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Energy MBIPV: Malaysia Building Integrated Photovoltaics WITH the Malaysian economy out of the economic downturn of 1997-2000 that hit the ASEAN region, coupled with an optimistic medium-term outlook of the Malaysian economy, future demand for electricity is expected to increase significantly. In future, demand is forecasted to grow at an average rate of 6 to 8% per annum. System peak demand is forecasted to increase from 10 GW in 2000 to 15 GW in 2005 and 22 GW in 2010 for the peninsula. A total of 10 GW of new generation capacity will be planted up and commissioned between 2003 until the year 2010, 6 GW will be coal fired power plants and the remaining 4 GW will be natural gas-fired power plants. This additional coal and gas-fired generators (10 GW in total) will emit from 2010, additional 34 million tons CO 2 (coal) and 8 million tons CO 2 (gas) per year. This will lead to a tremendous increase in GHG emissions, thus causing more serious problem to the global environment. To mitigate the problem, Malaysia is increasing its efforts to promote renewable energy and energy efficiency, especially in buildings. Malaysia has one of the fastest growing building industries worldwide, where the corresponding energy demand would significantly increase in the next coming years. Conducive conditions such as forecast increase in electricity demand, available building spaces and the huge untapped solar energy potential point clearly towards an implementation of the BIPV (Building Integrated Photovoltaic) technology in Malaysia. Considering the synergies and benefits of BIPV application, the technology will have an important and sustainable impact to the buildings market and is able to substitute part of the conventional fossil-fired electricity generators. There is a growing awareness and concern in the supply of energy particularly on the issue of carbon emissions and global warming. Under the Third Outline Perspective Plan (OPP3), the government is undertaking efforts to manage both non-renewable and renewable energy (RE) resources to cater for the demand of the rapidly growing economy. Furthermore, to supplement the conventional supply of energy, new sources of energy such as renewable energy (RE) are being encouraged. Thus, the OPP3 has adopted RE as Photovoltaic Architecture Malaysia’s fifth fuel resource, in addition to oil, gas, coal and hydro-power. The baseline scenario shows that currently, biomass is being actively developed as RE resource due to its availability. Other RE resource such as solar energy, in general, and solar energy applications like grid-connected BIPV, in particular, has remained in the sidelines mainly due to its relatively high cost. In the case of grid-connected BIPV, there is a perception that the technology is ‘exotic’ and ‘unproven’ in Malaysia. Initial assessment indicated that the current business environment does not support widespread adoption of grid-connected BIPV technology as a commercially viable RE technology in Malaysia, despite the fact that the BIPV performance is better and the absolute energy cost is lower that those systems installed in Europe and Japan. Due to the present high initial price and lack of the enabling environment, the economics of the BIPV technology is unattractive. However, the technology price can only be reduced when there is a sustainable BIPV market. Unfortunately, a sustainable market cannot be established for as long as the economics of the technology is unfavorable. Thus, it is a ‘chicken and egg’ situation. Without appropriate activities in the establishment of an enabling environment for BIPV – both for the public and private sectors – the current state-of-affairs will undoubtedly lead to uncoordinated efforts, characterised by no improvement in quality issues, policy and institutional deficiencies, inadequate investment in improving the technical skills and no cost reduction for the technology. A sustainable market and thus cost reduction achieved through improvement of technical skills, better procurement and lower transaction costs, scale of volume and local manufacturing cannot be established without the appropriate activities. Project Rationale, Objective, Outputs and Activities The Malaysia Building Integrated Photovoltaic (BIPV) Technology Application Project, MBIPV, is intended to induce the long-term cost reduction of the non-emitting GHG technology (i.e. the Net-Metering photovoltaic or PV) via integration of the PV technology within building designs and envelopes. It is aimed at creating a sustainable BIPV market in Malaysia that will generate widespread BIPV applications. Over the lifetime of the expected installed BIPV capacity from the project, the energy generated will avoid 65,100 tons of CO 2 emissions from the country’s power sector, in addition to contributing towards the national energy policy objectives. The MBIPV project will specifically focus on the market development for BIPV technology, and building the national capacities on three major areas: (a) policy and education; (b) technical skill and market implementation; (c) technology development support. The project will catalyse BIPV technology acceptance among the public, policy makers, financiers and building industry, which will lead towards a sustainable BIPV market beyond the completion of the project. The project objectives will be achieved via a multi-pronged approach: (1) BIPV information services, awareness and capacity building programs; (2) BIPV market enhancement and infrastructure development; (3) BIPV policies and financing mechanisms program; (4) BIPV Industry Development and R&D enhancement program. Key Indicators, Assumption and Risks The project’s key success indicators are: (1) Total GHG emissions avoided from the power sector is about 65,100 tons CO 2 over the lifetime of the installed BIPV capacity by the year 2010, relative to the baseline in the year 2005; (2) Increased installed BIPV capacity by about 330% over the project implementation period, resulting from 1.5 MWp of new BIPV capacity by the year 2010; (3) Reduced cost of BIPV technology by about 20% by the year 2010, relative to the baseline in the year 2005; (4) About 30% annual growth of BIPV capacity and average 30% BIPV cost reduction, from year 2010 to 2020, made possible by the integration and implementation of National BIPV programs in the 10 th Malaysia Plan (2011-2015). The major assumptions in achieving the project goal and purpose are: (1) International BIPV markets and industries grow according to business as usual; (2) The owners of the BIPV installations comply with the monitoring and reporting requirements of the project; (3) Estimation of GHG emissions reduction from various sources are consistent and reliable; (4) Strong interest, support and commitment from the Government and industry. The overall project risk is moderate. The different levels of risks that were identified during the project formulation are as follows: (1) Lack of competency, awareness and interest from the government sector – moderate risk; (2) Lack of cooperation by the private sector – moderate risk; (3) Technology risk – low risk; (4) Market risk – moderate risk. In terms of country eligibility, Malaysia has ratified the UNFCCC on 13 July 1994. The Third Outline Perspective Plan (OPP3) and the Eighth Malaysia Plan (8 th MP) are the two main policy references for the promotion and development of renewable energy (RE) in Malaysia. The main thrusts of OPP3 are: (a) To ensure adequate, secure, quality and cost-effective supply of energy; (b) To promote efficient energy utilisation and minimise negative impacts on the environment; (c) To encourage utilisation of renewable energy (RE) to supplement the conventional energy supply. The Fifth Fuel Policy introduced in the year 2000 under the 8 th MP, identified RE as Malaysia’s fifth fuel in addition to gas, oil, coal and hydro. The Malaysian Government has also set a target to achieve 5% of the national electricity production (about 600 MW) from RE by 2005. The UNDP-GEF supported MIEEIP and Biogen projects are clear manifestations of Malaysia’s commitment to reduce GHG emissions from energy-related development and economic activities. Building integrated photovoltaic (BIPV) provides opportunity to utilise RE in urban areas where the bulk of the nation’s electricity is consumed. BIPV involves integration of PV systems into building envelopes and also promotes demand-side management. BIPV can technically generate 11 GWp of electricity, based on the available roof spaces from the Malaysia’s residential and commercial building sectors. This technical potential capacity could produce more than 12,000 GWh of peak electricity and cover 20% of the current national electricity demand. As part of the RE development under the Fifth Fuel Policy, the Ministry of Energy, Communications and Multimedia (MECM) recognises the long-term potential of solar energy, especially for PV in buildings, which will require 10 <strong>ICA</strong> Volume 1 Issue 1 2007
Energy different institutional supports in comparison to the Biomass application. The GOM, through the MECM is committed to implement the MBIPV project with the support and assistance from the GEF in order to realize this long-term solar energy potential in Malaysia. A PV system, either a stand-alone or a gridconnected, is classified as a BIPV system whenever the PV is aesthetically integrated into the building architecture and envelope. Most of the BIPV applications today are grid-connected systems that are applied in urban areas. The stand-alone PV is a system installation that requires a battery to operate and is mostly applied in remote areas. A standalone PV only produces electricity for the intended use (e.g., household electricity consumption, telecommunication systems and navigational systems). A building integrated PV (BIPV) system will not only produce electricity, but will also be an integral part of the building envelope, with a specific function (e.g. window shading device, roof, decorative building façade). Hence, the substituted building materials will partially offset the BIPV technology cost. Also, land space for the technology application will not be an issue. BIPV systems, in almost all cases, will also improve the aesthetic exterior appearance of the building. The most important benefits of BIPV, especially in urban areas, will be the opportunity to utilize PV technology without the need of land-use. As the Solar Panels on Residential Building cost of land is significant in urban areas, BIPV will allow the utilization of PV technology to generate electricity without incurring the additional cost of the land-use. BIPV is a different technology approach compared to a stand-alone PV application. It is well accepted among the PV industry that BIPV offers greater benefits in comparison to stand-alone PV application. A sustainable BIPV market means that the prospective users of the technology can afford and will continue to apply the technology. Such customers are available in the urban areas. Thus, urban BIPV application will provide greater chances of success in comparison to stand-alone PV, which are mainly applied in remote locations. The MBIPV project will catalyse the wider adoption of grid-connected BIPV applications. The project strategies focus on implementation of cost-reduction and capacity building activities, which include showcases of BIPV to demonstrate various possibilities and essential references in utilising BIPV technology. In parallel, information dissemination and promotion activities will be carried out. The various project components are designed specifically to achieve the longterm cost reduction of grid-connected BIPV applications in Malaysia. The activities are intended to build on the existing capacity already available in Malaysia. The combined effects of the MBIPV project activities are expected to ‘jump-start’ BIPV applications and BIPV market in Malaysia. The goal of the project is to reduce the annual growth rate of GHG emissions from fossil fuel-fired power generators, via the widespread implementation of BIPV application to replace part of the current fossil fuel use, and via the cost reduction of the BIPV technology. The project purpose is to significantly improve the overall capacity of government and private sectors, to develop, design and utilise BIPV energy potential, as well as to develop local BIPV industry. It will address the GEF strategic priority on market aggregation, product innovation and capacity building specifically for BIPV technology. The proposed project is made up of four components that will address in an integrated manner the long-term cost reduction of BIPV technology, and the adoption of supportive regulatory frameworks for BIPV sustainability and replicability. Financial Modality and Cost Effectiveness Sustainability is an integral element of the MBIPV project, and it is ensured through the outputs of the project components. The National PV Council (NPVC), which will be industry driven, will continue to spearhead and sustain the activities after the project life. The Malaysia Energy Center (PTM), as the government’s think-tank on energy related issues, will become the advocate and catalyst for BIPV development within the national framework. The improved capacity of the local industry – together with the availability of standards, training modules and resource center – will ensure that the local players can continue to design and install BIPV systems. The developed BIPV policy and financing mechanisms (including an attractive buyback tariff) will ensure continuous and sustainable follow-up BIPV programs within the 10th Malaysia Plan and subsequent five- year development plans of the country. During the PDF-B project activities, a large number of stakeholders have been consulted in the formulation of the project. Overall, more than 120 different stakeholders were involved during the LFA workshops, in addition to numerous stakeholders’ meetings and participation of more than 220 participants during the national BIPV seminar. These stakeholders include government agencies, financial institutions, power utilities, service providers, PV manufacturers, project developers, architects, professionals associations, NGOs and others. To continue with this broad consulting approach, the MBIPV project will draw upon the NPVC to induce participation and represent those stakeholders, as well as providing links to other national and international institutions. Excluding the PDF-B activities, the total estimated MBIPV project cost is US$ 24,959,160. From this, a total of US$ 20,259,740 (51% cash and 30% in-kind) will be used for baseline activities. The rest (US$ 4,699,420) are for the incremental activities that will be supported by the GEF. The Government of Malaysia and the private sector (national and international) will co-finance the baseline cost. The US$ 4,699,420 fund request from GEF will be utilised as follows: (a) US$ 2,551,000 (54%) for personnel and mission costs to implement all project component activities; (b) US$ 764,210 (16%) for various capacity building and training activities; (c) US$ 1,200,000 (26%) for enhancement of the local market and purchase of the necessary BIPV equipment and hardware; (d) US$ 184,210 (4%) for subcontract and sub-consultancy costs to undertake various surveys and business development models. ❏ PROJECT FACTS: Agency’s Project ID: 2754 Country: Malaysia Project Title: Building Integrated Photovoltaic (BiPV) Technology Application Project GEF Agency: United Nations Development Programme (UNDP) Duration: Five Years GEF Focal Area: Climate Change GEF Operational Programme: OP-7; Reduction of Long-Term Costs of Low Greenhouse Gas-Emitting Energy Technologies GEF Strategic Priority: (S5) Global Market Aggregation and National Innovation for Emerging Technologies <strong>ICA</strong> Volume 1 Issue 1 2007 11
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