Mega Science 2 0: Electrical Electronic Sector

MEGA SCIENCE 2.0 Electrical & Electronics Sector111

MEGA SCIENCE 2.0 Electrical & Electronics Sector 112

MEGA SCIENCE 2.0 Electrical & Electronics SectorCHAPTER 6 MENERGY GENERATION, TRANSMISSION AND DISTRIBUTION EPLAN OF ACTIONS AND ROADMAP: NATIONAL OBJECTIVES PSTRATEGIES, NATIONAL INCENTIVE GUIDELINES, SENERGY EFFICIENCY, RESEARCH AND DEVELOPMENT EINSTITUTES6.1 PURPOSE OF THE ROADMAP programmes and project implementation Client Charter for Energy Sector has been prepared for 3 main parts:The Energy Sector’s main objective is to ensure Energy Policy Planning, Tariff revision andAllocationthe electricity supply is efficient, safe and able to Withdrawal Application under Electricity Industry Trustachieve  expectations, to increase the efficiency of Account (AAIBE).electric energy consumption and avoid electric wastage 6.1.1 ENERGY POLICY PLANNINGwhich is unproductive, to minimise the negative impact Ensure to draw effective energy policies and sustainabledue to supply and use of electric on environment, and to for people, industry, and country to attainment theincrease the electricity supply industry from economic objective of accelerating nation’s status achievementdevelopment aspect and maintain quality of life. industrial. Policies for people involve supplying enough The principal functions of the Energy Division of the reliable electricity. Policies for industry, on the otherMinistry of Energy, Green Technology and Water are hand, involve a steady supply of electricity at competitiveto formulate policies and strategies and undertake prices. Energy policies planning involve aspect ofplanning of the electricity supply industry, to promote electricity supply industry restructuring, renewable powerenergy efficiency and renewable energy, to review tariffs development, and national strategy for energy efficiency.imposed by electricity utilities, to monitor standards ofservice of electricity utilities, to administer the ElectricitySupply Industry Trust Account, and to monitor energy 113

MEGA SCIENCE 2.0 Electrical & Electronics Sector Policy planning for all three aspects above needs 6.2.2 SUFFICIENT SUPPLYdetailed research, and thus, should take into accountcomments from all related agencies. For that, the Forecast demand, right energy pricing and formulateprovision terms of reference, study method and research plans to meet demand;implementation determination should be determined 6.2.3 EFFICIENT SUPPLYwithin a period of six months from the Minister’sapproval period. The comments should also be obtained Promote competition in the electricity supply industry;from stakeholders within one month through various 6.2.4 COST-EFFECTIVE SUPPLYways such as workshop, while the policy draft based onsurvey results and comments from stakeholders should Promote competition and provide indicative supply planbe obtained within two months. The Ministers Board to meet demand based on least cost approach usingMemorandum on policy proposal should be provided power computer software such as WASP;within one month from Minister’s Approval. Finally, the 6.2.5 SUSTAINABLE SUPPLYimplementation ofa policy should take place within onemonth from acceptance a decision (KeTTHA 2013). Promote the development of renewable and co-6.1.2 TARIFF REVISION generation as much as possible;Ensuring every tariff amendment proposal related fuel isprocessed and studied together with Energy Commission 6.2.6 QUALITY SUPPLY (LOW HARMONICS, should take place every six months. Planning and NO SURGES AND SPIKES, MINIMAL Implementation Committee Meeting Electric and Tariff VARIATION IN VOLTAGE)Supply (JPPPET) meetings should be held within twoweeks from comment accession date from Energy Match quality with customer demand with variable tariffs;Commission. Ministers Board Memorandum should 6.2.7 EFFICIENT UTILISATION OF ENERGYbe completed within two weeks from JPPPET date ofmeeting where agreement was obtained. Agencies Benchmarking, auditing, financial and fiscal incentives,involved, namely TNB / SESB, should be informed of technology development, promotion of ESCOs,the Government decision within two days of the decision Labelling, Ratings, correct pricing, energy managers;accession date by the Ministers Board.6.2 NATIONAL OBJECTIVES STRATEGIESTo achieve the national objectives, the Government ispursuing the following strategies:6.2.1 SECURE SUPPLY 6.2.8 MINIMISING NEGATIVE ENVIRONMENTALDiversification of fuel type and sources, technology, IMPACTSmaximised use of indigenous energy resources,adequate reserve capacity to cater for contingencies, Monitor the impacts, improve efficiency of utilisationadequate reserve margin for generation, upgrading and conversion and promote renewable. In pursuittransmission and distribution networks and distributed of the supply objective, policy initiatives, particularlygeneration (islanding); with respect to crude oil and gas, have been aimed at both extending the life of domestic depletable energy 114

MEGA SCIENCE 2.0 Electrical & Electronics Sectorresources, as well as diversification away from oil Amongst the various economic subsectors, thedependence to include other forms of energy sources. electricity subsector has shown the greatest achievement The national depletion policy of 1980 was aimed at in terms of the four fuels policy. Generation fuel mixes insafeguarding the depleting oil reserves. The policy, aimed this subsector for 1990 & 1998 (excluding co-generationat major oil fields of over 400 million barrels of oil initially and private licensed plants) is shown in the followingin place (OIIP), restricted their productions to 1.75% of Table 6.2.OIIP. However, in 1985 the ceiling was revised to 3% inlight of the fact that 1.75% was on the conservative side. Table 6.2 Generation fuel mixes between 1990 andAs a result of this policy, the total production of crude oil 1998 (in ktoe)is currently limited to about 650,000 barrels per day. Assuch, at the current production rate, proven oil reserves FUEL 1990 1998are expected to last another 16 years. Fuel Oil 2,873 2,130 The national depletion policy was later extended Diesel oil 116 275from crude oil to include our natural gas reserves. An Natural gas 1,361 8,886upper limit of 2,000 million standard cubic feet per day Hydropower 915 1,113(mmscfd) has been imposed in Peninsular Malaysia. Coal 813 964At the current rate of production, known natural gas Total 6,078reserves are expected to last for about 70 years. In 13,3681981, the Government adopted the four-fuel strategy,complementing the national depletion policy, aimed at Being too dependent on gas currently, the electricityensuring reliability and security of supply. industry is also expected to increase its utilisation of coal The strategy was, effectively, designed to reduce at the turn of the millennium although the coal option hasthe country’s overdependence on oil as the energy both environmental implications and foreign exchangesource. The strategy aims for a supply mix of oil, implications. This is in line with the four-fuel policy, andgas, hydropower and coal in energy use. As much as the need to cap gas production to allow for longevity.possible, local resources of these fuels will be used to Hydropower development is also being pursued forenhance security of supply (KeTTHA 2013). In 1998, the electricity generation, but the recent economic crisisproportion of the four fuels in power stations was 16% has caused some setback to the planned increase offuel oil, 2% diesel oil, 67% gas, 8% hydropower and 7% hydropower’s share in the country’s energy supply mixcoal. The table below shows a comparison of fuel mix of in the medium term.commercial energy supply between 1990 and 1998 asshown in Table 6.1. The transport sector has been and continues to be the least diversified in terms of fuel use, as it is, it is highly oil Table 6.1 A Comparison of Fuel Mix of Commercial dependent. In 1983, the Government introduced the ‘Go Energy Supply between 1990 and 1998 (in ktoe) Gas’ initiative. This initiative saw limited success despite the sales tax incentives. Except for the limited electric Sectors 1990 1998 train network in the vicinity of the Federal capital, and theIndustrial 5,885 10,121 proposed electric and gas-based transport modes in theTransport 5,387 9,793 proposed Putrajaya Administrative Centre, new policy-Residential & Commercial 1,646 3,314 directed initiatives have been constrained to push orNon-energy 299 2,023 pull the transport sector towards greater diversificationAgriculture 0 307 in fuel use. As in other countries, technology and costsTotal 25,558 continue to be the major constraints in Malaysia to 13,217 achieve the fuel diversification objective in the transport 115

MEGA SCIENCE 2.0 Electrical & Electronics Sectorsector. The Table 6.3 below shows a comparison of 6.3 ENERGY EFFICIENCYfuel mix in the transportation sector in 1982 and 1996 The LEO (Low Energy Office) Building in Putrajaya was(KeTTHA 2013). first occupied in 2004, and building energy management has been practiced since then. The building energy Table 6.3 A Comparison of Fuel Mix in the index in 2005 was 114kWj / m2 / year, but decreased Transportation Sector in 1982 and 1996 to 104kWj / m2 / year in 2006. An energy audit was done on the Block E6 Ministry of Health and Block B6 FUEL 1982 1996 Economic Planning Unit (EPU) of the Prime Minister’sPetroleum Products 100.0 % 99.94% Department buildings in Putrajaya. The audit revealedGas that the energy index of the LEO Building was lower 0% 0.06% than conventional buildings. The MEWC organised two seminars in 2006 to share6.2.9 THE UTILISATION OBJECTIVE the experience of the LEO Building and energy efficiency management, namely “Energy Efficiency in BuildingsTo date, the Government’s approach in materialising – How to Achieve Immediate Savings”, on 24 Januarythis objective is to rely heavily on the energy industry 2006, in Kuala Lumpur; and “MEWC Low Energyas well the consumers to exercise efficiency in energy Office: Lessons Learnt”, on 4 May 2006 in Putrajaya.production, transportation, conversion, utilisation and The seminar on Energy Efficiency in Buildings wasconsumption through the implementation of awareness targeted at Government agencies and departments,programmes.Demand side management initiatives by local authorities, building owners and maintenance,the utilities, particularly through tariff incentives, have and professional bodies in the energy industry. 200had some impact on efficient utilisation and consumption. participants attended the seminar.Furthermore, the Government initiatives to encourage The “MEWC Low Energy Office: Lessons Learnt”co-generation are also aimed at promoting an efficient seminar was attended by 300 people from Governmentmethod for generating heat energy and electricity from a agencies and the private sector. Through programmessingle energy source. as such, the Ministry hopes to increase the effectiveness This also contributes to a reduction in the costs of of energy usage among members of the public. Otherconversion. To enhance the level of achievement of continuous activities implemented under this projectthe Utilisation Objective, the market approach needs to include monitoring the energy usage index on a monthlybe supplemented by the regulatory approach. Towards basis, receiving visitors, and delivering talks andthis end, the energy efficiency regulation is currently preparing brochures on the LEO Building.being formulated and it will be focusing on designation The LEO building won first place in the “Energyof large consumers, appointment of energy managers Efficient Building Best Practices Competition 2006” atand equipment labelling. The Government is conscious the ASEAN level, under the “New and Existing Building”of the need to work with the industry to promote energy category. The award was presented at a specialefficiency in order to reduce inefficient and wasteful ceremony organised on 27 July 2006 in conjunction withuse of energy in industrial facilities. Towards this end, the 24th ASEAN Energy Ministers meeting in Vientiane,a number of industrial energy efficiency initiatives are Lao PDR. The Deputy Minister of Energy, Water andbeing planned, such as an energy auditing programme, Communications received the award on behalf of theenergy service companies support programme and Malaysian (KeTTHA 2013).technology demonstration programme. 116

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.3.1 MALAYSIAN ENERGY EFFICIENCY 6.3.2 CENTRE FOR EDUCATION AND IMPROVEMENT PROGRAMME (MIEEIP) TRAINING IN RENEWABLE ENERGY AND ENERGY EFFICIENCY (CETREE)This project is a continuation of the collaborativeproject between the Malaysian Government, Global This project is a continuation of the centre for educationEnvironmental Facility (GEF) and United Nations and training in renewable energy and energy efficiencyDevelopment Programme (UNDP) with funding from the (CETREE) project that was implemented by theelectricity supply industry through the Electricity Supply Malaysian Government in collaboration with DANIDA,Industry Trust Account (AAIBE). The Ministry of Energy, under the Malaysia-Danish environmental cooperationWater and Communications is the co-coordinator for programme that began in 2000. The purpose of thethis project while the Malaysian Energy Centre is the project is to increase the level of knowledge andimplementation agency. The project has been extended awareness on the role and use of energy efficiency into June 2007 to implement additional activities that have education. Through this project the concept of renewablebeen identified including implementing energy audit on energy and energy efficiency could be absorbed intothree (3) additional energy-intensive sectors, namely curricular activities in schools and universities.plastics, oleo chemicals, and petroleum. From 22 to 24 August 2006, CETREE worked with The energy efficiency and conservation guidelines the Ministry of Education Malaysia to organise threethat were jointly developed with the Energy Commission competitions related to renewable energy and energyand Malaysian Energy Centre were completed in 2006 efficiency, namely solar cars, cooking with solar cookersand scheduled for launch in 2006. The guidelines including renewable energy, and energy efficiencywere intended to provide the industry with a guide beach house. Indoor games were also organised, alongto manage their electricity energy more efficiently with an inaugural exhibition by CETREE. CETREE’sand choose suitable best practices in equipment main exhibition that featured an energy van in a mobileand electrical facility maintenance at their factories/ exhibition was also displayed.premises. Under the energy audit programme, the Apart from that, CETREE also ran energy efficiencyMEEIP team hopes to conduct analysis on the audit campaigns in the local newspapers. The campaigndone by ESCOs (energy services companies) in the was held from 15 December to 19 December 2006.textile and plastics sectors to further increase the It featured information on choosing energy efficiencyefficiency of energy usage in the industry sector. equipment such as refrigerators, air conditioners, irons, electric kettles and lights. Students from schools and The MEEIP’s biggest success in 2006 was the launch public institutes of higher learning from throughoutof the Heveaboard Project on 27 March 2007, by the the country went on learning tours to CETREE. ToDeputy Minister of Energy, Water and Communications. date, 8,260 students and 1,714 teachers and lecturersThe project was an energy-saving project based on have visited CETREE, along with 14,109 members ofEnergy Performance Contracting between an ESCO and the public. CETREE now hosts an interactive websitea factory. Through the project, the factory was able to to disseminate information on energy efficiency andsave RM70,000 on its monthly electricity bill. Apart from renewable energy (KeTTHA 2013).this, the quarterly MEEIP Newsletter was published anddistributed to the industry as another effort to encouragethe efficient use of energy in the industry (KeTTHA2013). 117

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.3.3 THE GOVERNMENT 6.4 ELECTRICITY SUPPLY INDUSTRYPolicy making for the energy sector resides with the The electricity subsector is dominated by three integratedfollowing institutions per Table 6.4. utilities, i.e. TNB serving Peninsular Malaysia, SESB and SESCO. It was complimented by various independent Table 6.4 Policy making for energy sector power producers (IPPs), dedicated power producers and co-generators. INSTITUTIONS  AREAS OF JURISDICTION 6.4.1 TENAGA NASIONAL BERHADPrime Minister’s • Petroleum (oil and gas).Department TNB is a public listed company on the KLSE and was(Economic • Privatisation of the electricity established in 1990 through the corporatisation of thePlanning Unit) supply industry e.g. IPPS. National Electricity Board. (www.tnb.com.my). It is the largest electricity utility in Malaysia. The current totalMinistry of Energy, • Electricity supply industry. installed generation capacity in Peninsular MalaysiaGreen Technology is 17,623 MW; with TNB holding 8,417 MW (46.8%),and Water • Energy efficiency. IPP holding 6,787 MW (38.5%) and another 2,419 MW (13.7%) jointly owned by TNB and Malakoff (via KaparMinistry of Rural • Renewable energy Energy Ventures, KEV). Hence, the Current InstalledDevelopment Generation Capacity – 17,622 MW. • Rural electricity supply. However, gas remains as a major primary energy input for the electricity sector constituting 68%, withThe economic and technical regulatory functions reside 63.8% of the installed generating plants firing on gas.with the following institutions per Table 6.5. Nevertheless, coal is fast gaining significance in the generation fuel mix from 11.1% in 2002 to the presentTable 6.5 Economic and technical regulatory functions 31.1%. Thus, coal, as a primary fuel will gain more significance with the commissioning of the TanjungBin INSTITUTIONS AREAS OF JURISDICTION and Jimah power plants by the IPP within this 9th Electricity in all States except Malaysia Plan period. Hydro contributed 13.8% for 2006Energy Commission Sarawak (technical including safety and oil acting as just standby and back-up fuel. and economic) As part of its strategy to improve efficiency, TNB hasDepartment of Safety in gas sector (at reticulation been undergoing substantial internal restructuring sinceOccupational Health stage). Safety in oil sector 1996 with the formation of many subsidiary companies,& Safety (upstream and downstream). each entrusted with a specialised field of business. ThePrime Minister’s main subsidiaries of TNB are:Department Natural Gas prices.Economic Planning • TNB Generation Sdn BhdUnit Price of petroleum products. • TNB Transmission Sdn BhdMinistry of Domestic Exploitation of coal resources. •    TNB Distribution Sdn Bhd Trade, Co-operatives Licensing on petroleum processing •    TNB Research Sdn BhdAnd Consumerism activities. •    TNB Engineers Sdn BhdState Governments •    University Tenaga NasionalMinistry of •    TNB Engineering and Consultancy Sdn BhdInternational Trade •    TNB Repair and Maintenance Sdn Bhdand Industry 118

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.4.2 SABAH ELECTRICITY SDN BHD (SESB) Table 6.6 IPP in Peninsular MalaysiaSESB was founded on 1 September, 1998 to IPP LOCATION CAPACITY DATE OFtake over the business of electricity supply from (MW) ISSUE OFSabah Electricity Board, a statutory body of the YTL Power Paka, LICENSEFederal Government, which had been supplying Generation Terengganu 808electricity to consumers in Sabah and Labuan. TNB & 404 7 April 1993and the State Government of Sabah own SESB. Segari Pasir6.4.3 SARAWAK ELECTRICITY SUPPLY Energy Gudang, 1,303 15 July 1993 Ventures Sdn Johor 440 CORPORATION (SESCO) Bhd 440 1 DecemberSESCO is a statutory authority established by the State Powertek Lumut, 1993Government of Sarawak. The Sarawak Government has Sdn Bhd Perak 334 1 Decembera 55% ownership and Sarawak Enterprise Corporation Port Dickson 1993Bhd (SECB) holds the remaining 45% shares. SESCO Sdn Bhd Alor Gajah, 720is an integrated utility (d) Northern Utility Resources Pahlawan Melaka 650 26 May 1999(NUR) NUR (www.khtp.com.my) is a dedicated power Power Sdn Tanjung 720producer serving the Kulim High Technology Park in Bhd Gemuk, 640 1 July 1993Kedah, a state which is located in the north of Peninsular Genting Port 350  Malaysia. It has two subsidiary Companies, NUR Sanyen Dickson 2420 26 AugustGenerating involved in electricity generation and NUR Power Sdn Tanjung 2100 1998Distribution which is involved in electricity distribution. Bhd Keling, 2100 7 AugustThe capacity of this dedicated power plant is 450 MW Melaka 1400 2001which is implemented in 2 phases. Kuala 7 August6.4.4 INDEPENDENT POWER PRODUCERS (IPPS) Langat, 2001IPPs in Malaysia generate and sell electricity in bulk to Selangor 20 Februarythe 3 dominant utilities. The IPPs that are in operation 2001are as follows in Tables 6.6 and 6.7: TTPC Perlis 1 July 2004 21 May 1998‘ Panglima Melaka 26 September GB3 Lumut, 2003 Prai Power Perak 22 March KEV Seberang 2005 Janamanjung Prai, Penang Kapar, Klang Lumut, Perak Tanjung Bin Johor Power Jimah Energy Jimah, Port Ventures Dickson 119

MEGA SCIENCE 2.0 Electrical & Electronics Sector Table 6.7 IPP in Sabah 6.5 RESEARCH AND DEVELOPMENT INSTITUTESIPP LOCATION CAPACITY DATE OF The following are several R&D institutions in Malaysia Melawa (MW) ISSUE OF that are involved in both scientific and economic research:ARL Tenaga Tawau LICENSESdn Bhd 6.5.1 GREENTECH MALAYSIA (FORMERLY KNOWNSerudong Karambunai 50 14 June 1994 AS PUSAT TENAGA MALAYSIA (PTM))Power Sdn SandakanBhd 36 31 March PTM is an independent and non-profit organisationPowertron Sandakan 1995 established in May 1998 to fulfil the need for a nationalResources Sepanggar energy research centre in Malaysia. Its core activitiesSdn Bhd Karambunai 190 6 February are energy planning and research, energy efficiency andStratavest 1997 technological research, development and demonstration.Sdn Bhd Their responsibilities also include data gathering. PTMSandakan 64.4 1 October also function as a one-stop energy agency for linkagesPower 1996 with the universities, research institutions, and industriesCorporation other national and international energy organisations.Sdn Bhd 34 29 November The following are its main functions:SBPC 1997 1. Agent for public and private sectorsPowertron II 2. Guardian/repository of a national database 66   3. ‘think-tank’ on energy via consultancy services 190   4. Promoter of national energy efficiency programme 5. Coordinator and lead manager in energy research, 6.4.5 SARAWAK development and demonstration projects.Sarawak does not have IPPs, but has an associated 6.5.2 TNB RESEARCH SDN BHDpower producer named Sejingkat Power Sdn Bhd, whichis a generating company, 49% owned by SESCO and TNB Research Sdn Bhd, a wholly owned subsidiarythe remaining 51% by Sarawak Enterprise Corporation of TNB, was formed in March 1993 to undertakeBhd (SECB). It is situated at Sejingkat, Sarawak and R&D activities for TNB. It provides qualityhas a capacity of two units of 50MW, each fuelled by assurance, laboratory testing and consultancycoal from Global Minerals near Kapit, Sarawak. Unit I services in energy and environment preservationwas commissioned on 19 February, 1998, while Unit 2 for TNB and other energy suppliers in Malaysia.was commissioned on 15 May, 1998. 6.5.3 PETRONAS RESEARCH SCIENTIFIC SERVICES SDN BHD (PRSS) PRSS is a subsidiary fully owned by PETRONAS which carries out R&D’s activities for the petroleum industry. 120

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.5.4 SIRIM BHD (SIRIM) and the outsourcing of non-core activities domestically (KeTTHA 2013).The E&E industry in Malaysia canSIRIM is involved in R&D activities for the industrial be categorised into the following four subsectors:sector. In the field of energy, its activities are focused on 6.5.6.1 CONSUMER ELECTRONICSrenewable energy and energy efficiency.6.5.5 PROGRAMME/PROJECT This subsector includes the manufacture of LED1. Centre of education and training for renewable television receivers, audiovisual products such as Blu-ray disc players/recorders, digital home theatre energy and energy efficiency (CETREE); systems, mini disc, electronics games consoles, and2. Project capacity building in integrated resources digital cameras. The sector is represented by many renowned Japanese and Korean companies which planning (IRP) at government and related agencies; have contributed significantly towards the rapid growth3. New building project for Ministry of Energy, Green of the sector. Leading companies are now undertaking R&D activities in the country to support their global and Technology and Water in Putrajaya; Asian markets. Exports of consumer electronic products4. Small Renewable Energy Programme (SREP); and in 2011 amounted to RM22.36 billion (USD8.7 billion).5. Demand Side Management’ Project. 6.5.6.2 ELECTRONIC COMPONENTS6.5.6 ELECTRICAL AND ELECTRONICS INDUSTRY Products or activities, which fall under this subsector,The Electrical and Electronics (E&E) industry is the comprise of semiconductor devices, passiveleading sector in Malaysia’s manufacturing sector, components, printed circuits and other components suchcontributing significantly to the country’s manufacturing as media, substrates and connectors. The electronicoutput (26.94%), exports (48.7%) and employment component sectors are the most important subsectors,(32.5%). In 2010, the gross output of the industry accounting for 36% of the total investments approved intotalled RM158.7 billion (USD 50.94 billion), exports the electronics sector in 2011. The subsector is mainlyamounted to RM235.5 billion (USD 75.7 billion) and dominated by the semiconductor players especiallycreated employment opportunities for 325,696 people. MNCs, mainly undertaking the assembly and testThe major export destinations are USA, China and activities.Singapore while the major import destinations are Nevertheless, the development of the semiconductorTaiwan, USA and South Korea. cluster has shown a gradual increase over the years. Over the years, Malaysia’s E&E industry has developed More companies are expanding research, design andsignificant capabilities and skills for the manufacture of development activities in their operations with lessa wide range of semiconductor devices. This is include emphasis in the manufacturing of low end products.photovoltaic cells and modules, high-end consumer The increase in demand for the miniaturisation andelectronics, and Information and Communication high performance devices for mobile, automotive, andTechnology (ICT) products. The E&E manufacturers in green applications has further stimulated the growththe country have continued to move-up the value chain of outsourcing activity in the semiconductor industry.to produce higher value-added products. This includes Semiconductor products constituted of export valueintensification of research and development efforts RM107 billion (USD34.4 billion). It contributed 93.4% of the total export of electronic components or 50.8% of the total electronics exports for 2011. 121

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.5.6.3 INDUSTRIAL ELECTRONICS to be sold to power utilities at a fixed premium price for a specific duration.This subsector consists of multimedia and information 6.6 CARBON NEUTRAL COMMUNITYtechnology products such as computers, computerperipherals, telecommunication products and office Carbon neutral, or having a net zero carbon footprint,equipment. The Industrial electronics subsector refers to achieving net zero carbon emissions byaccounted for 6% of the total investment approved in balancing a measured amount of carbon released withthe electronics sector in 2011. In that year too, a majority an equivalent amount sequestered or offset, or buyingof the investments approved amounting to RM2.6 billion enough carbon credits to make up for the difference.were from Electronic Manufacturing Services (EMS) It is used in the context of carbon dioxide releasingcompanies producing low volume - high mix products processes associated with transportation, energyfor various applications such as medical, aerospace, oil production, and industrial processes such as productionand gas, and telecommunication. of carbon neutral fuel.6.5.6.4 ELECTRICAL The carbon neutrality concept may be extended to include other GHG measured in terms of theirThe major electrical products produced under this carbon dioxide equivalence. The impact a GHGsubsector are lightings, solar related products and has on the atmosphere expressed in the equivalenthousehold appliances such as air-conditioners, amount of CO2. The term climate neutral reflects therefrigerators, washing machines and vacuum cleaners. broader inclusiveness of other greenhouse gases inIn 2011, investments in the subsector amounted to climate change, even if CO2, is the most abundant,RM9.7 billion, of which 91.4% was dominated by foreign encompassing other greenhouse gases regulated byinvestments while domestic investments accounted for the Kyoto Protocol, namely methane (CH4), nitrous oxide8.6% of the total approved investments in 2011. (N2O), hydrofluorocarbons (HFC), perfluorocarbons With exception to the solar industry, most of the (PFC), and sulphur hexafluoride (SF6).investments in the electrical subsector were from The best practice for organisations and individualsthe domestic sources, especially in the production seeking carbon neutral status entails reducing and/orof household appliances and electrical components. avoiding carbon emissions first so that only unavoidableMalaysia is home to many of the largest and renowned emissions are offset. Carbon neutral status is commonlysolar players such as First Solar and AUO-Sunpower. achieved in two ways:The presence of these MNCs has contributed to the • Balancing carbon dioxide released into thedevelopment of various products under the solar cluster. The growing awareness of the importance of the atmosphere from burning fossil fuels, withgreen technology including renewable energy has led to renewable energy that creates a similar amountthe introduction of the LED roadmap by the Malaysian of useful energy, so that the carbon emissions areGovernment. This has spurred the growth of the LED compensated, or alternatively using only renewableindustry and opens up new opportunities for both local energies that don’t produce any carbon dioxideand foreign investors in developing Malaysia’s LED (also called a post-carbon economy).industry. The introduction of the Feed-in-Tariff (FiT) in • Carbon offsetting by paying others to remove or2011 has encouraged the usage of renewable energy sequester 100% of the carbon dioxide emitted fromin the country. This mechanism enables electricity the atmosphere. For example, by planting trees orproduced from indigenous renewable energy resources by funding “carbon projects” that should lead to the 122

MEGA SCIENCE 2.0 Electrical & Electronics Sector prevention of future greenhouse gas emissions, or offers solutions to many of the nation’s most pressing by buying carbon credits to remove (or ‘retire’) them energy and electric power problems, including blackouts through carbon trading. While carbon offsetting is and brownouts, energy security concerns, power quality often used alongside energy conservation measures issues, tighter emissions standards, transmission to minimise energy use, some criticises the practice. bottlenecks, and the desire for greater control over6.6.1 CASE STUDY 1: SABAH ENERGY ISSUES energy costs. Small scale generating technologies (e.g. solar, wind,Renewable energy from solar and wind turbine is not only hydro or newer technologies) that are connected to thean excellent power alternative for the future, but it can electric power grid are identified as Distributed Grid.also revolutionise electricity generation in Sabah. Sabah DG systems allow customers to produce some or allhad its own uniqueness as it endowed was rich natural of the electricity they need. The electricity a customerresources which could be used to generate renewable uses (e.g. for HVAC: consumer electronics, lights) isenergy and contribute to economic development. The their electric load. By generating a portion or all of theprojects, the Application of Wind Technology System electricity a customer uses, the customer can effectivelyfor Energy Generation and the Sustainable Thin Film reduce their electric load.PV Building and the Renewable Energy Generation, In general, DG systems produce power for thehave been entrusted to SIRIM Bhd by the Ministry of buildings which the systems are connected to (e.g. solarScience, Technology and Innovation for research and panels on a home or business). Renewable DG systemsdevelopment. are able to provide power with minimal impact on the Overall, the projects can generate 25 kW of wind environment. However, most renewable DG systemsturbine power and 9.8 kW of solar energy. The power only produce power when their energy source, such asgenerated can light up a resort near the project site in wind or sunlight, is available. Due to the intermittency ofTanjung Simpang Mengayau and can be supplied and the power supply from DG systems, there may be timesstored in a battery system. It can also bring cheer to when the customer needs to receive electricity fromthe many rural residents who live far away from grid the utility company’s electric grid. When a DG systemareas. In the long-term, renewable energy can become produces more power than the customer’s load, excessa big alternative to the current practice of generating power is sent back to the utility company’s electric grid.electricity from fuel oil, charcoal, diesel and hydro This reduces the overall load that the utility companyreservoirs which incur huge operational costs. needs to supply.6.6.2 CASE STUDY 2: DISTRIBUTED GRID IN SABAH It is proposed that there be established a Borneo- wide distributed grid incorporating solar and wind power AND SARAWAK plants in Sabah and Sarawak. For that, the existing fossil and hydro power plants are considered as sources.Distributed Grid (DG) consists of a range of smaller-scale Accordingly, models for different power plants are firstand modular devices designed to provide electricity, reviewed for this proposal. As the distributed grid getsand sometimes also thermal energy, in locations close more complex and integrated, better data acquisitionto consumers. They include fossil and renewable and control systems are needed to control load flow andenergy technologies (e.g. photovoltaic arrays, wind minimise power outages. Power outages usually initiateturbines, microturbines, reciprocating engines, fuel from a small area and propagate over larger areascells, combustion turbines, and steam turbines); energy causing cascaded power failure. Considering this as wellstorage devices (e.g. batteries and flywheels); and as the distributed power generation from renewables, ancombined heat and power systems. Distributed grid Internet based distributed data acquisition and control network is needed. 123

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.7 ACTION PLAN FOR THE ENERGY SECTORTable 6.8 shows the issues and challenges of energy sector, followed by the future needs and proposed recommendationor action plans: Table 6.8 Issues and challenges of energy sectorNO ISSUES & CHALLENGES FUTURE NEEDS (R&D) PROPOSED RECOMMENDATIONS/ ACTION PLANS1 • Fuel Purchase 1) Smart fuel purchase – high quality • Best practice in sourcing fuel, • Fuel stockpiling, energy coal e.g. coal with good combustion security characteristics • IPP 2) Alternative energy source of fuel Selection of cost effective and • efficient alternative energy source• RE projection & achievement• Nuclear power plant• Energy supply surplus & Energy Efficiency2 Resource Efficient Power 1) Awareness and Industrial Practice • All potential generation sectors generation change Progressing towards sustainability • and fuel security 2) Review of design approach 3) Explore Renewable Energy without large scale Ecological Damage – e.g. small hydro 4) Efficient Biomassutilisation for energy source 5) Effective and efficient solar heating for turbines 6) Small scale (and isolated) generation development 7) Energy Storage technology and potential 124

MEGA SCIENCE 2.0 Electrical & Electronics Sector3 • Transmission loss 1) Awareness and Industrial Practice • Sourcing efficiency transmission • Balance of System change equipment / technologies4 Energy efficient Distribution 2) Review of design approach • Developing smart grid Equipment selection 1) Review of distribution method 2) Efficient distribution improvement • Efficient load distribution – – software shortest distance from source to user 3) Efficient distribution improvement – hardware5 Renewable energy Maximising benefits to the environment and minimising negative impacts by: 1) Conserving resources by ensuring that Purchasing policy favours environmentally friendly products for building materials, capital goods, food, and consumables. 2) Energy consumption is measured, sources indicated, and measures to decrease overall consumption adopted, while encouraging the use of renewable energy. 3) Greenhouse gas emissions from all sources controlled by the business are measured and procedures are implemented to reduce and offset them as a way to achieve climate neutrality. 4) Practices are implemented which will reduce pollution from noise, light, runoff, erosion, ozone- depleting compounds, and air and soil contaminantsNote: illustrates the final energy demand by sectors in MWhr, namely industrial, 1.8062 cmtransport, agriculture, non-energy, and residential and commercial 125

MEGA SCIENCE 2.0 Electrical & Electronics Sector Figure 6.1 Final Energy Demand by Sectors (MWhr) Figure 6.2 Short-term desired scenarios on energy efficiency and green energy technology 126

MEGA SCIENCE 2.0 Electrical & Electronics Sector6.7.1 SHORT-TERM ACTION PLAN (2014-2020)The short-term plan is predominantly industry-driven, as many developed countries around the world are expectedto achieve these as shown in Figure 6.2. The short-term plan is therefore focused on energy efficiency on energygeneration and meets the demand of the nation. Table 6.9 shows some of the action plans for medium term. Table 6.9 Short-term action plan (2014-2020) Change dimensions Actions Stakeholders Desired outcomesR&D 1) Provide support to the MOSTI, TNB, scientists, 1) Supply chains for nuclearInstitutional framework domestic industry in developing researchers, process constructionand policies capacities and expertise to engineers, universities, participate effectively as sub- technology investors 2) Distribution grid contractors and component management of smart suppliers in nuclear power plant grid projects 3) Smart grids provide 2) Information and communication an opportunity to link technology integration of smart societal, financial, grid technology and regulatory and policy objectives 1) Public awareness on nuclear MOSTI, PEMANDU, 1) Ongoing, as nuclear technology and safety programmes are EPU, TNB, private generators 2) Communicate with stakeholders launched and the public to explain 2) Build public support the role of nuclear energy in through involvement national energy strategy in the policy-making 3) Governments should process communicate with stakeholders and the public to explain the role of nuclear energy in national energy strategy, seeking to build public support through involvement in the policymaking process 127

MEGA SCIENCE 2.0 Electrical & Electronics SectorInfrastructure 1) Integrates several energy MITI, universities, colleges 1) Maximum integration supply and use systems within of renewable energy a given region in an attempt to resources optimise operation 2) Effective integration of 2) Smart grids to enable the variable resources to effective integration of electricity grids significantly higher amounts of variable resources 3) Appropriate business models addressing key 3) Operate across system issues including cost, boundaries of generation, security and sustainability transmission, distribution and end use 1) Policies on management and disposal ofValue chain and market 4) Expand pilots on automated MITI, private investors, radioactive wastesdevelopment demand response especially in startup companies service and residential sectors 2) Smart grids to build from household electrification 1) Policies and measures to ensure adequate long-term funding for the management and disposal of radioactive wastes 2) Developing and emerging economies can use smart grids to build from household electrification to community and regional systems 128

MEGA SCIENCE 2.0 Electrical & Electronics SectorRural Transformation to Net Neutral Sustainable such as the Tasik Chini area in Semenanjung MalaysiaEnergy Community: and other suitable remote areas of Sabah and Sarawak.There are four main issues faced by rural villages in Several innovative concepts such as the use ofMalaysia,specifically, urban migration, which stagnates renewable hydrogen production system utilisation fuelthe rural economy of abandoned villages with no rural cells, as shown in Figure 6.4, have to explored, andincome generation and insufficient education. These this will be different from the conventional battery basedissues can solved by introducing innovative renewable stand-alone renewable energy systems.energy technology affordable to economically-depressed 6.7.2 MEDIUM-TERM ACTION PLAN (2021-2035)grid-less remote areas of the country and generates rural The medium term action plan is to further develop andeconomic activities. Hence, an eco-framework solution expand the energy industry in the country to embraceto achieve net neutral renewable energy community or new technology for renewable and green energy.zero-energy community must be developed during the Application of new innovative technology is important,short-term (2015-2020), and medium-term (2021-2035) especially in producing renewable and green energy.in remote areas off grids of orang Asli communities in Table 6.10 shows some of the action plans for theSemenanjung Malaysia and rural communities of Sabah medium term.and Sarawak. The net neutral renewable energy conceptemphasises using all possible cost-effective renewableenergy technology and demand-avoidance strategiesMalaysia is located in the tropical region where the skyconditions are diffused in nature and low wind speed.Hence, there are challenges in technological andfundamental aspects of renewable energy systems thatmust be address which can be taken by universities andrelated research institutions. Besides that, educationpackages must be developed within the communityto achieve desired awareness net neutral conceptrenewable energy concept provide hands-on training onapplications of renewable energy with basic educationand societal awareness. The net neutral SustainableEnergy Community concept will create communitysocial activities and development of location-specificcottage industries. The concept of the neutral community is shownin Figure 6.3. It shows the integrated net neutralcommunity formulation. Community Zero Energybehaviour is essential to be achieved and withoutit no proper formula will be achieved. This can beaccomplished by setting community goals for energyand water use. Use policies, Information, education,and incentives and disincentives within the communityto achieve desired objectives. During the short termseveral concept must be developed for remote areas 129

MEGA SCIENCE 2.0 Electrical & Electronics Sector   Integrated Net Neutral Community FormulationThe  present   Renewable   Micropower Net  Neutral  Energy  work  introduces   Energy  Sources  &   Renewable  Energy   Communityan  eco   Optimisation  and  Framework   Technologies   -­‐ System  Integration Green  Space  Or  Outside  formulation  to   Low  Speed  Wind   Community  Boundaryachieve  net  neutral   Energy   Community  Net   Increasing  Income  community Conversion   Neutral  Energy   Generation  Activities System,  Solar   Behaviours Goals  For    Green  Energy  Use Powered   (goals,  policies,   Reduce  Recycle  and  Reuse Regenerative  Fuel   information,  education   Information and    incentives) Cell Education Behaviorial Transformation Figure 6.3 Formulation of the integrated net neutral community RENEWABLE MICROPOWER OPTIMISATION ANDSYSTEM INTEGRATION Figure 6.4 Rural transformation into a net neutral community 130

MEGA SCIENCE 2.0 Electrical & Electronics SectorFigure 6.5 Medium-term desired scenarios on energy efficiency and green energy technology 131

MEGA SCIENCE 2.0 Electrical & Electronics Sector Table 6.10 Medium-term action plan (2021-2035) Change Actions Stakeholders Desired outcomes dimensionsR&D 1) Replicating standarised designs to MOSTI, TNB, scientists, 1) Lessons learned from the extent possible, continue the researchers, process engineers, reference plants will be evolutionary development of reactor universities, technology investors available and nuclear fuel designs 2) Practical sharing of smart grids 2) Determine approaches to address costs and benefits system-wide and cross-sector barriers to enable practical sharing of smart gridsInstitutional 1) Work with the nuclear and electricity MOSTI, PEMANDU, 1) Ongoing, as nuclearframework and industries to ensure a coordinated EPU, TNB, private generators programmes are launchedpolicies approach to overcoming obstacles to nuclear development, especially 2) Equipment, data transport, where nuclear energy is being used interoperability and cyber for the first time security, and create plan for standards development 2) Put in place policies and measures to ensure adequate long-term funding for management and disposal of radioactive wastes, decommissioning, establishings the necessary legal and organisational framework for the development, as well as timely implementation of plans for radioactive waste management and disposal 3) Observe international best practice in developing the necessary nuclear energy legislation and regulatory institutions, to ensure that they are both effective and efficient 4) Governments and industry should evaluate priorities and establish protocols, definitions and standards for smart grid 132

MEGA SCIENCE 2.0 Electrical & Electronics SectorInfrastructure 1) Invest in building up industrial MITI, universities, colleges 1) Significant investmentValue chain capacities in the nuclear and related needed by 2015 to buildand market engineering industries worldwide nuclear power plantdevelopment to increase the global capability to build nuclear power plants 2) Optimise system operation of smart grid 2) Smart grids can reduce these peaks and optimise system operation 3) Coordinating collaboration and responsibilities 3) Increased levels of demand among electricity system response for customers from stakeholders industrial, service and residential sectors 4) Optimum planning, design and operation of distribution 4) Promote adoption of real time system in energy usage information and co-operation with customers pricing 1) Ability to build standarised 5) Continue expand pilots on MITI, private investors, startup designs on time and to cost automated demand response companies by 2020 especially in service and residential sectors 1) Build new designs can be reliably built on time and within expected costs, making continuous efforts to reduce construction times and control costs by using standarised designs to the extent possible, refining the construction process and further strengthening supply chains6.7.3 LONG-TERM ACTION PLAN (2036-2050)The final term action plan is themed as the next generation technology which suggests futuristic product developmentfor energy supply stability. This action plans are crucial to achieve the final scenario. The only way to be the marketleader is by leading technological advancement faster than the competitors. Table 6.11 presents the action plan forthe long term. 133

MEGA SCIENCE 2.0 Electrical & Electronics Sector Figure 6.6 Long-term desired scenarios on energy efficiency and green energy technology 134

MEGA SCIENCE 2.0 Electrical & Electronics Sector Table 6.11 Long-term action plan (2036-2050) Change dimensions Actions Stakeholders Desired outcomesR&D 1) Develop where necessary and MOSTI, TNB, scientists, 1) To be in operation by researchers, processInstitutional framework implement plans for the long- engineers, universities, 2020and policies term management and disposal technology investors of all types of radioactive 2) Major capacity expansion wastes, in particular for the needed by 2040-2050 construction and operation of and beyond geological repositories for spent fuel and high-level waste 3) Variable and distributed approaches for changing 2) Expand uranium production the generation landscape and the capacity of nuclear fuel cycle facilities in line with the growth of nuclear generating capacity, including the deployment of more efficient advanced technologies where available 3) Develop an evolutionary MOSTI, PEMANDU, 1) Ongoing, as nuclear approach to regulation for EPU, TNB, private generators programmes are changing the generation launched landscape from existing and conventional assets 2) Globally accepted standards for smart grid 1) Ensure that the system of nuclear energy-related legislation and regulatory oversight provides an appropriate balance between protecting the public and the environment while providing the certainty and timeliness required for investment decisions, and make reforms if required. 2) Expand collaboration in the development of international standards to reduce costs and accelerate innovation for smart grid 135

MEGA SCIENCE 2.0 Electrical & Electronics SectorInfrastructure 1) Fully establish the latest MITI, universities, colleges 1) New designs now underValue chain and market nuclear power plant designs by construction will be indevelopment constructing reference plants operation by 2015 in a few countries around the world, to refine the basic design 2) Increase visibility of and any regional variants, and operation parameters build up global supply chains and reliability and capacities 1) Ability to build advanced 2) Continue to deploy smart grids designs on time and to on the transmission system cost by 2050 3) Continue expand pilots on MITI, private investors, 2) Product and service automated demand response startup companies providers collaborate in especially in service and smart grids deployment residential sectors 1) Continue building new designs that can be reliably built on time and within expected costs; making continuous efforts to reduce construction times as well as control costs by using advanced designs to the extent possible, refining the construction process and further strengthening supply chains 2) A broad range of product and service providers who have not worked together in the past will have to collaborate in smart grids deployment 136

MEGA SCIENCE 2.0 Electrical & Electronics SectorTransition towards the Hydrogen Economy: industrial sectors: cement, ceramic, food, glass, iron &Transition towards the hydrogen economy to substitute steel, pulp & paper, rubber and wood.the current hydrocarbon economy will begin at the end of Energy efficiency in buildings means using lessthe long term (2036-2050). Hydrogen acts as an energy energy for heating, cooling and lighting. For that, it alsocarrier and is environmentally cleaner source of energy means buying energy-saving appliances and equipmentto end-users, particularly in transportation, residential for use in a building. Integrating EE features into theand commercial sectors applications, without release architecture and conducting energy audits ensuresof pollutants (such as particulate matter) or carbon that mechanical systems work together effectively anddioxide at the point of end use as shown in Figure 6.7. efficiently. The transportation sector is pivotal in theIn the short-term (2015- 2020) and medium-term (2021 growth and functioning of the Malaysian economy, but– 2035) demonstration projects, renewable hydrogen it also consumes the most energy. To offset scarceproduction and fuel cell should be funded. By which, and expensive petroleum fuels, viable alternative fuelsthe concept of renewable hydrogen and regenerative (natural gas and bio-fuels) can provide huge savings forfuel cells for rural electrification should be introduced vehicles, especially when integrated with improvementsand the competiveness of this concept compared to in public transportation.conventional the renewable energy hybrid battery Consumption of electricity in the residential sectorsystem. is particularly high and, together with the commercial6.8 CONCLUSION sector, represents almost 28% of the total demand for the country. Basic energy is used for cooling and lightingIn Malaysia, EE is given high priority within these key our homes, to operate appliances and machines, andsectors: Independent Power Producers, industrial water heating as well as for cooking. Placement, design,manufacturing, building design, transportation, and and construction materials used does affect the energyresidential. Several existing programmes and projects efficiency of homes. Heat recovery and solar energyhave been initiated to address industrial energy usage technologies are some options that are available toto resolve development barriers and demonstrate the provide solutions for homeowners (GreenTech Malaysiaeffectiveness of EE applications. Electricity supply 2013).service in Malaysia is vertically integrated with three Malaysia has an abundance of renewable energy,main electricity utilities or Independent Power Producers making alternative energy an attractive option to consider.(IPP) in Peninsular, Sabah and Sarawak - operating The market for renewable energy solutions is expectedgeneration, transmission, distribution and supply to boom in the near future. By implementing feasibleactivities. In addition, there are 18 investor-owned projects now, local manufacturers would be wise to payindependent power producers supplying power to attention to this growing market and take advantagethese utilities. Several mini-utilities generate electricity of business opportunities and lower energy costs.or purchase power from the main utilities for their own Renewable Energy (RE) is energy obtained from naturaluse with excess power supply sold to consumers within resources such as wind, solar, rain and tides, whichcertain dedicated areas. are naturally replenished. RE resources are reliable, The Malaysian Industrial Energy Efficiency efficient and competitive as compared to conventionalImprovement Project (MIEEIP) is a forerunner in technology. Over the past few decades, increased usebuilding capacity to create energy saving technologies of RE has resulted in a substantial improvement in REand financial incentives; the project conducts audits and technologies. Industrial and institutional equipment -engineering services to plant operators, while promoting biomass boilers, photovoltaic panels, combined heatenergy monitoring and better design aspects. The and power plants, and solar water heaters - can provideactivities under the MIEEIP are implemented for eight immediate benefits to many Malaysian businesses. 137

MEGA SCIENCE 2.0 Electrical & Electronics Sector A roadmap for the short-term action plan (2015- include effective smart grid implementation, effective2020) has been developed. The short-term plan is and efficient nuclear energy generation, improvementpredominantly industry-driven, as many developed of solar energy and alternative energy source of fuel,countries around the world are expected to achieve the including efficient and effective energy distribution andfollowing action plans on energy efficiency and green transmission.energy such smart grid implementation, Net neutral The long-term action plan (2036-2050) is themed asrenewable energy sustainable system, Effective and the next generation technology which suggests futuristicefficient solar energy, Alternative energy source of fuel product development for energy supply stability. Thisand Efficient energy distribution. action plan is crucial to achieve the final scenario. The roadmap for the medium Medium-term action The only way to be the market leader is by leadingplan (2021-2035) has been developed with the objective technological advancement faster than the competitor.of to further expanding the energy industry in the The action plans for the long term include advancedcountry to embrace new technology for renewable and smart grid implementation, carbon neutral sustainablegreen energy. Application of new innovative technology community, effective and efficient solar energy buildis important, especially in producing renewable and advanced designs of nuclear plant and finally transitiongreen energy. Certain action plans of the medium term to the Hydrogen economy beyond 2050. ENERGY TRANSMISSION DISTRIBUTIONGENERATIONFigure 6.7 Transition to a full hydrogen economy beyond 2050 for Malaysia 138

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MEGA SCIENCE 2.0 Electrical & Electronics SectorCHAPTER 7SOLAR AS AN EFFICIENT RENEWABLE ENERGY - BASELINESTUDY: GLOBAL DRIVERS,TECHNOLOGY OVERVIEW,CASE STUDIES, MARKET TREND, MALAYSIA’S CURRENTSTATUS, DESIRED OUTCOMESSolar energy is an environment-friendly energy resource alone system equipped with batteries, they can be usedwith huge potential for fulfilling the energy demands in remote regions where there is no grid electricity. Solarof mankind. It can play a substantial role towards PV panels can be ground-mounted, installed on buildingachieving a sustainable low-hydrocarbon future. This rooftops or designed into building materials at the pointis especially true for Malaysia, given her favourable of manufacturing. The other category of solar energynatural geographical settings that can be tapped to application is the solar thermal technology, in whichdrive a vibrant solar energy industry. The applications of solar radiation is converted into useful heat for varioussolar energy for Malaysia’s residential, commercial and applications such as industrial processes, water and airindustrial sectors are potentially huge. heating, and drying. The solar energy applications can be classified 7.1 GLOBAL DRIVERSinto 2 broad technological categories, namely solarphotovoltaic (PV) technology and solar thermal The global drivers of the growth and demand of solartechnology. Solar PV technology converts sunlight into energy are worldwide concerns, which are as follows:electricity using a specific type of semiconductor device i) energy security and fossil fuel priceknown as a solar PV cell. Solar PV cells are primarily ii) international pacts and public policiesused in grid-connected PV systems to power residentialand commercial appliances, including lighting and air-conditioning. When solar PV cells are fitted in a stand 141

MEGA SCIENCE 2.0 Electrical & Electronics Sectoriii) dramatic reduction of technology costs of global crude oil reserves; 6 countries have 70% of alliv) public sentiment natural gas reserves; and 8 countries have 89% of all coal reserves. The US imports 20% of its energy needs,7.1.1 ENERGY SECURITY AND FOSSIL FUEL while more than half of Asia, Africa and Latin America PRICE INCREASE import over half of all their energy needs. With such heavy reliance on external sources,Following the global energy crisis of the 70’s and shortages in supplies could cause destabilisation ofearly 2000’s, governments around the world have national economies. To ameliorate these dangers, manydemonstrated increasing concern about their energy governments have implemented strategies to increasesecurity, which is intricately connected to the delicate the proportions of renewable energy resources in theirpolitical stability of a few oil-rich middle-eastern countries energy-mix, which would simultaneously stimulate local(Figure 7.1). Only 8 countries in the world possess 81% economies and reduce energy costs and national debts. Figure 7.1 Real (2010 US dollar) and nominal crude oil prices, with peaks seen during oil crisis of 1970’s and 2000’sSource: www.wtrg.com 142

MEGA SCIENCE 2.0 Electrical & Electronics Sector7.1.2 INTERNATIONAL PACTS AND PUBLIC One such pact is the EU Renewable Directive, which POLICIES mandates levels of renewable energy use within the European Union. Published in 2009, the directiveEnforcement of public policies supportive of renewable requires its 28 member States to produce a pre-energies is one of the most effective drivers of solar agreed national proportion of energy consumption frompower. Driven by environmental concerns, many renewables such that the EU as a whole shall obtain atgovernments have implemented policies to encourage least 20% of total energy consumption from renewablesinvestments in renewable energies, in addition to by the year 2020 (Table 7.1).committing to international pacts to reduce carbonfootprint.Table 7.1 EU national overall targets for the share of energy from renewable sources in gross final consumption of energy in 2020 2009 2009 Objective 2020 de la directive 2009/28/CESweden 47.7% 46.9% Objective 2020 from theLatvia 35.5% 34.3% 2009/28/EC DirectiveFinland 30.7% 33.6% 49.0%Austria 30.2% 30.7%Portugal 24.7% 24.7% 40.0%Estonia 23.4% 24.1% 38.0%Denmark 19.2% 23.0% 34.0%Slovenia 19.7% 21.7% 31.0%Romania 22.9% 21.4% 25.0%Lithuania 20.8% 21.1% 30.0%Spain 12.9% 14.1% 25.0%Bulgaria 11.6% 12.9% 24.0%France 11.7% 12.4% 23.0%Slovakia 10.7% 11.4% 20.0%Germany 10.7% 16.0%Poland 9.3% 23.0%Czech Republic 9.0% 9.9% 14.0%Greece 8.5% 9.7% 18.0%Italy 8.0% 9.1% 15.0%Hungary 7.7% 8.5% 13.0%Ireland 8.5% 8.5% 18.0%Cyprus 5.1% 5.9% 17.0%Belgium 4.9% 5.5% 13.0%Netherlands 4.7% 5.4% 16.0%United Kingdom 4.0% 3.8% 13.0%Luxembourg 3.0% 3.3% 13.0%Malta 2.6% 2.6% 14.0%European Union (27 countries) 0.2% 0.3% 15.0% 11.5% 12.4% 11.0% 10.0% 20.0%Source: www.erec.org 143

MEGA SCIENCE 2.0 Electrical & Electronics Sector7.1.3 DRAMATIC COST REDUCTION OF SILICON 7.1.4 PUBLIC SENTIMENT PVCELLS Pressures of escalating oil prices have led to theDriven by escalating demands and continuously increase of public support towards renewable energies.improved technologies, the cost of silicon PV cells In the European Union, majorities in all 27 stateshas reduced dramatically over the last four decades support the increasing the share of renewable energies(Figure 7.2). Swanson’s Law, named after the founder to 20% by the year 2020. In the US, an overwhelming 9of solar panel manufacturer Sun Power Corporation, is in 10 persons surveyed see it as important to invest inan observation that the price of solar PV modules tends renewable energy, and 8 in 10 support tax incentives forto drop 20% for every doubling of cumulative shipped this purpose.volume. The crystalline silicon PV cell which dominates Moreover, the higher costs of renewable energies90% of the market now costs ~USD 0.70/watt, which is do not seem to be a deterrence of public support. Inless than 1% of what it was in 1977. 2011, researchers at Harvard and Yale found that the average US citizen was willing to pay $162 a year more to support a national policy requiring 80% clean energy by 2035. Added to that, there are also supportive projections that investments in alternative energy will pay off economically in the long run. Figure 7.2 The dramatic price reduction of silicon Figure 7.3 Global CO2 emissions from fossil fuel solar PV cells Source: www.earthpolicy.org Public support towards renewable energies is alsoSource: Bloomberg New Energy Finance driven by concerns of the environmental impact of fossil fuels. Figure 7.3 shows carbon dioxide (CO2) emissions from fossil fuels, which are growing exponentially despite worldwide agreements by governments on emission limits. After a short dip due to the global financial crisis in 2009, emissions rebounded in 2010 and have since grown 2.6% every year, hitting an all- time high of 9.7 billion tons in 2012. Scientists warn of 144

MEGA SCIENCE 2.0 Electrical & Electronics Sectordire consequences, including greenhouse effect and 7.2.1 SOLAR PHOTOVOLTAIC (PV) TECHNOLOGYglobal climate change. A solar photovoltaic (PV) cell (Figure 7.5) is made of7.2 SOLAR ENERGY TECHNOLOGY OVERVIEW semiconductor materials. When exposed to light, theThe energy resources of the world include solar valence electrons of the semiconductor are excited andradiation, geothermal, wave and tidal, including nuclear freed, causing electrical current. The two major types ofenergy. These can be classified as shown in Figure 7.4. solar PV cells are crystalline silicon and thin-films, whichSolar radiation energy resource can be further divided differ from each other in terms of light absorption ability,into direct solar energy, stored solar energy (renewable energy conversion efficiency, manufacturing technology,hydrocarbon such as biogas and biomass; and non- and production costs. Solar PV cells are silent and cleanrenewable hydrocarbon such as shale, petroleum, in operation, highly reliable, have low maintenance, andnatural gas and coal) and indirect solar energy (wind extremely robust with expected lifetime of at least 20 toand hydropower). 30 years. They are also very modular, and thus can be adapted for many locations and applications. Figure 7.5 A crystalline silicon solar PV cell 7.2.1.1 CRYSTALLINE SILICON PV Figure 7.4 Classification of the world’s energy resources Crystalline silicon solar cells can be divided into two Direct solar energy technology can be divided into: types, namely mono-crystalline and poly-crystalline(a) solar photovoltaic (PV) technology — production solar cells. The following describes these solar cells:of electricity by solar PV cells for stand alone andgrid-connected applications; and (b) solar thermal a. Mono-crystalline solar cell: Manufactured bytechnology — production of hot air or water for various sawing wafers from a very pure single andapplications such as drying, cooling, water heating and continuous cylindrical crystal of silicon with zeroindustrial processes. defect and impurities. Most efficient (~15% – 20%) and most expensive; b. Poly-crystalline solar cell: Manufactured by sawing wafers from an ingot of melted and re- 145

MEGA SCIENCE 2.0 Electrical & Electronics Sector crystallised silicon (cast Si) of multiple small 7.2.1.3 DYE-SENSITISED SOLAR CELL AND crystals. Less efficient (12%–15% typical OTHER ORGANIC SOLAR CELLS modules), but less expensive than mono- crystalline, and its manufacturing process is A dye-sensitised solar cell (DSSC) is a low-cost thin-film simpler. solar cell based on a semiconductor formed between a7.2.1.2 THIN-FILM SOLAR CELL photo-sensitised anode and an electrolyte. An organic solar cell makes use of organic polymers for lightA thin-film solar cell (TFSC), also known as thin-film PV absorption and charge transport. Thin film of organiccell (TFPV), is a solar cell that is made by depositing semiconductor made from polymer and polyethylene areone or more thin layers of PV material on a substrate, still in the early stage of development. Organic solar cellsusually coated glass, metal or plastic. The thickness are potentially the least expensive solar cell. However,range of such a layer varies from a few nanometres its efficiency is currently very low at less than 3%.to tens of micrometres. A thin-film solar cell is moreflexible, cheaper and easier to manufacture compared 7.2.1.4 NEXT GENERATION HIGH-PERFORMANCE to crystalline silicon solar cell, hence useful for small- GRAPHENE-BASED SOLAR CELLSscale applications such as calculators. Thin-film solarcells are usually categorised based on the PV material Due to its varied interesting properties, graphene andused: its derivatives are a promising candidate material for producing next generation of high-performance solar a. Amorphous silicon (a-Si) and other thin-film cells. Many studies indicate that the morphological, silicon (TF-Si): Manufactured as a thin film electrical, optical and mechanical properties of carbon of deposited disordered Si on glass or metal nano-materials can enhance the energy-conversion (flexible) substrates; performance of solar cells. b. Cadmium telluride (CdTe): An efficient light For this reason, interest in graphene-based solar cells absorbing material; has been growing in the past few years. Among all the types of solar cells, the graphene-based dye-sensitised c. C opper Indium Gallium Selenide (CIS or solar cell (Figure 7.7) potentially offers a successful CIGS), Copper Indium Gallium Diselenide solution to extend the solar absorption range to longer (CuInSe2): The highest efficiency thin-film wavelengths, with the high conductivity of graphene cell/module (12% to 13%). facilitating electron transport in the solar cell. Table 7.2 summarises some research studies focusing on graphene-based solar PV cells.Figure 7.6 A thin-film solar cell 146

MEGA SCIENCE 2.0 Electrical & Electronics Sector Graphene in ITO/PEDOT:PSS/P3HT:PCBM/MoO3 coated tandem solar graphene/P3HT:PCBM/LiF/Al P3HT:PCBM/GO:PEDOT/P3HT:PCBM/Al/ cells Ca ITO/GO:SWCNTs/P3HT:PCBM/ ZnO+GO:SWCNTs/P3HT:PCBM/Ca/Al 7.2.1.5 STAND-ALONE PV SYSTEMFigure 7.7 A dye-sensitised solar cell fabricated In many PV systems, the generated electricity will not with graphene-oxide be used as it is produced but may be required during the night or during cloudy weather conditions. A stand-Source: Y.L. Kun Seok Lee alone PV system as shown in Figure 7.8 consists of a PV array which is built up from a number of PV panels to Table 7.2 Graphene-based solar cells make up the peak power capacity; a charger-controller and studied structures for controlling the charging and discharging of battery; and a battery bank for storing the generated electricalSolar cell Solar cell structure energy for later use. Storing electrical energy makes type the stand alone PV system a reliable source of power day and night. PV systems with battery storage are Graphene ITO/GO/P3HT:PCBM/LiF/Al being used all over the world to power lights, sensors,polymer solar ITO/ZnO/C60-SAM/P3HT:PCBM/GO/Ag recording equipment, switches, telephones, televisions, Multilayer graphene (MLG)/PEDOT:PSS/ and power tools. cell P3HT:PCBM/Ca/Al Graphene- ITO/GO/NiOx/P3HT:PCBM/LiF/Al Figure 7.8 A stand-alone PV system based dye- TiO2+GO sensitised solar cells Counter electrode of ITO/[PDDA@ERGO] in Graphene low volatility electrolytequantum dot Graphene/SiO2 composite cathode in I3-/I- solar cells redox electrolyte Graphene nanoplatelets (GP) cathode in [Co(bpy)3]3+/2+ redox electrolyte ITO/PEDOT:PSS/P3HT:Graphene quantum dots (GQDs)/Al CoS/graphene sheet (CoS/GS) electrode TiO2-NA and CdS/TiO2-NA loading with graphene quantum dot (GQDs) Quantum dot dye-sensitised solar cells (QDSSCs) based on TiO2 film photoanode with graphene 147

MEGA SCIENCE 2.0 Electrical & Electronics Sector The batteries are direct-current devices and are Figure 7.9 Grid-connected solar photovoltaic systemdirectly compatible only with dc loads. Besides storing 7.2.2 SOLAR THERMAL TECHNOLOGYelectrical energy, the batteries can also serve as a In a solar thermal application (Figure 7.10), heat frompower conditioner to the loads. This allows the PV solar radiation is used for various applications such asarray to operate closer to its optimum power output. drying, cooling, air and water heating. A solar waterMost batteries must be protected from overcharge and heater for domestic water heating may not be anexcessive discharge, which can cause electrolyte loss essential item in a typical Malaysian household, but itand can plate damage. Protection is usually achieved has many industrial applications in which heated waterusing a charge controller, which also maintains system is needed such as in hotels, hospitals, and for industrialvoltage. Most charge controllers also have a mechanism processes in the food and textile industries.that prevents current from flowing from the battery backinto the array at night.7.2.1.6 HYBRID PV SYSTEMA hybrid PV system has the components of a standalonePV system in addition to power generating system(s).Normally, the additional power generating system isa diesel generator. A hybrid PV system is capable ofsupplying power without interruption because the powergenerator can be programmed to operate at regularintervals so as to maintain the battery bank being fullycharged. Hybrid PV systems are essential power sourcein remote areas beyond the reach of power grid.7.2.1.7 GRID-CONNECTED PV SYSTEMIn a grid-connected PV system (Figure 7.9), the Figure 7.10 Solar thermal water heating system uses theelectricity generated can be used on site or fed (sold) thermal radiation from the sun to heat waterthrough a meter into the utility grid. Net metering isan important aspect in a grid-connected PV system, Source: www.solarage.co.ukenabling the system operator to buy and sell electricity.When the operator requires more electricity than the PVarray is generating, the need can be automatically metby power drawn from the utility grid. When less electricityis required, the excess power generated by the PV is fed(or sold at a certain tariff, known as feed-in-tariff) back tothe utility. Used this way, the utility backs up the PV likebatteries do in standalone systems, thus eliminating theneed for a battery bank that adds costs of the system. Atthe end of the billing period, a credit for electricity soldgets deducted from charges for electricity purchased. 148

MEGA SCIENCE 2.0 Electrical & Electronics Sector The most important component of solar thermal By dispensing with a heat exchanger in these flat platetechnology is a solar thermal collector. A solar thermal panel, temperatures need not be quite so high for thecollector is designed to collect heat by absorbing sunlight. circulation system to be switched on, so such directSolar thermal collectors fall into two general categories, circulation panels, whether polymer or otherwise, can benamely non-concentrating and concentrating. more efficient, particularly at low light levels. However, In the non-concentrating type, the collector area polymer collectors suffer from overheating when(i.e. the area that intercepts the solar radiation) is the insulated, as stagnation temperatures can exceed thesame as the absorber area (i.e. the area absorbing the melting point of the polymer. For instance, the meltingradiation). In these types the whole solar panel absorbs point of polypropylene is 160°C, whereas the stagnationthe light. The concentrating type of thermal collector is temperature of insulated thermal collectors may exceedcomposed of mirrors or lenses to concentrate sunlight 180°C if control strategies are not used.collected from a large area onto a small area, in which The evacuated tube collectors have multiple evacuatedthe heat is converted to electricity. borosilicate glass tubes which heat up solar absorbers,7.2.2.1 SOLAR WATER HEATER and ultimately, solar working fluid (water or an antifreeze mix—typically propylene glycol) in order to heatIn a solar water heater, the flat-plate and evacuated domestic hot water, or for hydronic space heating. Thetube solar collectors are used to collect heat for water vacuum within the evacuated tubes reduces convectionheating. They consist of a dark flat-plate absorber and conduction heat losses, enabling them to reachof solar energy; a transparent cover that allows solar considerably higher temperatures than most flat-plateenergy to pass through but reduces heat loss; a heat- collectors. There are two types of tube collectors whichtransport fluid flowing through tubes to remove heat are distinguished by their heat transfer method: the olderfrom the absorber; and a heat insulating backing. The type pumps a heat transfer fluid (water or antifreeze)absorber consists of a thin absorber sheet (of thermally through a U-shaped copper tube in each of the glassstable polymers, aluminum, steel or copper, to which collector tubes.a black or selective coating is applied) backed by a 7.2.2.2 SOLAR AIR HEATERgrid or coil of fluid tubing placed in an insulated casingwith a glass or polycarbonate cover. Fluid is circulated A solar air heater (Figure 7.11) uses solar panelsthrough the tubing to transfer heat from the absorber to warm air, which is then conveyed into a room orto an insulated water tank. This may be achieved drying chamber. Air is heated in a collector and eitherdirectly or through a heat exchanger. Some fabricates transferred directly to the interior space or to a storagehave a completely flooded absorber consisting of two medium, such as a rock bin. The basic components ofsheets of metal stamped to produce a circulation zone. a solar air heater system include solar collector panels,Because the heat exchange area is greater, they may a duct system and diffusers. The systems can operatebe marginally more efficient than traditional absorbers. with or without a fan. Without a fan, the air is distributed An alternative to metal collectors is new polymer through natural ventilation.flat-plate collectors. These may be wholly polymer, orthey may include metal plates in front of freeze-tolerantwater channels made of silicon rubber. Polymers, beingflexible and therefore freeze-tolerant, are able to containplain water instead of antifreeze. Therefore, they maybe plumbed directly into existing water tanks instead ofneeding to use heat exchangers that lower efficiency. 149

MEGA SCIENCE 2.0 Electrical & Electronics Sector a heat engine (usually a steam turbine) connected to an electrical power generator. The solar concentrators used in CSP systems can often also be used to provide industrial process heating or cooling, such as in solar air-conditioning. Concentrating technologies exist in four common forms: parabolic-trough, dish Stirlings, concentrating linear Fresnel reflector, and solar power tower. Although simple, these solar concentrators are considerably far from their theoretical maximum concentrating capabilities. For example, the parabolic-trough concentration gives about one-third of the theoretical maximum for the design acceptance angle. The theoretical maximum may be further approached using elaborate concentrators based on non-imaging optics. Figure 7.11 A solar air collects the sun’s thermal energy to Different types of concentrators produce different warm the air inside a building peak temperatures and correspondingly varying thermodynamic efficiencies, due to differences in the7.2.2.3 PHOTOVOLTAIC THERMAL COLLECTORS way that they track the sun and focus light. However, CSP technologies utilise the direct component of thePhotovoltaic thermal collectors (PVT) are solar thermal solar radiation only, and are unsuitable for Malaysia duecollectors that use PV cells as an integral part of the to the diffused nature of solar radiation in the tropics.absorber plate. The system simultaneously generatesboth thermal and electrical energy. The number of the 7.3 CASE STUDIESPV cells in the system can be adjusted according to the 7.3.1 EFFECTIVE FEED-IN-TARIFFS BOOST local load demands. GROWTH OF SOLAR POWER IN GERMANY In a conventional solar thermal system, an externalelectrical energy is required to circulate the working Germany is one of the world’s biggest solar PV installer,fluid through the system. With a suitable PVT design, with an operating capacity of 34.791  GW at the endone can produce a self-sufficient solar collector system of August 2013. Germany’s new solar PV installationsthat requires no external electrical energy to run. The increased by about 7.6  GW in 2012, and solar PVdifferent options in the development in PVT systems provided 18 TWh of electricity in 2011, which is abouthave been categorised by the heat transfer fluid used, 3% of total electricity. Large PV power plants in Germanysuch as air, water, or refrigerant. include Senftenberg Solar Park, Finsterwalde Solar7.2.2.4 SOLAR CONCENTRATING TECHNOLOGIES Park, Lieberose Photovoltaic Solar Park, Strasskirchen Solar Park, Waldpolenz Solar Park, and Köthen Solar Park.Concentrated solar power (also called concentratingsolar power, concentrated solar thermal, and CSP)systems use mirrors or lenses with solar trackingsystems to concentrate a large area of sunlight ontoa small area. Electrical power is produced when theconcentrated light is converted to heat, which drives 150

MEGA SCIENCE 2.0 Electrical & Electronics Sector Figure 7.12 The 78 MW Phase 1 of the Senftenberg Solar Figure 7.13 Dramatic price reductions of Park in Germany generates power for 25,000 households PV systems in Germany The German government has set a target of 66 GW of Source: BSW-Solarinstalled solar PV capacity by 2030, to be reached withan annual increase of 2.5 to 3.5 GW,and a goal of 80%of electricity from renewable sources by 2050. Solarpower in Germany has been growing dramatically dueto the country’s feed-in-tariffs for renewable energies,which were introduced by the German RenewableEnergy Act. The Act has helped to push the prices ofPV systems down by more than 50% in five years since2006 (Figure 7.13). This dramatic cost reduction resultsin an exponential increase of solar power installations inGermany over the last 20 years, with a doubling time of1.5 years, as shown in Figure 7.14 and Figure 7.15. Figure 7.14 The percentage proportion of solar-generated power out of total electricity consumption in Germany 151

MEGA SCIENCE 2.0 Electrical & Electronics Sector Figure 7.15 The exponential increase of total solar power The feed-in-tariff introduced by the German Renewable installations in Germany Energy Act is effective in providing the much-needed financial certainty for renewable energy investments, The German Renewable Energy Act, effective from hence boosting participation. Feed-in-tariff (FIT) is athe year 2000, has been widely credited for the providing policy mechanism designed to accelerate investmentstremendous boost for renewable energies in Germany, in renewable energy technologies. It achieves thisresulting in the exponential increase of solar PV by offering long-term contracts to renewable energyinstallations over the last two decades. The three main producers, typically based on the cost of generationprinciples of the Act are investment protection through of each technology. In addition, FIT often includes aguaranteed feed-in-tariffs; zero-effect to Germany’s tariff regression, a mechanism according to which thepublic funds; and constant innovation by tariff regression price (or tariff) ratchets down over time. The goal of(periodic lowering of rates to exert cost pressure, hence, FIT is to offer cost-based compensation to renewabledriving technology efficiency). energy producers, providing price certainty and long- term contracts that help finance renewable energy investments. The resulting surge of demands for solar energy systems has created many German solar energy corporations, which include Aleo Solar, Bosch, Belectric, Centrosolar, Centrotherm Photovoltaics and Conergy. In 2011, 20% of electricity in Germany came from renewable sources, and 70% of this was financed by feed-in-tariffs. In addition, the feed-in-tariff generates technology competition and jobs. There are about 340,000 people working in the RE sector in Germany; which is an industry with an estimated turnover of €7.7 billion.Figure 7.16 Annual newly installed capacity of flat-plate and evacuated tube collectors by economic regionSource: EIA 2012 152

MEGA SCIENCE 2.0 Electrical & Electronics Sector7.3.2 COST-COMPETITIVE SOLAR THERMAL WATER HEATING IN CHINASolar thermal heating harnesses the sun’s thermal Figure 7.17 Solar PV global capacity 1995-2012radiation for domestic water and air heating and forindustrial processes. China is the world’s largest solar Source: www.ren21.netthermal heating market with 180.4 GWth, amounting to69% of global capacity. Over the past 20 years, China’s Figure 7.18 Solar PV global operating capacity; shares of toprapid economic development has pushed the demand 10 countries in 2012 (100 GW)for solar water heating. The steady growth of solarthermal heating in China is indicated by new thermalcollector installations, as shown in Figure 7.16. The key selling point of solar water heaters in Chinais their cost-competitiveness compared to electricand gas water heaters. For example, in Rizhao cityof the Shandong province where about 99% of allhouseholds use solar water heating, the initial capitalcosts for solar water heaters are comparable to thatof conventional electric systems. In addition, lifecycleannual savings from solar water heater are about 3-6%of their average household income. While the averageannual cost over the lifetime of an electric water heateris USD 95 and USD 82 for a gas water heater, a solarwater heater only costs USD 27 annually (IEA 2010).7.4 CURRENT STATUS OF THE GLOBAL SOLAR ENERGY MARKET7.4.1 SOLAR PV MARKET AND TRENDSIn 2012, the global solar PV market total operating Source: www.ren21.netcapacity reached 100 GW (Figure 7.17). The world’stop solar PV markets are Germany, Italy, China, the US,and Japan, which are also leading in terms of total PVoperating capacity (Figure 7.18). In terms of solar PVinstallation per-capita, Germany, Italy, Belgium, CzechRepublic, Greece, and Australia are world leaders. Europe as a whole added 16.9 GW (57%) of newinstallations in 2012, ending with 70 GW in operation.Other top European markets were France (1.1 GW),UK (0.9 GW), Greece (0.9 GW), Bulgaria (0.8 MW), andBelgium (0.6 MW). All displayed total operating capacityincreased by at least 30%, with Bulgaria’s capacity risingsix-fold. 153

MEGA SCIENCE 2.0 Electrical & Electronics Sector In 2012, 12.5 GW was added elsewhere beyond amounting to an estimated 100 MW added in 2012.Europe, up from 8 GW in 2011. The largest non- Europe is the largest BIPV market with more than 50European markets were China (3.5 GW), US (3.3 GW), companies active in the sector.Japan (1.7 GW), Australia (1 GW) and India (1 GW). The The number and capacity of large PV projectsUS capacity increased by nearly 85% in 2012 to 7.2 GW, continues to grow. In 2013, about 90 plants in operationwith California recording more than 1 GW in additions were larger than 30 MW, and about 400 PV plants hadand becoming home to 35% of total US capacity. China at least 10 MW capacity. The world’s 50 biggest plantshad doubled its capacity, ending 2012 with about 7 reached cumulative capacity exceeding 4 GW by theGW. Meanwhile, Japan’s total capacity increased end of 2012, and at least 12 countries across Europe,35% to exceed 6.6 GW, driven by new feed-in-tariffs. North America, and Asia had solar PV plants over 30Whereas, in 2012, Australia added 2.4 GW, up 70% MW. The world’s two largest are the 250 MW thin filmover 2011. India also experienced significant growth, plant in Arizona and a 214 MW plant in Gujarat, India.with a capacity increase of 500% to 1.2 GW. Namibia Germany leads for total capacity of facilities larger thanand South Africa constructed large solar parks in 2012, 30 MW, with a cumulative 1.55 GW in operation byand Chinese solar companies have been operating in at year’s end, followed by the US, France, India, Ukraine,least 20 African countries spurring demands for Chinese China, and Italy.exports. In the middle-east and North African region, the The concentrating PV (CPV) market is still relativelysolar PV market is relatively small. The Southeast Asian small, nevertheless the interest is increasing. In 2012,region has been dominated by Thailand, but markets more than 100 plants totalling as much as 100 MW wereelsewhere in the region are starting to bloom. operating in at least 20 countries worldwide. The largest A vast proportion of world’s PV capacity is grid- capacity with 30 MW is in Colorado, followed by Spain,connected, with off-grid capacity accounting for an China and Chinese Taipei/Taiwan, Italy, and Australia.estimated 1% of the market, down from more than 90% The CPV market is also expanding in North Africa, thetwo decades ago. The market for building-integrated PV Middle East, and South America.(BIPV) constitutes less than 1% of solar PV capacity,Figure 7.19 Market shares of top 15 solar PV module manufacturers in 2012 (based on 35.5 GW produced in 2012)Source: www.ren21.net 154

MEGA SCIENCE 2.0 Electrical & Electronics Sector Figure 7.19 shows the global market shares of top 7.4.2 SOLAR THERMAL MARKET AND TRENDS15 solar PV module manufacturers in 2012, with 11 of Solar thermal technologies contribute significantly tothese companies hailing from Asia. The industry has a water heating in many countries, and increasingly todynamic landscape with constantly changing players. space heating and cooling, as well as for industrialOver the past 15 years, leadership in PV module processes. In 2011, nearly 51 GWth was added to theproduction, which began with the US, moved to Japan, world capacity (Figure 7.20), ending with total of 247then to Europe, and currently to Asia. In 2012, Asian GWth. Glazed water systems formed an estimated 49countries produced 86% of global market (up from 2% GWth (>96%) of the market, and the rest was unglazedin 2011), with China producing almost two-thirds of the for swimming pool heating, as well as unglazed andworld’s total. European market share has continued glazed air collector systems.to fall, from 14% in 2011 to 11% in 2012; and Japan’s China and Europe are the world’s largest solar thermalshare has dropped from 6% to 5%. The US share market, collectively accounting more than 90% of theremains at 3%, with thin-film PV accounting for 29% of market and 81% of total capacity in 2011 (Figure 7.21).US production, down from 41% in 2011. China, US, Germany, Turkey, and Brazil were the top Solar PV manufacturers continue to face formidable countries for total operating capacity. The glazed waterchallenges to remain profitable. More than 20 US system market grew 15%, and total global capacity inmanufacturers have left the industry in recent years operation by the end of 2011 was 223 GWth (Figuredue to production overcapacity, and an estimated 10 7.22), providing an estimated 193 TWh (696 PJ) of heatEuropean and 50 Chinese manufacturers went out annually.of business in 2012. China’s top 10 manufacturersborrowed almost USD 20 billion from national banks, Figure 7.20 Solar water heating global capacity additions;while Suntech Power’s main operating subsidiary shares of top 12 countries in 2011 (Total Added ~49 GWth)declared bankruptcy in early 2013. Source: www.ren21.net Well-established corporations are not spared fromeconomic turmoil. First Solar and Panasonic closedproduction lines; GE halted construction on its thin-film factory in Colorado; Bosch Solar announced that itwould stop making cells and panels in 2014; Siemensannounced closure of its solar business; and HanwhaGroup acquired the bankrupt Q-Cells, once a topmodule manufacturer in 2007. Most companies thatremained were investing in improving manufacturingprocesses and yield, rather than R&D, to minimise theircosts. Nevertheless, even as some corporations wentout of business, others have ventured into new marketsin the developing world. In 2012 to 2013, new PVmanufacturing plants were opened in Europe, Turkey,Kazakhstan, Japan, Malaysia, US and Ethiopia’s. 155

MEGA SCIENCE 2.0 Electrical & Electronics Sector Germany was Europe’s largest installer in 2012, adding 805 MWth for a total of 11.4 GWth. Japan and India are the largest Asian markets outside of China. 7.5 CURRENT STATUS OF MALAYSIAN SOLAR ENERGY SECTOR 7.5.1 NATIONAL POLICIES FOR PROMOTING SOLAR ENERGYFigure 7.21 Solar water heating global capacity by shares of Malaysia has implemented a number of specific top 12 countries in 2011 (total capacity ~223 GW th) policies, and has set up a national council to support and promote renewable energies. These include theSource: www.ren21.net Malaysian Renewable Energy Policy, the National Green Technology Policy, and the Green Technology Figure 7.22 Solar water heating global capacity, 2000–2012 and Climate Change Council. The MalaysianSource: www.ren21.net Renewable Energy Policy is aimed at enhancing the The 2011 market leaders for newly installed glazed utilisation of indigenous renewable energy resourceswater collector capacity were China, Turkey, Germany, to contribute towards national electricity supply securityIndia, and Brazil, which were the same countries leading and sustainable socio-economic development. The fivefor total capacity. At end of 2012, global solar thermal key strategic thrusts of the policy are as follows:capacity in operation reached an estimated 282 GWth. Thrust 1: To introduce a legal and regulatory frameworkGlobal capacity of glazed water collectors reached 255 Thrust 2: To create a conducive business environment GWth. China was again the main driver of solar thermal for REdemand, adding 44.7 GWth. China’s total capacity rose Thrust 3: To intensify human capital development17.6% (net 27.3 GWth), to 180.4 GWth, which amounts Thrust 4: To enhance RE research and developmentto about 69% of global capacity. European countries Thrust 5: To create public awareness and advocacyaccounted for most of the remaining added capacity. programs The policy has the following five specific objectives: 1. To increase RE contribution in the national power generation mix in order to reduce dependency on fossil fuel, contributing towards energy security; 2. To promote the growth of the RE industry and increase its contribution towards the national economy – creating a new industry which will provide new job opportunities; 156

MEGA SCIENCE 2.0 Electrical & Electronics Sector3. To enhance competitiveness of RE against 2. Widespread availability and recognition of Green conventional energy – this will happen when RE Technology in terms of products, appliances, electricity achieves grid parity where the cost of equipment and systems in the local market through RE power is equivalent to the cost of generating standards, rating and labelling programs; Increased electricity using conventional sources; foreign and domestic direct investments (FDIs and DDIs) in Green Technology manufacturing and4. To conserve the environment for future generation services sectors; by reducing GHG emission from fossil fuel such as gas and coal; and 3. Expansion of local research institutes and institutions of higher learning to expand RDI activities on Green5. To enhance awareness on the role and importance Technology towards commercialisation through of RE by getting the buy-ins from the public and appropriate mechanisms. decision makers to opt for green energy. Climate change is an issue that is high on the agenda The National Green Technology Policy embodies of the Malaysian government. A Green Technologyelements of economic, environment and social policies, and Climate Change Council, chaired by the Primeas reflected in the five objectives as follows: Minister, has been tasked to formulate policies and measures on climate change. The implementation of1. To minimise growth of energy consumption while the Climate Change Policy is aimed at driving efforts enhancing economic development; to reduce emissions and contribute to the larger agenda of resolving the issue of climate change.2. To facilitate the growth of the Green Technology industry and enhance its contribution to the national 7.5.2 LOCAL MARKET OF SOLAR ENERGY economy; INSTALLATIONS3. To increase national capability and capacity for Malaysia’s domestic market for solar energy systems innovation in Green Technology development and appears to be experiencing encouraging growth over enhance Malaysia’s competitiveness in Green the past recent years, driven by feed-in-tariff (FiT) Technology in the global arena; program which allows electricity that is produced from indigenous RE resources to be sold to power utilities at4. To ensure sustainable development and conserve a fixed premium price for a specific duration. the environment for future generations; and FiT policies have been very effective in Germany,5. To enhance public education and awareness on Spain, and Denmark in stimulating their domestic Green Technology and encourage its widespread renewable energy markets, with the long-term aim of use. achieving grid-parity (the point at which alternative means of generating electricity is equal in cost orThe national goals of the Green Technology Policy are cheaper than the conventional grid power). Figure 7.23to provide direction and motivation for Malaysians to shows the grid parity projected for Europe, US, Japan,continuously enjoy good quality living and a healthy and Asian countriesenvironment. The short-term goals, related to RE, of the10th Malaysia Plan are as follows:1. To increase public awareness and commitment for the adoption and application of Green Technology through advocacy programs; 157

MEGA SCIENCE 2.0 Electrical & Electronics Sector Figure 7.23 Projected point of grid parity for Europe, US and Asian countriesSource: BP REC. Figure 7.24 FiT digression: Towards grid paritySource: Ministry of Energy, Green Technology and Water. 158

MEGA SCIENCE 2.0 Electrical & Electronics SectorTable 7.3 RE Fund cash flowSource: Ministry of Energy, Green Technology and WaterFigure 7.25 Cumulative projected renewable energy installations (2010 – 2050)Source: Ministry of Energy, Green Technology and Water 159

MEGA SCIENCE 2.0 Electrical & Electronics Sector Table 7.4 Projected Renewable Energy Growth (2010 – 2050)Year Cum Biomass Cum Biogas Cum Mini- Cum Solar PV Cum Total RE, (MW) (MW) Hydro (MW) (MW) Cum SW (MW) Grid-Connected20112012 110 20 60 7 (MW)2015 150 35 110 15 20 2172020 330 100 290 552025 800 240 490 175 50 3602030 1,190 350 490 399 200 9752035 1,340 410 490 854 360 2,0652040 1,340 410 490 1,677 380 2,8092045 1,340 410 490 3,079 390 3,4842050 1,340 410 490 5,374 400 4,317 1,340 410 490 8,874 410 5,729 420 8,034 430 11,544Assumptions:1. RE Technical potential: Biomass (EFB, agriculture): 1,340 MW will be reached by 2028 Biogas (POME, agriculture, farm): 410 MW will be reached by 2028 Mini-hydro (not exceeding 30 MW): 490 MW will be reached by 2020 Solar PV (grid-connected): unlimited. Solid waste (RDF, incineration, sanitary landfill): 378 MW will be reached by 2024 (at 30,000 tonne,day of Solid Waste projected by KPKT, followed by 3% annual growth post 2024).Source: Ministry of Energy, Green Technology and Water According to the latest data from Sustainable Energy Development Authority of Malaysia (SEDA), Malaysia With the ultimate aim of achieving grid-parity around has a cumulative solar PV installed capacity of 88the year 2020 to 2030, Malaysia’s FiT rates (Figure MW, annually generating 45 GWhr of power. When7.24) are set to encourage private investments in RE compared as a percentage of total electricity demand,and to enlarge the local market for renewable energy Malaysia’s solar PV energy output currently lags behindsystems. The rates are fixed for a period of typically 20 the neighbouring countries of Thailand, China, Koreayears to give a form of financial certainty and provide and India, which is indicates that Malaysian solar energybusinesses with clear investment environment. A special market is currently underdeveloped.RE fund (Table 7.3) was created to pay for the FIT rates 7.5.3 LOCAL INDUSTRY PLAYERS(at incremental costs) and guarantee the payment for The Malaysian government has dedicated massivethe whole FIT contract period.) was created to pay for investments to jump start the local solar energy industry.the FIT rates (at incremental costs) and guarantee the Some of the world’s most advanced solar PV firms —payment for the whole FIT contract period. First Solar (US), SunPower (US), Q-Cells (Germany) The Malaysian Ministry of Energy, Green Technology — have established their manufacturing facilities inand Water has developed a projection for electricity Malaysia, mainly incentivised by the low manufacturinggenerated from renewable resources, from the year 2010 costs. Their finished products are PV cells and modulesto 2050. Figure 7.25 and Table 7.4 show the projected are then exported out for integration and installation.cumulative renewable energy system installations for Besides the foreign-owned solar PV corporations, thethe said period. Going by the projections, Malaysia will local solar energy industry is also participated by ahave a cumulative RE installations of 11.5 GW by theyear 2050, with nearly 80% of the bulk generated bysolar PV. However, the projection does not include solarthermal applications. 160