairs this year, also said that it would set up green building codes for the entire region, and that it would sign a memorandum of understanding with the International Renewable Energy Agency (Irena).

These were among the several announcements made at the Asean Ministers on Energy Meeting (Amem) on Monday (Oct 29), which was held for the first time together with Singapore International Energy Week.

Minister for Trade and Industry Chan Chun Sing said in his opening speech that holding the two events in the same period was to “facilitate the exchange of ideas between top policymakers and energy industry practitioners”.

“Through stronger collaboration and the sharing of innovative ideas and best practices, we can adopt better ideas to prepare our people, cities and countries to navigate the changing energy landscape.”

Singapore International Energy Week, the annual event that brings together energy industry policymakers and players from around the world, opens on Tuesday (Oct 30).

Mr Chan said on Monday that the Asean energy ministers welcomed the development of green building codes for all countries in the region.

To this end, the Asean Centre for Energy recommended that all member states establish a central body to handle certification and improve coordination between the public and private sector, among other suggestions.

The Asean Centre for Energy will now raise awareness on green codes and building the necessary capabilities in each Asean country to implement the recommendations.

Mr Chan said: “This will enable us to better realise energy savings in the buildings sector, and effectively manage the significant energy demand expected from this sector in the medium term.”

The ministers also gave their support to developing infrastructure for natural gas and liquefied natural gas, a cleaner alternative to coal. They also encouraged the development of Asean’s capability to attract investments and develop sustainable financing models to meet increasing energy demand and improve energy access.

Asean’s memorandum of understanding with Irena will also see both organisations meet regularly to achieve the goal of almost doubling the bloc’s share of renewable energy by 2025, compared with 2016 levels.

Irena will also provide technical support to Asean for green energy planning and technology, and provide the region with tools to support the development and financing of renewable energy projects.

Mr Chan said: “These outcomes showcase the commitment of all 10 Asean countries to deepen regional cooperation and develop mutually beneficial initiatives in the energy space.

“It is important for us to continue working closely together in order to facilitate Asean’s energy transformation to sustain economic growth, generate greater business opportunities and improve lives in the region.”

Sustainable Energy Association of Singapore council member Sanjay Kuttan said that Singapore’s buildings would not be greatly affected by the development of Asean-wide green building codes because the Republic already has “super aggressive” energy efficiency targets for buildings.

“What we’re really going to benefit more from is our companies reaching out to the region and having an influence on other nation’s trajectories and efforts through their expertise.”

Dr Kuttan said: “The region has been talking about deploying renewables for the last decade, and I think that because incumbent politicians and influential conglomerates previously had not been friendly towards renewable energy, there have been political constraints.

“But Monday’s announcements send a signal that governments are now trying to take more concrete steps to signal to the private sector that they should invest in green energy and pave the way for renewable development.

  • Oil & Gas
2 November 2018

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  • Malaysia
  • Vietnam

MISC Berhad (MISC), through its 51 percent-owned joint-venture with PetroVietnam Technical Services Corporation (PTSC) i.e. Malaysia Vietnam Offshore Terminal (L) Limited (“MVOT”) has been awarded a time charter contract by Idemitsu Kosan Co., Ltd. (IKC) for the provision of a Floating, Storage and Offloading Vessel (FSO) in Vietnam. The contract represents the expansion of MISC’s footprint as a leading player in providing offshore solutions in the ASEAN region.

MISC has close to 10 years of experience in Vietnam’s offshore development in a joint venture partnership with PTSC and currently operates two floating assets, namely the FSO Orkid and a Floating Production, Storage and Offloading (FPSO) facility, FPSO Ruby II.

The contract was secured through an international competitive bidding process and marks MISC’s first venture with IKC. Under this contract, which is valued at approximately $176 million, MVOT will be responsible for the engineering, procurement, construction, installation, commissioning, lease and operations of the FSO. Upon its conversion, the FSO will be deployed for the Sao Vang and Dai Nguyet Development Project in Blocks 05-1b and 05-1c, offshore Vietnam and it will be leased for a duration of seven (7) years. The contract and the charter is expected to commence by mid-2020.

MISC’s President / Group Chief Executive Officer, Yee Yang Chien said “We are honored for the trust and opportunity given for us to work together with IKC in the development of Vietnam’s oil & gas industry. With our broad spectrum of energy related maritime solutions and services, be it in energy shipping or offshore solutions, MISC is confident of our ability to serve the various needs of the global oil and gas industry.”

PTSC, a company incorporated in Vietnam, is a member of Vietnam Oil and Gas Group and is primarily involved in the supply of technical services to the oil & gas industry in Vietnam.

IKC, a company incorporated in Japan, is engaged in petroleum refining and manufacture and sale of oil products, manufacture and sale of petrochemical products, and the exploration, development and extraction of petroleum, coal and geothermal resources.

  • Coal
2 November 2018

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  • ASEAN

(Oct 29): Keep pouring money into coal-fired plants and it won’t be just the fuel that’s getting burned.

As much as US$60 billion of coal power assets may be stranded in the next decade across Vietnam, Indonesia and the Philippines, according to a new study by Carbon Tracker, which cited tighter environmental policies and competition from cheaper renewable energy. That analysis is aimed to caution those contemplating new coal plants.

“This is a warning shot to those investors who are standing at the ledge,” said Matt Gray, the head of power and utilities analysis at the London-based not-for-profit think tank, adding it’s easier to stop a new project than shut an existing one. “We think it’s a mistake and may result in costly impairments.”

The findings underscore how quickly advances in renewable energy are changing the power landscape. New wind and solar plants may become cheaper than coal in those countries, which are planning a combined $120 billion in coal investments, by the end of next decade. The analysis is also part of a growing type of advocacy that, instead of focusing on the dire outcomes of climate change, targets investors and financial institutions by forecasting economic risks.

Carbon Tracker has been funded by several groups and charities, including Bloomberg Philanthropies.

New coal plants require billions of dollars in upfront investments that will be paid back over years of selling electricity to homes and businesses. They helped fuel industrial revolutions in Europe and the U.S., and supply the vast majority of electricity in China.

Fastest Growing

And now they’ll be powering Southeast Asia’s economic expansion. Coal is the fastest-growing energy source in the region through 2040, according to the International Energy Agency. That’s due to abundant resources in places like Indonesia, relatively low costs and government policies that prioritize access to reliable and affordable electricity over decarbonization.

Falling renewable costs could unsettle that outlook, according to Gray. New solar plants may become less costly than operating existing coal projects by 2027 in Vietnam, 2028 in Indonesia and 2029 in the Philippines. As more of that cheaper solar and wind generation is added in those countries, coal plants will go idle more often and struggle to generate revenue needed to repay their loans, Gray said.

Companies are already heeding the warning signs, according to Wood Mackenzie Ltd. Beyond the plants already under construction in Malaysia and Vietnam that will boost the region’s coal capacity from about 40 gigawatts to 70 gigawatts when they’re completed, only a handful will be built, coal analyst Pralabh Bhargava said by phone.

‘Better Options’

“There are a lot of plants in the planning stage, but many of them won’t get built because there are better options in the future,” Bhargava said. He estimates renewables capacity will rise to about 100 gigawatts in Southeast Asia in 20 years from 8 gigawatts currently.

Vietnam, Indonesia and the Philippines have signed the 2015 Paris climate agreement, which calls for governments to limit carbon emissions. To help fulfill their commitments, the countries may pass regulations supporting renewable energy or requiring expensive pollution controls on fossil fuel plants, Gray said, accelerating the shift away from coal.

“Renewable generation will continue to get built and cannibalize demand,” Gray said. “That will cause capacity factors of coal plants to decline to the point they become unprofitable to continue to operate.”

 

  • Energy Economy
  • Renewables
2 November 2018

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  • Vietnam
Renewable energy in Việt Nam is expected to grow at 23 per cent annually during 2020-30. — VNA/VNS Photo

HÀ NỘI — Commercial banks are rushing to provide loans for green energy projects amid a wave of investment in the growing industry, dubbed a landmark for the country’s renewable energy outlook.

Vietcombank has recently approved a VNĐ785 billion (US$33.55 million) loan for the BP Solar 1 project, which has total investment capital of VNĐ1.2 trillion with designed output of 46MW in the south central coast province of Ninh Thuận.

The bank last month also signed a contract with the Đại Hải Power Investment and Development SJC to fund its VNĐ1 trillion Srepok Solar 1, which has a designed output of 50MW.

Another bank – HDBank – has so far also planned to set aside up to VNĐ7 trillion for the construction of green energy projects from now to 2020.

Under HDBank’s plans, it will lend to projects which were approved by the Government and reach their commercial operation date before June 30, 2019.

To qualify for the bank’s loans, borrowers must have a minimum equity of VNĐ150 billion and the equity ratio in their projects must be at least 30 per cent of the projects’ total investment capital. The bank also requires that all proceeds from the projects be transferred to the customers’ accounts at HDBank.

VietinBank has recently financed VNĐ1 trillion for the 68.8 MW TTC 01 solar project in the southern province of Tây Ninh. The project has total investment of VNĐ1.6 trillion.

Early this year, two banks – Agribank and Vietnam Development Bank – signed a contract to co-fund the Phong Điền solar power project in the central province of Thừa Thiên Huế.

The Phong Điền project, which has a designed output of 35 MW and total investment cost of VNĐ838 billion, was recently inaugurated after just nine months of construction, becoming the first solar power plant to be put in to operation in the country.

The wave of investment in the renewable energy industry was spurred by the Government’s incentives and the country’s strong potential for solar and wind energy generation. Investors are also racing against time so their projects enjoy the Government’s preferential feed-in tariff (FiT).

According to the Government, only solar energy projects which reach commercial operation dates (COD) before June 30, 2019 qualify to enjoy the FiT of 9.35 US cents per kWh. The deadline for onshore and offshore wind power projects to get the FiT of VNĐ1,928 (8.5 US cents) and VNĐ2,223 (9.8 US cents) per kWh, respectively, is November 1, 2021.

With such prices, if they meet the deadline, renewable power projects will make significant profits as the power retail price currently averages at only VNĐ1,720.65 per kWh (7.54 US cents).

The financial and business information corporation Stoxplus said that foreign and local investors are excited about renewable energy in Việt Nam, which is expected to grow at 23.2 per cent annually during 2020-30.

There are some 245 renewable energy projects in Việt Nam, including wind and solar power as well as biomass electricity, which are being deployed at different stages.If all these projects begin operation, the total capacity of the country’s renewable energy should reach 23.2GW, which is nearly 10 times higher than the target of 2.65GW by 2020 as indicated in the country’s Revised National Master Power Plan VII. — VNS

  • Energy Economy
  • Others
2 November 2018

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  • Malaysia

OCTOBER 29 — This letter is in response to Malay Mail’s article, dated 18 September 2018, titled “Putrajaya says no to nuclear energy, but keen on coal from East Malaysia“.

While it is most admirable that nuclear energy is not being considered anymore in Malaysia, going for conventional energy sources, such as coal, is not the right path for Malaysia. Malaysia should instead focus on the world of opportunities in Energy Efficiency and Renewable Energy to offset the need to build new carbon-based powerplants.

Currently, around the world, these things are happening:

  • 19 global cities around the world has committed that by 2030 all new buildings will be net zero energy.
  • Countries are seriously talking about net zero economy by 2050. i.e. the entire country energy consumption from manufacturing, transportation and building is net zero.
  • California has mandated solar PV on all new residential homes from 2018 onwards. Why? Because over the lifetime of the solar PV, the energy produced is cheaper than carbon-based fuel.

While renewable energy through solar PV is already financially feasible as compared to carbon-based energy, a nation cannot ignore energy efficiency.

This is because the cost of energy efficiency to a nation is well below that of any available renewable energy technology.

The rate of return of energy efficiency far higher than other investments that is available, for example, educating someone to turn off the lights when it is not required, will yield savings to the nation with a net investment of zero, i.e. the economic rate of return is exponential to our nation — because we generated savings with zero investment.

Moreover, the International Energy Agency (IEA) has identified that Energy Efficiency alone has a potential to achieve 80 per cent+ energy savings in buildings.

Let’s consider these business case scenarios of Renewable Energy and Energy Efficiency in Malaysia today:

1. Renewable Energy — Rooftop Solar PV

These are the existing numbers we have on Rooftop Solar PV in Malaysia:

  • Solar PV Current Investment cost: ~RM 4,000 per kWp
  • Minimum Production of Energy in Malaysia: 1,100 kWh/kWp per year
  • Yearly Degradation of Output: less than 1 per cent
  • Average Lifespan: 25 ~ 30 years.
  • Maintenance cost: ~ RM 500 per kWp for new inverter (to convert DC current to AC current) after 12 years. No other maintenance is necessary in our climate.

Without evaluating the time value of money, over 25 years, 1 kWp of solar PV will provide these returns:

  • 24,400 kWh over 25 years.
  • Capital Cost investment: RM 4,500
  • Cost of Electricity from Solar PV over 25 years = RM 0.18 per kWh produced.
  • Current TNB electricity rate to consumers: ~ RM 0.50 per kWh.
  • Current TNB electricity rate from IPP: ~RM 0.25 per kWh.
  • For a home owner it is almost 3x cheaper than buying electricity from TNB!
  • For TNB, it is cheaper for them to produce electricity using solar PV than to purchase from IPP.

When the time value of money is accounted, with a discount rate (inflation rate) of 5 per cent, solar PV is still very interesting. It will provide more money saved in the end than putting that same amount of money in a Fixed Deposit. This is true even assuming a fixed displaced cost of electricity of RM 0.50 per kWh from TNB (fixed — means no increase in electricity tariff over the next 25 years!). Refer to the table below for the lifecycle analysis of 25 years:

The lifecycle analysis showed a Net Present Value (NPV) for Solar PV investment is RM 7,000 over 25 years. The capital cost investment of solar PV is RM 4,500 (RM 4000 at year 0, and RM 500 at year 12). Ignoring the time value of money of RM 500 at year 12 and making a conservative assumption that RM 500 at year 12 was spend at initial setup, the investment in solar PV provided an annual rate of return of 57 per cent [(7,000 — 4,500)/4,500]! Meanwhile, Fixed Deposit from bank is, at most, 4 per cent today!

  • Put RM 4,500 in a Fixed Deposit of 4 per cent. In one year, you get back RM 4500 + RM 180 (interest earned) = RM 4680
  • Put RM 4,500 in solar PV today. The Net Present Value over 25 years of this investment is RM 7,000, (assuming a discount rate of 5 per cent).

In short, if you have RM 4,500 today, it is only logical to invest in solar PV on your roof or find yourself another investment that will give a rate of return of 57 per cent! Furthermore, it does not require further subsidies or fit-in-tariff to make this a financially viable option today. The government only need to provide the education and awareness to the public of this investment potential. Education and awareness allow the public to make informed decision with their money. Finally, the government also need to ensure a fair trade is made between solar PV owner with TNB.

Furthermore, the technological advantages of solar PV are improving year on year:

  • Price of Solar PV is reducing yearly,
  • Efficiency is increasing yearly,
  • Degradation rate of output is reducing yearly, and
  • Lifespan is increasing yearly.

In short, the business case for solar PV today is a no-brainer.

Further advantages of rooftop solar PV for our nation are:

  • Investment for solar PV is made by home owners and bankers. Our government does not need to provide guarantees or soft loan to TNB or other IPPs for new power plants.
  • Connection to TNB grid is simple and near zero-cost, to TNB.
  • In a net zero residential home, TNB will be able to sell solar PV injected into the grid at peak hour rate to large commercial buildings nearby, while residential homes will buy back cheap electricity from TNB at night. I.e. TNB will profit from rate differences between daytime and night-time, with zero capital cost investment, as the solar PV will be invested by home owners. Making profit from zero capital cost has a rate of return of infinity for TNB.

There is no reason for Malaysian government to ignore this opportunity to make Malaysia more sustainable with such amazing rate of return to the nation, while seeking to use coal energy instead!

By adopting the right approach, Malaysian government will not only make Malaysia a more sustainable nation, but also allow millions of homeowners to benefit financially from such an investment. And our government will also retain more money for investment into education and healthcare, instead of spending it on energy subsidy. A win-win scenario for everyone.

2. Energy Efficiency in Buildings

Energy efficiency is always more difficult to address than renewable energy, because the issues are often exponentially more complex than renewable energy. For example, in a Malaysian building scenario, all the heat from the sun, air leakage, equipment, lighting and more need to be extracted using expensive air-conditioning equipment.

Fortunately, a government does not really need to worry about the complexities of energy flow for energy efficiency in our nation. A government role is to create a platform that will encourage entrepreneurship on energy efficiency. In short, government must provide an equal playing field that will reward the best ideas and best technology to emerge from it.

The business case for energy efficiency in buildings is also a no-brainer, today. For new buildings, it is possible to build an energy efficient building at a lower cost than a non-efficient building. The efficiency of building insulation, equipment and lighting energy consumption has improved tremendously in recent years, allowing the air-conditioning system to be sized down by 35 per cent ~ 50 per cent easily. The cost reduction of the air-conditioning system in such a building is more than adequate to pay for the all building features for an energy efficient building.

On existing buildings, it is also possible to conduct energy efficiency and generate savings from zero investment. By addressing the low hanging fruits of better energy management, of making sure energy consuming equipment is switched off when it is not in use, substantial savings can be achieved in 90 per cent+ of buildings in Malaysia. Saving achieved is then used to purchase more efficient equipment for more savings. In short, Energy Efficiency when practiced right is zero cost for infinity rate of return on existing buildings.

More importantly, the business potential of energy efficiency in buildings worldwide is enormous! IEA stated that we have 80 per cent+ of energy efficiency potential in buildings that remain untouched, as shown by the list of articles shown below:

  • The chairman of the IEA Governing Board, Mr. Noe van Hulst, wrote an article titled “The untapped potential of energy efficiency”, in 2017.
  • EnergyStar in USA published this article titled “Untapped Potential of Commercial Buildings: Energy Use and Emissions” in 2016.
  • Recently, Deloitte published a report on Europe, stating, “75 per cent of EU building stock is still energy inefficient. And the rate of building renovation remains very low.”

These are the known key facts on energy consumption in buildings worldwide:

  • Energy Consumption: 17,700,000,000 MWh/year (2013 World’s Building Energy Consumption)
  • @ RM 0.50 per kWh (using Malaysian tariff)
  • = RM 8.85 Trillion per Year!
  • @80 per cent Reduction Potential
  • RM 7 Trillion per Year to be Saved!
  • @ 1 per cent market share = RM 70 Billion industry yearly!

The business case in energy efficiency in building worldwide is a RM7 trillion (US$1.7 trillion) per year industry. The global potential of Energy Efficiency in Buildings is a bigger business opportunity than global smartphone sales today (smartphone sales was US$479 billion in 2017)! Now, why are we (Malaysian), not looking at this business opportunity and instead settle on easy solution of coal energy?

Malaysia do have the technical knowhow to lead in energy efficiency in tropical climate as we have some of the most energy efficient demonstration buildings in tropical climate since 2005. We just need groom this potential to make Malaysia the leading solution provider for tropical climate worldwide.

For Malaysia to tap onto this enormous opportunity, we need to have the right policies in place to create the environment for green entrepreneurship to emerge from it. These are our proposed policies for Malaysia:

  1. Say no to nuclear.
  2. Say no to coal and other carbon-based fuel.
  3. Remove subsidy of energy, water and waste.
    Subsidy is a barrier for green entrepreneurship to emerge because viable business model become unviable due to the subsidy provided. Subsidy should be directed to the poor instead of a blanket subsidy on energy, water and waste that benefited the rich more than the poor. I.e. The rich will use more energy, water and generate more waste than the poor.
  4. Remove laws that hinders the green development.
    For example: 75 per cent maximum demand limit on Solar PV, that limited the amount of solar PV that can be installed by owners. 100 per cent waste water must be directed to Indah Water, limits the ability of green entrepreneurs to tap into waste water to generate biogas and fertiliser. Law on recuperated waste water, even after treatment and proven safe, is not allowed for agriculture use, limits the ability of green entrepreneur to make their business case viable to treat the waste locally and generate income out of it.
  5. Create laws that help green businesses.
    Cost of cleaning up dirty pollution must be factored into the price of waste disposal, carbon emission and ecosystem maintenance. I.e. landfill cost should be priced to cover the cost of repair to the ecosystem, to encourage the people and industry to innovate on reducing, reusing and recycling waste. Also create laws that enforce declaration of energy, water and waste for each premises. This allows entrepreneur to easily identify green business opportunities. Create laws that punish oversizing of air-conditioning system. This ensure that our professionals are not simply oversizing system with unrealistic safety factor, causing lost of income to our nation. Malaysia become less competitive because we spent the money on unnecessary investment in oversized air-conditioning system.
  6. Make information easily available.
    Entrepreneurs need information on energy, water and waste consumption in Malaysia per state, per district, per household. They also need to know how much was spend on these items by each household, each municipal and each state, so that they can come out with innovative solutions that are lower cost and with better efficiency for a feasible sustainable business model to emerge from it.
  7. Provide grants, soft-loan and more to green businesses with high potential.
    These grants must be adequate to offset current subsidy provided on energy, water and waste, to help these businesses to be viable on a level playing field. This will allow viable business model to grow and allow these businesses to be exported worldwide. Successful home grown businesses will attract worldwide funding into our country as we export our technologies and knowhow worldwide (ala Grab, Lazada, etc.).
  8. Create awareness and education to our people.
    It is government role and responsibility to provide education to our future generation on the need to be sustainable. Education need to be provided to the people on the potential business opportunities on RE and EE. Awareness of grants and soft-loan made available to entrepreneurs that will tap into this market by the government should be promoted widely.

We are bounded by natural laws to live a sustainable life on this planet because there is no planet B. Everyone knows there is a looming crisis coming, and yet it is also a business opportunity for Malaysian to tap on, because the rest of the world is also struggling to find a solution to this crisis.

Most importantly, the current environment in Malaysia is perfect for a green solution to emerge from it that will be applicable to many other tropical nations worldwide. The European solution is too dependent on high-end knowhow and workforce. The Singaporean solution is too dependent on an authoritative government. The US will take years to recover from Trumpism, offering Malaysia, a head start on green development. The opportunity is now, to get our policies right to develop Malaysia as the leading nation of sustainable development in tropical climate.

We hope the new government of Malaysia, have the vision to appreciate the economic potential of sustainable development here. It will not only benefit our environment and society, but it will significantly strengthen our national economy as well, if we can get our policies and priorities right. Coal and national cars are a bygone era. Malaysia should not be looking back at these bygone era industries, but instead look forward to a more sustainable future with energy efficiency and renewable energy industry as one of the key driver of Malaysian economy.

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