PR Manifesto: Sustainable?

by Gan Pei Ling / 18 March 2013 © The Nut Graph

THE Pakatan Rakyat (PR) released its manifesto amid much fanfare at its national convention on 25 February 2013. The coalition promises to raise Malaysian household incomes to at least RM4,000 a month, increase the minimum wage to RM1,100 and create one million jobs should it come into power.

On the environmental front, the federal opposition pledges to halt the Lynas rare earth refinery’s operations in Gebeng, Pahang, review a multibillion petrochemical project in Pengerang, Johor, and the mega dams in Sarawak. It targets to reduce traffic congestion in the Klang Valley and other major cities by 50% during its first term via investments in public transport. Furthermore, it says it will reform existing logging laws and activities.

Granted, the manifesto is an improvement from Buku Jingga, the common policy platform the PR unveiled in 2010, which neglected the environment and indigenous rights entirely. But it remains lacking in many areas. What else does the PR need to consider to demonstrate they are able to plan for the future and provide sustainable development if voted into power?

Food security

The PR laid out several measures to reform our economy but completely ignored the agriculture sector in its manifesto. This is problematic as Malaysia has become a net importer of food. The country spent some RM221.8 billion on food imports in the past decade.

We have chosen to specialise in cash crops such as oil palm and rubber at the expense of food crops, according to Professor Dr Fatimah Mohd Arshad from Universiti Putra Malaysia. Nearly 84% of our agricultural land is used for export crops, with oil palm taking the lion’s share of 63.4% in 2005, she pointed out in an article, Global Food Prices: Implication for Food Security in Malaysia, co-written with Anna Awad Abdel Hameed.

Prof Dr Fatimah (Source: crrc.org.my)

Meanwhile, federal allocation for agriculture plunged from 17% of the annual budget in 1990 to 5.8% in 2005, Fatimah and Anna Awad highlighted in their piece published in the Journal of Consumer Research and Resource Centre in 2009. And while the federal government dished out generous cash subsidies to paddy farmers, it left other food sectors out in the cold to develop with minimal support.

With supermarkets easily available around town, living in the city creates an illusion that food supply remains abundant. But the rate of global population growth has long surpassed the rate of agricultural production, Fatimah and Anna Awad noted.  Global food prices will continue to rise as an unpredictable climate further reduces crop yields. Low-income households, who spend the bulk of their income on food, are the most vulnerable to food price hikes.

What will the PR do to reform our agricultural sector and feed Malaysia’s growing population, which is approaching 30 million people, with nutritious, affordable food? What steps will it take to encourage organic farming and sustainable fishing practices? How much will it invest in agricultural research and development? These are just some of the questions the PR needs to deal with.

Renewable energy

Another important sector neglected by the PR in its manifesto is the power industry. Aside from a pledge to scrap independent power producers’ gas subsidies and divert it to lower electricity tariffs, the coalition makes no further mention of the energy sector.

Despite it being a necessity in modern life, some Malaysians, particularly indigenous people and communities living in remote areas, still do not have access to electricity. What will the PR to do ensure every citizen enjoys reliable, affordable power supply?

Datuk Seri Peter Chin (Source: peterchin.my)

Malaysia is expected to become a net oil importer in two years, according to current Energy, Green Technology and Water Minister Datuk Seri Peter Chin. Our country relies largely on gas and coal for power. An overdependence on fossil fuel has resulted in renewable energy sources taking a back seat, the minister conceded in 2012.

In the face of depleting local gas resources, what will the PR do to ensure Malaysia’s energy supply? Will it import more coal? Will it consider nuclear as an option? How much will it invest in renewable energy sources such as solar, biomass or other options?

In addition, the level of Malaysia’s energy consumption versus productivity remains low compared to countries like Singapore and Japan. What innovative measures will the PR implement to cut wastage?

Meaningful public participation

The PR also needs to assure the public that it will hold genuine public consultations before approving major projects. Decades of local governments approving “development” projects without taking into account the existing capacity of roads, drains and other infrastructure has resulted in traffic congestion and flash floods becoming the norm. Coupled with the lack of green spaces, the quality of life in most cities is deteriorating.

Proper public consultation and provision of information will help towards gauging the potential environmental and social impact of a proposed project. It is thus surprising that the PR’s manifesto is silent on the abolition of the Official Secrets Act and the enactment of a Freedom of Information Act (FOIA). Some PR politicians said the manifesto should be read together with the Buku Jingga, which does mention freedom of information. But wasn’t the manifesto built on the Buku Jingga? How is it that the FOIA was excluded?

Comprehensive government

There are many other environmental issues a PR federal government will have to face. For instance, whether controversial projects already in operations, such as the gold mine in Raub and aluminium smelter in Sarawak, will be reviewed; and what to do about the increasing occurrence of flash floods and how to work with our regional neighbours to avoid the yearly haze.

The aluminium smelting plant in Mukah, Sarawak (Source: unireka.com)

The young coalition has been commended by economists for advocating for a clean government. And some may feel that if the PR can implement what’s in their manifesto, it will already be an improvement from the existing Barisan Nasional government. But responsible governance is not just about outdoing your predecessor. It is about governing comprehensively, and thinking long-term. This encompasses what we will eat and how we power our homes.

Should it come into power in the upcoming elections, the PR needs to address these elephants in the room if it is serious about delivering the best to Malaysians.


There are about 100 Green Parties worldwide. Gan Pei Ling recommends that the PR look into their manifestos for bold ideas and inspirations to improve their own.

Environmental “hot potatoes” in 2013

by Gan Pei Ling / 28 January 2013 © The Nut Graph

POLITICIANS today ignore environmental issues at their peril. The year 2012 saw major environmental protests against controversial projects in Malaysia. Thousands protested against the Lynas rare earth refinery, the use of cyanide at a gold mine in Pahang and the multibillion petrochemical complex in Pengerang, Johor. In Sarawak, indigenous peoples reluctant to be uprooted from their ancestral homes to make way for the Murum Dam mounted a blockade at the site for almost a month.

It is heartwarming to witness the rise of resistance from environmental groups towards potentially hazardous mega projects in this country. Our citizens are asserting their rights, and holding governments and corporations accountable to the people and the environment.

Kenyahs, Kayans and Penans protesting on 20 Jan 2013 near the proposed site of the Baram Dam.

With the general election looming, activists will likely ramp up their respective campaigns. What environmental “hot potatoes” will politicians have to deal with carefully this year to avoid public anger and opposition?

Lynas

The Lynas rare earth plant has been a major rallying point for environmental issues. Himpunan Hijau successfully staged several anti-Lynas rallies in 2012. There was a protest in Kuantan in February 2012, a 300km march from Kuantan to Dataran Merdeka in November 2012, and a rally at the refinery’s door step on New Year’s Eve.

It is unlikely the protests will stop there. Despite the opposition, Lynas Corp began production in November 2012 after obtaining the official Temporary Operating License (TOL) from the Atomic Energy Licensing Board (AELB) in September 2012. Federal ministers have repeatedly claimed the company must ship its waste abroad, but Lynas Corp insists there is no such requirement under the TOL.

It remains to be seen whether Lynas will be able to recycle its low-level radioactive waste into safe commercial products. It can also help sooth public concerns by being transparent about its waste management process. As the regulator, the AELB must also play its part to ensure the company deals with its waste safely and responsibly. Many activists, however, are still adamant the plant should be shut.

Sarawak mega dams

Construction work for the 944MW Murum Dam is expected to conclude this year. About 1,400 Penans and Kenyahs will be resettled to Tegulang and Metalun – 46km upstream from the dam.

It may be too late to stop the Murum Dam, but I think campaigners still have a fighting chance to pressure the government to scrap the upcoming Baram Dam. The 1,000MW hydropower project will displace some 20,000 natives currently living in Baram and submerge 412 square km of forests – nearly double the size of Kuala Lumpur.

Indigenous people in the hornbill state formed the Save Sarawak Rivers Network (Save Rivers) in February 2012 to oppose the dams. The activists travelled to Australia last year and successfully pressured state-owned dam operator Hydro Tasmania to stop assisting Sarawak Energy Bhd. Activists have been visiting villages to mobilise the people and Radio Free Sarawak has been disseminating information via its short wave radio.

Baram Valley

The Sarawak government proposes to build a total of 12 mega dams under its Sarawak Corridor of Renewable Energy (SCORE) plan to “transform Sarawak into a developed state” by 2020. However, the Bruno Manser Fund, an international charity, criticised SCORE in its November 2012 report as an “outdated” development plan. A policy paper published by the National University of Singapore in March 2011 also doubted SCORE’s viability.

Sarawak Chief Minister Tan Sri Abdul Taib Mahmud has not bowed to public pressure to halt controversial projects. Nevertheless, the state’s indigenous peoples are increasingly bitter with his administration. They have already lost thousands of hectares of native customary rights land to loggers and plantation companies over the past few decades. Now, their homes are at stake due to the hydroelectric dams. Taib’s administration cannot afford to ignore the growing public dissent if it intends to stay in power.

Pengerang Integrated Petroleum Complex (PIPC)

The PIPC is an ambitious project to turn Pengerang into a petrochemical hub. Petronas is investing RM60 billion to develop the Refinery and Petrochemical Integrated Development (RAPID) project at the complex located at the southern tip of Johor. Some 3,000 residents from seven villagers, mostly fishermen and small-business holders, will have to be relocated to make way for the complex. A protest was held against the Pengerang project on 30 Sept 2012.

Environmentalists are also concerned that KuoKuang Petrochemical Technology Co will revive its controversial project, cancelled by the Taiwanese government in 2011, in Pengerang. A 2010 Chung Hsing University study found that the average lifespan of people living near the petrochemical project may be shortened by 23 days due to pollution. More protests may be in the pipeline if the government allows the Taiwanese company to resurrect its project here.

Moving towards sustainable development

An increasingly discerning electorate coupled with growing environmental awareness means that governments and corporations can no longer get away with sloppy environmental management. Instead of being defensive, the best way forward for the state and businesses is to engage the public proactively and be transparent about the details of the projects.

After all, if the mega projects are truly beneficial to local communities and harmless to the environment, they should be able to withstand public scrutiny, right?


Gan Pei Ling hopes the growing environmental resistance will help push the nation towards a more sustainable development path in the long term.

The doughnut of justice

by Gan Pei Ling / 27 February 2012 © The Nut Graph

ECONOMIC development and jobs or toxic waste and radiation? The Lynas rare earth refinery in Gebeng, Kuantan was granted a temporary operating license by the Atomic Energy Licensing Board on 1 Feb 2012. Lynas claims its company contributes towards “sustainable development” and helps create jobs as rare earth materials are increasingly being used to manufacture green technology products.

But thousands gathered on 26 Feb 2012 to oppose the plant, pointing out that the process of refining rare earths is toxic, which may impact local communities and the environment if not handled properly. This was the case with a plant in Bukit Merah, which left behind radioactive waste.

Thousands gathered for Himpunan Hijau 2.0 to protest the Lynas rare earth refinery in Kuantan, 26 Feb 2012 (© Juana Jaafar)

So, what should take precedence?  Promoting economic growth or preventing toxic waste? Is sustainable development possible? Or must ecosystems and local communities be sacrificed for the general population to achieve economic growth? Is there a way to develop and achieve prosperity while upholding human rights and living within the Earth’s ecological limits?

A safe and just space

Oxfam International senior researcher Kate Raworth has proposed a new framework to think about sustainable development, and it’s shaped like a doughnut.

In her 3 Feb 2012 paper A safe and just space for humanity: Can we live within the doughnut?, Raworth combines two boundaries to provide a framework for sustainable development.

Doughnut of justice (source: grist.org)

The inner boundary consists of the “social foundation” — basic human essentials such as food, water, energy security and gender equality. The doughnut sets a minimum base which must be achieved, below which lies human depravation.

The outer boundary constitutes the “environmental ceiling” of our planet’s nine biophysical systems including the climate, ozone layer, ocean, and freshwater sources. Leading scientists have warned that crossing the critical threshold of these nine areas could lead to drastic and irreversible changes to our environment.

“The space in between the two boundaries — the doughnut — is where inclusive and sustainable economic development takes place,” states Raworth.

Although sustainable development has been talked about since 1987, Raworth’s ideas are noteworthy as she combines two important frameworks — human rights and environmental sustainability.

Duncan Green (source: oxfam.org)

After all, as noted by Oxfam Head of Research Duncan Green, “an environmentally safe space could be compatible with appalling poverty and injustice”. Conversely, surging economic development could lead to devastating environmental effects.

Therefore, it is essential to incorporate both frameworks into the concept of sustainable development.

“Human rights advocates have long focused on the imperative of ensuring every person’s claim to life’s essentials, while ecological economists have highlighted the need to situate the economy within environmental limits.

“The framework brings the two approaches together in a simple, visual way, creating a closed system that is bounded by human rights on the inside and environmental sustainability on the outside,” writes Raworth.

The Oxford economics graduate notes that conventional economic indicators such as GDP growth have failed to take into account the social and environmental impact of economic activities.

“Within this framework, social and environmental stresses are no longer portrayed as economic ‘externalities’. Instead, the planetary and social boundaries are the starting point for assessing how economic activity should take place,” she states.

She adds that our economies should focus on bringing humanity within the doughnut – to eradicate poverty, social inequality and increase human well-being within planetary limits.

“[The doughnut] implies no limit on increasing human well-being; indeed, it is within this safe and just space that humanity has the best chance to thrive,” she thinks.

The doughnut in Malaysia

Raworth (source: oxfam.org)

Raworth’s ideas build on existing ones that take into account other indices besides economics and production to demonstrate well-being. Indicators like the Gross National Happiness Index developed by Bhutan and the Happy Planet Index introduced by UK’s New Economics Foundation have emerged in recent years to measure human well-being and environmental sustainability in development.

But by using Raworth’s doughnut, it becomes clear that Malaysia, with its addiction to mega projects, is still trapped in the old mindset of pursuing “economic growth” per se, causing local communities’ needs and environmental concerns to take a backseat.

In Sarawak for example, the state government said constructing 12 mega dams as part of its Sarawak Corridor of Renewable Energy initiative would spur more economic growth. However, indigenous communities are up in arms as they would be displaced from their ancestral homes and have formed a Save Rivers Network to rally against the dams.

The dams have little to do with the communities who will be displaced. They are expected to power up energy-intensive industries such as aluminium smelting plants and create jobs for locals, or migrants, where the industries would be located.

To apply Raworth’s doughnut, the dams’ construction stresses both the inner social boundary and the outer environmental boundary. While it may create jobs, it would destroy the indigenous communities‘ livelihoods, cultures and heritage, as well as submerge large areas of forests and wildlife habitat.

The Orang Asli community demonstrating during the Himpunan Hijau 2.0 protest (© Juana Jaafar)

If Raworth’s concept were to be applied, the policymakers should weigh heavily the views and needs of the indigenous communities involved. Whether they would benefit from the dam project, for example, by being hired by the industries the dams benefit. And more importantly, whether they have any desire to work in those factories.

Raworth’s inner boundary cites “voice” as one of the social foundations. Policymakers would have to respect indigenous communities’ rights and let them determine the kind of economic, social and cultural development they desire, as recognised under the United Nations Declaration on the Rights of the Indigenous Peoples.

Lynas and the doughnut

Similar considerations need to be made in the Lynas case. Yes, Lynas will create jobs and bring in foreign direct investment. But is this needed to raise the surrounding communities’ social foundation — to provide better income, education, health and jobs — or can this be done through other means?

On the environment side, large amounts of water are needed to process the rare earths ore. Would the water be treated before it is released back to the rivers and ocean? How would it impact local fisheries? And what about the radioactive waste? Will it be stored next to the refinery, since Australia has refused to take it back? What steps are being taken to prevent radiation pollution?

Malaysian policymakers may not have heard of Raworth’s “doughnut of justice” as dubbed by US environmental news portal GristBut what is clear from it is that more questions need to be asked and answered by our authorities to justify their approval of the Lynas refinery. More public consultation should have been done and is still needed. More information is required.

Youth protesting against the Lynas rare earth refinery during Himpunan Hijau 2.0 (© Juana Jaafar)

The same principles need to be applied for other projects that have a significant impact on local communities and the environment, such as whether or not Malaysia will go nuclear in 2013 or early 2014.

We’ve gone past the age of “the government knows best”. Transparency and accountability are essential in any government decision-making processes in sustainable development. As Gristenvironmental writer David Roberts points out when commenting on Raworth’s doughnut, development should no longer focus solely on economic growth, “but what kind of growth and to whose benefit?”


Gan Pei Ling thinks Raworth’s doughnut of justice should be introduced to all policymakers in Malaysia.

Development? Really? For whom?

by Gan Pei Ling / 17 October 2011 © The Nut Graph

MOST of us living in Peninsular Malaysia take electricity for granted as we have hardly experienced a blackout since the 1990s. But how many of us have stopped for a moment to think where the electricity, that allows us to turn on our TVs and computers, comes from?

What are the impacts of the power plants that generate our electricity — be they coal, hydropower and perhaps in the future, nuclear — on the environment and local communities living near these plants?

Coal plant and fishes

Jamaluddin

At a climate and energy forum in Universiti Malaya in Kuala Lumpur on 8 and 9 Oct 2011, Peninsular Inshore Fishermen Action Network president Jamaluddin Mohamad, from Johor, talked about the impact of the Tanjung Bin coal plant.

“They are using chlorine to prevent sea water from corroding the pipes in their power plant. But it is polluting the ocean, and the water that they use to cool the plant is being released back to the sea in high temperature. Our catch has been dwindling over the years,” Jamaluddin told the forum that was jointly organised by Third World Network, Consumers Association of Penang and Sahabat Alam Malaysia.

Run by independent power producer Malakoff Corp Bhd, the 2,100MW Tanjung Bin coal plant was built in 2003. The power producer intends to expand the plant’s capacity by another 1,000MW.

Jamaluddin noted that Tanjung Bin was rapidly developing into an industrial area: “The areas where we can fish are shrinking and becoming increasingly limited.”

He said none of the affected communities are against “development” but the coal plant and rapid industrial development are threatening their livelihoods: “That’s why we’re protesting against the coal plant’s expansion.”

Dams and livelihoods

Across the South China Sea, natives in Sarawak have been displaced by the Bakun dam and more will be displaced by 12 dams the state government is planning to build to boost its power capacity to 7,000MW, over 600% of its 2008 capacity.

Philip Jau

Philip Jau, a Kayan from the Baram valley, said 20,000 people from various communities will be displaced by the Baram dam the Sarawak government intends to build. “This does not include those who are living downstream yet. Up to 38,900 hectares of our native customary land will be submerged. Our land is our life. We cannot live without it. It is as simple as that,” said Philip.

The Baram dam will also cause deforestation and biodiversity loss.

Philip said the communities affected by these dams are establishing a network to create a united movement against what he described as the “damned” dams. “We want electricity but we hope the government will explore other alternatives like micro-hydro, which is more environmentally-friendly, though it may not generate as much profit as building a mega dam,” he said.

Philip said he has been to the Sungai Asap settlement where the affected communities from Bakun were relocated to. “They’re suffering. Most of the villagers feel that they have no future,” said Philip. The communities in Baram do not want to suffer the same fate with good reason.

Of broken promises

The Bakun dam flooded 69,000 hectares of land, around the size of Singapore, and forced the relocation of 10,000 people. Construction began in 1996 and the project eventually cost RM7.5bil.

Wing Mikiu

Wing Mikiu from the Sungai Asap settlement told the forum the Sarawak government only allocated three acres of land to each family that were relocated from Bakun in 1999. “My family has eight children. Three acres of land is not enough for us. We’ve 2,000 new couples in our settlement to date and most of them have no land [to cultivate],” said Wing.

He said the government promised to build the villagers a new town with an airport, jetty, highway and even an international school in the effort to persuade villagers to leave their ancestral homes. But today, many youths have moved to Bintulu or other towns due to the lack of job opportunities in Sungai Asap.

To add insult to injury, Wing said the compensation villagers received for their now submerged native customary lands range from RM0.30 to RM3 million. “If you’re unhappy with the amount, you can bring it to court or complain to the district office, but you’ll have to pay for the cost to resurvey the land yourself,” Wing explained.

“Perhaps the project profited the company and the people in this state [when the dam starts producing energy], but what about us? Our people didn’t enjoy any development as promised, and we’ve lost our land and heritage,” said Wing.

Source of inspiration

Protesting against a coal plant or dam may seem daunting, but local communities can look to Green Surf for inspiration. Since 2007, the coalition has successfully pressured the government three times to cancel plans to build a coal plant in Sabah.

Wong Tack

Wong Tack from the Sabah Environmental Protection Society, which is one of the five environmental organisations in Green Surf, said it was most important for communities to be united. “Locals must take responsibility. If the people are united [in the struggle], then we can solve any problem,” said Wong.

Wong pointed out that it is also crucial to build partnerships with national and international partners. “When the government proposed to build the coal plant for the third time (in Kampung Sinakut in 2009), we knew this could no longer be a Sabah issue.  We had to turn it into an international issue.

“We went to the Parliament and built partnerships with international NGOs (non-governmental organisations) so that the government would have to listen to us, and finally they did,” said Wong. The government scrapped the plan to build a coal plant in Sabah for good in February 2011.

Development? Where?

Those with vested interests in mega projects have a tendency to demonise local communities and environmentalists who oppose such projects as “anti-development”.

But if there’s anything to learn from the stories of community leaders, it is not just about conserving the environment. It is about defending communities’ source of livelihood and preferred way of life so that they can continue to feed, clothe and shelter themselves, and continue to work and fend for their families.

Of course, the government and corporations involved can continue to ignore local communities’ interests and voices. But surely, they do so at their peril? If communities are adversely affected economically by development projects, surely these communities would have nothing else to lose in fighting back.


Gan Pei Ling believes government and businesses must always take into account not just environmental impact but social and economic consequences on local communities when proposing mega projects. If not, they risk earning public outrage.

Going solar and renewable

by Gan Pei Ling / 18 April 2011 © The Nut Graph

Have you ever wanted to install solar panels at your home, but couldn’t afford the capital cost? Once the Renewable Energy Act comes into force, this dream could become a reality.

Passed by the Dewan Rakyat on 4 April 2011, the Act will allow individuals to sell electricity produced from renewable sources like solar photovoltaic at a higher rate than traditional power producers to Tenaga Nasional Berhad (TNB).

This incentive is expected to boost renewable energy industries and its current electricity generation share in the country from under one percent to 11% by 2020. But how will this work? Where will the funds come from? And will home-owning Malaysians be willing to be part of the new system?

Feed-in-tariff

Following the footsteps of pioneering country Germany and our neighbours Thailand and the Philippines, Malaysia will be implementing the feed-in-tariff (FIT) system.

Solar panels (© Raebo | Wiki Commons)

Electricity produced from four types of sources — solar panels, small hydro, biogas and biomass — will benefit from the FIT mechanism under the Renewable Energy Act.

Among these four, residential homes would benefit most from solar photovoltaic as a renewable energy source.

The other three sources — small hydro, biogas and biomass, would be more suitable for implementation by businesses as the capital expenditure could amount to millions. The table below demonstrates the different costs involved in setting up the different sources.

Solar PV Small Hydro Biomass Biogas
Installed capacity 6kW 10MW 10MW 4MW
Expenditure RM90,000 RM90mil RM90mil RM40mil

Source: Adopted from Malaysia Building Integrated Photovoltaic Technology Application Project leader Ahmad Hadri Haris’s March 2011 presentation

 

Going solar at home

Breaking down the numbers: How your 4kW system will pay for itself in around 15 years.

A normal household would usually need about 4kW capacity worth of solar panels, which would cost around RM72,000 to install. That’s about the price of a brand new Toyota Vios.

Too expensive to go green? Think again. Your Toyota Vios’s commercial value will be depreciating at a rate of about 10% a year, but not the income that you would be receiving from installing solar panels on your roof.

Under the FIT system, TNB will sign a 21-year agreement with households and pay at least RM1.49 per kWh electricity generated. Assuming production of 400kWh per month, this would amount to a payout of RM596 per month.

If a household’s electricity bill is RM200 a month, there would still be a steady monthly income of RM396 for the next 21 years, which could be used to repay the loan taken to install the solar panels. The 4kW system would pay for itself and start turning a profit within 15 years.

It is also worth highlighting that one will get paid more under the FIT mechanism if locally-manufactured or assembly solar inverters or photovoltaic modules are used, and/or used as part of building materials.

Granted, the scheme doesn’t bring about huge profits all at once, but I think most middle-class families would now be able to afford to install solar panels should they wish to.

However, it should also be noted that there will be an annual degression rate of 8% for the solar photovoltaic system. In other words, the later one joins the FIT scheme, the lower the FIT rate one will receive. This is based on the assumption that the cost of solar panels would go down once more people adopt it.

The degression rate will be reviewed every three years by the soon-to-be-established Sustainable Energy Development Authority to ensure the rates remain reasonable.

Making renewable energy commercially-viable

Residential homes aside, commercial renewable energy producers are the ones who are set to benefit the most from the FIT mechanism and who seem most excited about the new scheme.

Prior to the Act, TNB paid the same rate of RM0.21per kWh for energy whether or not it was produced from environmentally-friendly resources or from fossil fuel.

Under the FIT scheme, biogas and biomass electricity producers will finally be rewarded for their pioneering efforts and get paid at least 28% more than fossil fuel producers, as shown in the table below.

Biogas Basic FIT rate (RM) Biomass Basic FIT rate (RM)
Up to 4MW 0.32 Up to 10MW 0.31
Up to 10MW 0.30 Up to 20MW 0.29
Up to 30MW 0.28 Up to 30MW 0.27

Source: Renewable Energy Bill

They will be signing a 16-year contract with TNB and enjoy the same competitive rates throughout the period.

In addition, those who use locally-manufactured or assembled gas engine or gastification technology will enjoy a bonus of one sen on top of their basic FIT rate.

Biogas electricity producers who use landfill or sewage gas as a fuel source will further enjoy a bonus of eight sen. Biomass players will enjoy an additional 10 sen for using municipal solid waste as their fuel source.

Already, a 26ha renewable energy park is being built on a remediated landfill in Pajam, Nilai, which would consist of a 2MW biogas plant and 8MW solar power facility, and is expected to generate RM12mil gross national income in 2020.

Meanwhile, small hydro producers enjoy less incentive at RM0.23 to RM0.24 per kWh but their contract with TNB will last for 21 years under the FIT mechanism.

Renewable Energy Fund

The government or TNB will not be forking out its own money to pay the higher FIT rates. The funds will come from consumers. There will be a one percent hike in the current electricity tariff, expected in 2012, the revenue of which will be used to finance the Renewable Energy Fund needed to finance the FIT scheme.

In other words, if your electricity bill is RM200, you will be paying an additional RM2 and that amount will go into the Renewable Energy Fund.

However, the FIT mechanism is not meant to last forever.

It is expected that the cost of producing renewable energy will eventually be cheaper than electricity currently produced by fossil fuel producers. This is also given the fact that current energy prices do not reflect the true cost of production due to subsidies for natural gas and the government-controlled electricity tariff.  Once the cost of renewable energy drops below fossil fuel energy, the Renewable Energy Fund will cease to exist.

At that point, TNB would be able to directly purchase power from renewable energy producers as it would be cheaper than electricity produced from fossil fuel like gas and coal.

(© Indymedia | Wiki Commons)

In the meantime, for the FIT mechanism to be implemented successfully, the government will need to widely publicise the new scheme to home owners and commercial producers and for many to participate in it. Only then will Malaysia be able to increase its renewable energy production to meet and hopefully, surpass its target of 11% by 2020. If Malaysia can push its renewable energy industries forward and make them cost-effective, not only would we be reducing our reliance on fossil fuel and carbon emission, we could even drop the idea of going nuclear, too.


Gan Pei Ling is looking forward to installing solar panels in her own home.