Educating consumers to be more energy-efficient
Wednesday July 30, 2014
THE oil, gas and energy industry plays a prominent role in the Malaysian economy, contributing about one-fifth of the national Gross Domestic Product (GDP) over the past decade.
The Government’s National Key Economic Areas (NKEA) for the sector places emphasis on building services and manufacturing while retaining incentives to ensure constant production levels, as well as moving into alternative forms of energy, ranging from solar power to electric vehicles.
Collectively, the Entry Point Projects (EPP) for this NKEA, led by the Performance Management and Delivery Unit (Pemandu), are projected to generate a Gross National Income of RM131.4bil and create 52,300 new jobs by 2020.
Among the 13 EPP for the Energy, Green Technology and Water Ministry (KeTTHA), two — “Improving Energy Efficiency” and “Renewable Energy” — are very important areas for the Government to focus on.
KeTTHA secretary-general Datuk Loo Took Gee, who is also a board member of the Sustainable Energy Development Authority, sheds some light on the Government’s direction and goals in achieving the highlighted targets.
Malaysia’s energy usage, which has increased in tandem with the country’s industrialisation. However, the limited supply of fossil fuels coupled with the negative effect of these fuels on the environment have created a need to improve energy efficiency, especially in power and fuel consumption.
“In 2010, my ministry launched the Government Lead by Example (GLBE) initiative to encourage energy-efficient practices within the public sector.
“Since then, we have retrofitted four other government buildings over a two-year period, namely the Finance Ministry, the Economic Planning Unit, the Natural Resources and Environment Ministry, and the Malaysian Administrative Modernisation and Management Planning Unit (Mampu),” she said.
Loo said as a result, the Government managed to achieve significant energy reduction and savings of up to 18.8%, and RM245,000.
“It is very important for the Government to set an example to various industries including other government agencies, the private sector and even the general public on the benefits of energy efficiency,” she explained.
She said other sectors could also enjoy major savings in their energy bills by changing their behaviour, such as switching off the lights when leaving a room as well as changing to energy-efficient electrical appliances.
“Last year we embarked on the Energy Performance Contracting (EPC), where government buildings are allowed to engage energy-savings companies (ESCO) to improve energy efficiency.
Loo stresses the importance of the Government setting a good example to various industries and the general public on the benefits of energy efficiency
“Under this concept of EPC, the cost of investment to implement measures for energy efficiency will be provided by the ESCO while the owner of the building will pay the ESCO from the savings in the electricity bill.
“This type of concession agreement is an effective method to implement energy savings not only in the government sector, but also in the private sector without expanding much capital expenditure upfront,” Loo said.
She said that with clear results from the energy audits, there was definitely a case to scale up energy-efficiency efforts in the country.
This year, the Government has extended the energy efficiency initiative to include the Health Ministry and the Human Resources Ministry.
KeTTHA is also expected to commence energy audits this year at the Domestic Trade, Cooperative and Consumerism Ministry, Youth and Sports Ministry as well as the Agriculture and Agro-Based Industry Ministry.
“The Government has set a 5% reduction target on all utility bills at all government agencies this year as announced in last year’s Budget speech by the Prime Minister.
“This reduction is part of the KPIs for all ministries and KeTTHA will be monitoring and providing quarterly reports to the Cabinet,” she said.
According to Loo, a circular had been issued in 2012 to set the air-conditioning temperature in government buildings at no less than 24°C because studies revealed that a lower temperature results in higher energy usage.
She said further initiatives to change energy consumption behaviour was the introduction of monetary incentives in the form of cash rebates for those who install energy-saving appliances. This was a method that, in the past, had proven to be very effective in changing consumer behaviour and create awareness on investing in energy-saving appliances.
“Apart from the various campaigns and initiatives, we are also looking at a form of enforcement to take energy-inefficient appliances off the shelf through the launch of the Minimum Energy Performance Standard (Meps) that was introduced last year.
“The next step is for the Energy Commission to conduct inspections at shops and remove electrical appliances that do not meet the Meps standard.
“This includes refrigerators, fans, air conditioners, television sets and lamps,” she said.
She said the increase in electricity tariff earlier this year had helped spread the message of being more energy conscious because consumers’ energy-use patterns would directly hit their pockets.
“The tariff hike has had an excellent knock-on effect to educate and create awareness among the public on being energy efficient.
“Despite the hike, 72% of the population were unaffected because their energy usage was below 300kWh a month,” she said, adding that the move was not aimed at burdening the public intentionally.
Loo highlighted that Malaysia was currently a country that used too much energy but if everyone worked together to change their energy usage behaviour, Malaysia could even become an energy exporter.
“Denmark is a great example of this model, a country with limited natural resources.
“By managing its energy usage and getting its citizens to be energy efficient, Denmark not only generates enough energy for its use but has a surplus that is sold to other nations,” she said.
Loo said as fossil fuel supplies around the world were decreasing, the need for alternative energy sources, especially renewable energy, had become paramount after taking into account the recent scare in 2011.
“During a crisis in Iran in 2011, the price of crude oil shot up to an all-time high of USD147 (RM467) per barrel. As most of our energy is supplied from fossil fuel, this put a huge strain on the country’s economy.
“That incident was a wake-up call for nations around the world, including Malaysia, that we needed to find other sources of energy and had since targetted renewable energy as an alternative,” she said.
KeTTHA suggested to the Government to introduce a system where power utility companies such as TNB could purchase electricity from indigenous renewable energy resources under the Feed-In Tariff (FiT) scheme.
FiT is a mechanism under the National Renewable Energy Policy and Action Plan 2010 to catalyse generation of renewable energy, up to 30MW. This mechanism allows renewable energy resources to be sold to power utilities at a fixed premium price for a specific duration.
“The FiT is a viable policy that provides an opportunity for people from all walks of life to make conscious efforts to move towards a cleaner form of electricity generation, thus creating a sustainable environment,” said Loo.
At the moment, renewable energy resources eligible under the FiT scheme are solar photovoltaics, biogas, small-hydro, biomass (solid waste) and geothermal.
Since Jan 1 this year, customers of TNB, Sabah Electricty Sdn Bhd (SESB) and NUR distribution Sdn Bhd (NUR) are required to contribute a 1.6% surcharge to the Renewable Energy (RE) fund, managed by the Sustainable Energy Development Authority Malaysia (Seda). Domestic consumers who use more than 300kWh (equivalent to RM77 in peninsular Malaysia and RM69 in Sabah and Federal Territory of Labuan) of electricity a month are obligated to make the contribution.
Loo however remarked that FiT was not only targeted at big energy manufacturers but also empowered smaller players and the general public to participate in renewable energy development, thereby promoting public engagement in generating clean electricity.
At the end of June this year, the total RE fund disbursed to distribution licencees (including administration fees) amounted to RM149.8mil for 2,363 projects under the FiT that have achieved commercial operation.
Also during the same period, a total of 2,363 applicants with a total capacity of 195.71MW have achieved commercial operations.
The total approved applications as at the end of June 2014 is 4,343, with a capacity of 727.25MW; these projects will achieve commercial operation between 2014 and 2016.
Loo said with the inclusion of Sabah and WP Labuan for the first time under the FiT scheme this year, there has been a huge increase in renewable energy production as she noted the state’s number of RE projects dwarfed the other states.
“The FiT scheme is proven to be a success and one of the most popular policy instruments in promoting and creating renewable energy sources.
“Together with our natural resources such as all-year-round sunshine, I do not see a reason for Malaysia to not be less dependent on fossil fuels and instead rely more on renewable energy,” she added.