Malaysia’s Natural Resources, Environment and Climate Change Minister, Nik Nazmi Nik Ahmad, is recognized as one of the promising young ministers in the country’s cabinet. Despite not having the loudest voice, Nik Nazmi’s quick grasp of the various sectors falls under his purview. Moreover, his willingness to acknowledge shortcomings and work towards rectifying them instills confidence in his ability to deliver positive changes. An instance of this is the feedback received regarding technical issues related to applications for the Corporate Green Power Programme (CGPP). In response, Nik Nazmi aims to improve the application process, opening it for a full day and evaluating applications on their merits rather than who sent the email first. He also deserves credit for increasing the CGPP quota from 600MW to 800MW and lifting the ban on exporting renewable energy (RE) to Singapore.
In a recent interview, Nik Nazmi discusses several developments and initiatives in the renewable energy (RE) sector. The merger of the energy, natural resources, water, and environment portfolios under one ministry allows for a holistic approach to tackle sustainability, climate change, and energy transition. The ministry has been engaging with industry players, investors, bankers, and non-governmental organizations. One of their focus areas is transitioning towards targeted subsidies for energy, which has been met with some controversy. They have increased tariffs for high and medium-voltage non-domestic consumers and have introduced head sensor charges for the top 1% of domestic consumers. These measures aim to pass market rates to consumers and align with the ambitious 70% RE capacity target by 2050. Initiatives like the CGPP and the Net Energy Metering Scheme are also in place.
Regarding the CGPP, Nik Nazmi explains that the initial limitation of 800MW was to ensure grid readiness and to avoid excessive curtailment of RE, using Vietnam’s experience as an example. However, there is now a concerted effort to push for more RE capacity. The CGPP quota has been raised to 800MW, and the rule prohibiting RE exports to Singapore has been overturned. Nik Nazmi acknowledges the need to sell RE to Singapore while ensuring Malaysia’s own energy needs are met. The surplus generated from premium charges on exports could be reinvested in grid readiness, battery storage, and new technologies.
Improving the national electricity grid’s efficiency, robustness, and capacity to accommodate more RE requires several approaches. First, grid modernization through investments in technologies and infrastructure upgrades is crucial. Smart grids with advanced sensors and automation systems are needed for enhanced monitoring, control, and optimization. AMI, an advanced metering infrastructure, allows real-time energy consumption information, enabling consumers to make choices and participate in demand response programs. Utilities can also manage the grid more efficiently, leading to better load balancing and reduced outage durations. Second, energy storage systems like batteries and pumped hydro storage can improve grid flexibility and stability, especially with increased solar capacity. These storage systems balance the intermittent nature of RE, storing excess energy during off-peak periods and releasing it when renewable generation is low. Third, expanding the grid to cover remote areas with RE potential, such as biomass or mini hydro, is necessary. Clustering plants into one area and extending the grid reach can effectively reach these remote areas. Fourth, integrating the Asean Power Grid will enhance interconnection between regions and countries, enabling RE trading and enhancing supply security. European nations’ interconnections serve as an example of the benefits of diversifying energy sources and incorporating RE.
However, implementing these improvements requires time and significant investments. To avoid burdening lower-income groups, changes should be made in stages and in a sustainable manner. Grid system improvements must be carefully planned and implemented through prioritization.
Nik Nazmi discusses the plan to liberalize the grid and allow third-party access (TPA). While grid ownership liberalization typically refers to opening up the infrastructure to private entities and competition, Malaysia’s case is different. Tenaga Nasional Bhd (TNB), a public-listed company, already operates the grid, and investments and tariffs are regulated by the Energy Commission (EC). However, TPA is necessary to facilitate the green transition. The details of the framework are being worked out, as it is crucial to maintain grid reliability while implementing changes that ensure a more effective and competitive power market.
In summary, Malaysia’s Ministry of Natural Resources, Environment, and Climate Change, headed by Nik Nazmi, is driving positive changes in the RE sector. Their initiatives, such as the CGPP and grid improvements, aim to achieve sustainable energy goals while considering grid readiness, reliability, and competitiveness. By addressing technical issues, increasing RE capacity, and embracing new technologies, Malaysia is moving towards a greener and more sustainable future.
Credit: The Star : Business Feed
