The Green Equilibrium – Boosting the country’s energy policy
Earlier this year, we read that the Prime Minister’s Department’s Economic Planning Unit (UPE) was in the final stages of formulating a new energy policy that is expected to change the landscape of the energy industry in the country. country in the near future. The Malaysian Water and Energy Research Association (Awer) would like to highlight the issues the UPE needs to consider to correct many mistakes made in the past and prevent them from happening again.
First, redundant agencies make it difficult to implement good policies. For example, the Sustainable Energy Development Authority (Seda) grew out of an out-of-office policy and pushed the country’s energy efficiency campaign into the background. The government admitted that the Feed in Tariff (FiT) mechanism was a failure after ignoring our warning as early as 2011 and even after explaining to the minister in charge at the time. To get the ball rolling, the federal government must shut down Seda and its functions can be taken over by the Energy Commission (ST).
Second, the large-scale implementation of energy efficiency at all levels is a must. Typically, huge capital outlays are required to switch to more environmentally friendly energy resources. However, it doesn’t make sense to have an inefficient pattern of consuming direct fuel or derived forms of energy such as electricity or heat. It is essential to ensure that the model of energy consumption evolves towards a more efficient solution through behavioral changes, technological overhaul and modernization.
Companies need to develop their internal human capital to be able to achieve such momentum because it is a more profitable approach. The government must develop case studies, transfer mechanisms and legislation to support such a dynamic through ST.
Efficiency is the major parameter to keep the energy demand curve flatter. 36% of final energy demand for Malaysia in 2018 is used by the transport sector which represents 23,555 kilotons of oil equivalent (ktoe), followed by the industrial sector which represents 29% (19,046 ktoe). Non-energy uses 21% (13,262 ktep), residential and commercial uses 12% (7,773 ktep) and uses in the agricultural sector 2% (1,021 ktep). Thus, there is huge potential for cost reduction and quick environmental realization.
Third, the choice of technological solutions will be a key factor for a more sustainable future. Malaysia should not encourage the use of environmentally damaging technologies in the long term. Some “climate friendly” technologies are derived from environmentally damaging methods such as mining and eventually become scheduled waste (hazardous waste) after their life cycle.
Likewise, many technology owners are trying to bring some of their older versions of technologies into our market to finance the development of their new technologies. Many of the countries where these technology owners come from control the market value by introducing anti-dumping and other control measures en bloc. Therefore, Malaysia should not adopt obsolete technologies and should be aware of the mechanism of “technology as a trade barrier” that may be imposed in the future.
Finally, the type of fuel used by the transportation sector can be a fruit at hand. The government implemented Awer’s suggestion to switch to Euro 4 for gasoline and Euro 5 for diesel many years ago. Unfortunately, due to many requests from industry players, the implementation of the full switch from Euro 2M diesel to Euro 5 diesel is taking far too long. Can the government make it compulsory to sell only Euro 5 diesel by the end of 2021?
Likewise, due to the economy of scale, the price of Euro 5 diesel must be reduced to reflect the market share once it is fully implemented. The complete changeover to Euro 5 is a major contributor to reducing pollution in the transport sector. It will also allow Malaysia to adopt the new WHO global air quality guidelines, which aim to save lives from air pollution.
Policies are central to the future planning of a nation. It should not be used as a profit or project approval tool. The expense of implementing these policies should not come at the expense of the public. Thus, it is essential to have an appropriate cost-benefit analysis and pragmatic solutions.
“You can easily forgive a child who is afraid of the dark; the real tragedy of life is when people are afraid of the light ”. – Plato
This article was written by Piarapakaran S, President of the Association of Water and Energy Research Malaysia (Awer), a non-governmental organization involved in research and development in the fields of water, energy and water. ‘environment.