Malaysia - SETatWork - Sustainable Energy Technology at Work

1.1 Malaysia Energy Policy
Energy has contributed significantly towards the rapid growth of the Malaysian economy.
Today, about 80% of Malaysia’s total population lives in Peninsular Malaysia, the hub of
the country’s economic activities. As Malaysia progresses towards becoming a developed
country, energy consumption will correspondingly increase. In meeting increasing energy
demand, concerted efforts have been undertaken to ensure greater security and
sustainability of energy supply. Consumption of energy however produces some
undesirable impacts on the environment and climate. Hence, sustainable use of energy is
being given attention in Malaysia.
Malaysia energy policy came in the 70’s, a time of rising crude oil prices and discovery of
new oil sources in the Peninsular Malaysia. A Petroleum Development Act (PDA) was
enacted in 1974 and followed by the National Petroleum Policy in 1975. However, a more
comprehensive national policy on energy came in 1979. This National Energy Policy
contains three principal policy objectives to guide future energy policy sector
development. They are as follows:
• Energy Supply: Assurance of adequate energy supply through the reduction of
the dependence on oil, and through the development and utilisation of
alternative sources of energy.
• Energy Utilisation: Promotion and encouragement of the efficient use of
energy and the elimination of wasteful and non-productive patterns of energy
consumption.
• Environmental Conservation: Minimisation of environmental degradation in
realising the supply and utilisation objectives.
In relation to the reliability and security of energy supply, Four-Fuel Diversification Policy
was introduced in 1981, focusing on four main sources of fuel, namely oil, hydro, gas
and coal which was also aimed to reduce the dependency on oil in the energy
consumption, particularly in the power sector. This policy is then expended in the year
2005 to include renewable energy (RE) as the fifth fuel to supplement energy supply
from conventional energy resources.
1.2 Malaysia Energy Supply
For almost 20 years, Malaysia successfully diversified its energy consumption by taking
advantage of domestic energy resource endowments. Malaysia total oil reserves stood at
5.28 billion stock tank barrels (Bstb) (as at 1 st January 2006) with the remaining oil
reserves and current national oil production target of 600,000 barrels per day (bdp).
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