Electricity demand, economic growth, and sustainable energy resources in Malaysia

In my previous blog entry, I wrote about the consequences of large dams, such as Malaysia’s Bakun Dam, on social and environment aspects. Essentially, I remarked that Bakun Dam, as a hydroelectric dam, is not a sustainable energy choice because it causes serious, long term, and irreversible destruction to many social and environmental aspects. Moreover, the expected lifespan of the gargantuan Bakun Dam could be shorten from 50 to 30 years if serious buildup of silt (sediments) occurs.

Malaysia: Where to, electricity? (photo from mypalmoil.wordpress.com)

The Malaysian government’s perseverance with the construction of Bakun Dam contradicts the country’s Green Technology policy, launched in mid 2009, which seeks for more sustainable sources and technology development for energy.

That said, however, the construction of Bakun Dam is justified strictly from an economic point of view. Malaysia’s aspirations for higher economic growth to break Malaysia from the so-called “middle-income trap” and to become a developed nation mean much more energy is required.

Malaysia’s consumption of energy increases every year. In 2008, the total energy demand in Malaysia was 522,199 GWh, of which the industrial and transport sectors were the two largest users of energy, accounting more than three-fourths of this total demand. The residential and commercial sector was the third largest user (14%) of energy in Malaysia, and only 1% of the total energy was consumed by the agriculture sector.

The consumption of electricity in Malaysia rises rapidly every year, with an average of 2,533 GWh per year. The electricity consumption, for instance, in 1971 was 3,464 GWh and 94,278 GWh in 2008. By 2020, Malaysia’s electricity consumption is expected to increase by about 30% from its present value to 124,677 GWh.

Malaysia’s electricity consumption (1971-2008)

Moreover, there is a strong relationship between Malaysia’s GDP (Gross Domestic Product) and Malaysia’s electricity consumption. To put it succinctly: high GDP = high economic growth = high production = high energy. For every 1 USD increase in GDP (at year 2000 rate), electricity consumption would increase by 13 Wh.

Strong linear relationship between Malaysia’s electricity consumption and GDP (1971-2008)

At full operation, Bakun Dam would most probably generate 10,512 GWh (50% of its potential capacity, the world average for hydroelectric dams), which means that Bakun Dam could contribute nearly 8.5% of the expected electricity demand by 2020.

Thus, from these projections, Bakun Dam is needed to support Malaysia’s desire for high economic growth. But looking solely from an economic perspective is myopic because Bakun Dam, as stated earlier, is socially and environmentally destructive. But what are the sources of green energy in Malaysia?

Traditionally, Malaysia’s energy sources for electricity are based on a “four-fuel mix” strategy: gas, oil, hydro, and coal. From 1970 to 1980s, oil was relied heavily for electricity generation, but this over-reliance led to rapid depletion oil in Malaysia. But since the mid 1980s, gas and coal are increasingly being relied on for electricity generation. By 2010, for instance, it is estimated that gas and coal would contribute 92% of the sources for electricity generation. Hydro and oil would contribute the rest (7 and 1%, respectively).

Four-fuel mix: sources of electricity in Malaysia (1971-2008) (International Energy Agency. 2010. Energy balances in non-OECD countries. 2010 edition. IEA, Paris)

Recently, the government has started to introduce a “five-fuel mix” strategy with renewable energy as the fifth source for electricity generation. The most promising potential for renewable energy in Malaysia is the biomass and biogas from the oil palm industry. This is not surprising considering that 15% of the total land area of Malaysia is covered by this single crop alone.

Palm oil mill in Malaysia (photo from gopdc-ltd.com)

There are 417 palm oil mills in Malaysia, of which 246 are in Peninsular Malaysia and 117 in Sabah. These mills discard about 30 million tonnes of biomass, including empty fruit bunches (EFB) and other residues (shells and fibers), every year. Every tonne of EFB could potentially produce about 40W of electricity, whereas every tonne of biomass residues (shells and fibers) an average of 148 W.

In addition to these oil palm biomass wastes, palm oil mills also produce about 43 million tonnes of palm oil mill effluent (POME) per year. These effluents, due to anaerobic (oxygen poor) conditions, emit greenhouse gases such as methane (65%) and carbon dioxide (35%). These biogases could be captured for electrical generation, rather than polluting the air and contributing to global warming. The biogases emitted from every tonne of POME could be captured to potentially generate 8 W of electricity.

Empty fruit bunches (EFB) (photo from hishambioproc.blogspot.com)

At Copenhagen Climate Change Conference 2009, Malaysia pledged to reduce the country’s carbon emission by 40% by 2050. Part of this would be achieved by boosting renewables’ contribution to energy from the current 50 MW to 2,000 MW by 2020. This is certainly achievable considering that biomass and biogas from the palm oil mills could potentially contribute over 3,200 MW of electricity per year. This also means that, potentially, Malaysia’s oil palm could contribute about 28,000 GWh or meeting more than one-fifth of Malaysia’s electricity demand by 2020.

However, problems of irregular EFB supply and technology limitations currently hamper full exploitation of oil palm biomass for electrical generation.

Another major contender for renewable energy source is solar radiation. Being near the equator means Malaysia enjoys 12 hours of daylight per day all year round. On average, Malaysia receives 3 kWh per square meter per day from solar radiation.

The Suria 1000 programme is a government-initiated scheme to use photovoltaic solar cells to capture solar radiation for use in residential and commercial sectors. Photovoltaics, unfortunately, suffer from low solar-to-electricity efficiency. On average, photovoltaics have 10% efficiency.

This means photovoltaics would convert captured solar radiation into electricity at a rate of 3 x 0.1 = 0.3 kWh per square meter per day. As stated earlier, Malaysia’s demand in electricity by 2020 would reach 124,677 GWh. So, if we want solar power to contribute 10% of this expected electricity demand, the total land area needed for photovoltaics is: (124,677 x 1000 x 1000 x 0.1) kWh  / (0.3 kWh per square meter x 365 days) = 114 square kilometers.

Malaysia’s total land area is nearly 330,000 square kilometers, so the fraction of land area needed for photovoltaics (114 square kilometers) is only 0.03%. We can further work out that to completely contribute to Malaysia’s electricity demand in 2020 by solar power (100% contribution), the total land area needed for photovoltaics is only 1,140 square kilometers or 0.3% of Malaysia’s total land area.

So, even though solar photovoltaics suffer from low conversion efficiency, the land area needed to capture solar radiation for electricity generation is no more than one-third of 1% of Malaysia’s land area. Moreover, solar photovoltaic cells can be placed on roofs of houses and buildings, so these cells can occupy the same land area as houses and buildings (no additional land area required for photovoltaic cells if they are placed on roofs).

However, photovoltaics are prohibitively expensive at present. It costs about RM22.50 for every 1 kWh of electricity generated per year. This means for photovoltaics to contribute to even 10% of expected electricity demand by Malaysia in 2020, the total cost for photovoltaics would be over RM280 billion!

If Malaysia is willing to spend RM7 billion on Bakun Dam for electricity generation, the cost of photovoltaics must fall to about RM0.50 per 1 kWh of electricity. Possible? This is a fall in cost by a whooping 45 times than the present rate. Although the technology in solar power is progressing fast and cost falling, it is unlikely that solar power can be a major contributor to electricity generation in Malaysia in the short term.

World geothermal regions (from depletedcranium.com/geothermal-power-generation-potential-and-limits)

Geothermal power is another source of renewable energy in Malaysia, but its source is currently untapped. This is unfortunate because Malaysia lies in a geothermal region. Countries like Indonesia and Philippines are already utilizing geothermal as a source of electricity, producing about 1,196 and 1,930 MW, respectively. Recently, a geothermal reservoir was found in Tawau, Sabah, which has the potential to provide up to 67 MW of electricity.

Nuclear energy. Right for Malaysia? (photo from keetsa.com)

And there is of course nuclear energy. Although nuclear is a non-renewable energy, its use to meet Malaysia’s energy demand must be considered. Nuclear energy suffers from a poor reputation, but its safety record is improving. Countries that derives their electricity from nuclear energy such as France, South Korea, Germany, and Japan shows that nuclear energy is a practical and safe solution as well as having very low carbon emission. Nonetheless, building nuclear power stations are very costly (nearly RM10 billion a station) and require lengthy period before these stations could go on-line (about a 10-year preparation).

Other than finding sustainable sources of energy, the Malaysian government is planning to improve energy efficiency and to promote awareness among the public on the importance of energy conservation.

In conclusion, Malaysia faces big challenges ahead to meet the country’s growing demand for energy using sustainable practices. Malaysia can succeed provided there is a concerted effort for increasing the: 1) implementation and management of sustainable energy sources, 2) energy efficiency, and 3) awareness by the Malaysian public on energy issues and a change of lifestyle that has a lower carbon footprint.



    • I got the figures from a scientific journal then plotted the chart. Unfortunately, I misplaced that journal. However, you can use Sciencedirect to search for electricity, gdp and malaysia in that database. I used those keywords to obtain that journal.

  1. Dear Christopher,

    I will be doing a 2-day course in Kualar Lumpur in november about electricity demand-side management. I have been involved in this, on and off, for over 30 years in the Uk electricity industry.

    I was greatly interested in your article ‘Electricity Demand, Economic Growth, etc’ and I would be most grateful if you could allow me to use some of your statistic and graphs in my presentation. It will be the part of the presentation when I discuss ‘The National Imperative’; that is, the need to use demand-side management techniques to avoid costly peaks in electricity demand and how both customers and the Nation cold both benefit.

    Should you allow me to use your data I will, of course, give you a credit on each slide I use it in.

    Regards and best wishes

    Terry Keenan

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