ENERGY CONSERVATION FOR

MALAYSIA(ECMY4)

BARRIERS IN IMPLEMENTING ENERGY EFFICIENCY AND ENERGY

CONSERVATION ACTIVITIES :

THE ABSENCE OF COMPREHENSIVE EE&EC POLICY AND LAW

Group name: Group A

27 June 2008

GROUP MEMBERS

Zaini Abdul Wahab – Energy Commission (Group Leader and Presenter)

Gopal Narian Kutty – Public Works Department

Noor Maya Abdul Wahab – Malaysia Energy Centre

Dzainul Khalid – Tenaga Nasional Bhd

Nor Hisham Sabran - Malaysia Energy Centre

Saharudin Savee - Malaysia Energy Centre

Kamal Jumblatt Mohd Afendi – Department of Occupational Safety and Health.

CONTENT

1. EXISTING SCENARIO OF EE & EC IMPLEMENTATION

ACTIVITIES IN MALAYSIA

2. THE EXISTING ENERGY RELATED POLICIES

3. THE EXISTING EE RELATED PROVISIONS IN THE LAWS

4. WHY EE&EC POLICY AND LEGISLATION NEEDED

5. AREAS TO BE COVERED IN THE NEW E & EC POLICY

6. AREAS TO BE COVERED IN THE NEW EE & EC LAW

7. THE IMPLEMENTATION PLAN

8. ACTIONS TO SUPPORT IMPLEMENTATION OF THE NEW EE&EC

POLICY AND LAW

9. THE CONCLUSION

1. THE EXISTING SCENARIO OF THE

IMPLEMENTATION OF EE & EC ACTIVITIES(1/2)

1. Initiated and executed by many parties ( government & international

agencies, NGOs, private sectors) without any specific and long term policy

and legal requirements to be followed.

2. On project basis and no continuation once completed and projects owned

by various organizations with their own defined objectives and goals-lacking

of long term coordination and collaboration in specific areas.

3. No standards recognized by the authorities and followed in EE&EC

services, equipment and appliances and no certification system for the

competency of EE & EC professionals/practitioners recognized and

authorized by the government.

4. Lack of funding sources and confidence to fund EE&EC projects by

financial institutions.

5. Energy price (electricity and fuel) is still being made understood and

promoted as among the lowest in the region- create “cushioned” impact

resulted from actual global environment among general public.

1. THE EXISTING SCENARIO OF THE

IMPLEMENTATION OF EE & EC ACTIVITIES(2/2)

6. Variety of standards and qualities of services provided by EE & EC services

industry- lack of confidence among interested parties such as high energy

users (e.g: high cost charged by EE & EC service providers for energy

audits)

7. No urgency among the utility companies due to supply of electricity is more

than demand (big reserve).

8. Bureaucracy issues in the processing procedures in fiscal incentives such as

pioneer status, ITA, import duty and sales taxes exemption offered by the

government.

9. Lacking of certified competent persons in EE& EC delivery due to

unavailability of national competency program.

10. Many studies on EE & EC carried out by many foreign government

agencies and organizations but not translated into comprehensive long term

plan for implementation (UNDP,JICA, DANIDA).

2. THE EXISTING

ENERGY RELATED POLICIES (1/4)

NATIONAL ENERGY POLICY OBJECTIVES

The Supply Objective To ensure the provision of adequate, secure and cost-effective energy supplies through developing indigenous energy resources both non-renewable and renewable energy resources using the latest cost options and diversification of supply sources both from within and outside the country;

The Utilization Objective To promote the efficient utilization of energy and discourage wasteful and non-productive patterns of energy consumption; and

The Environmental Objective To minimize the negative impacts of energy production, transportation, conversion, utilization and consumption on the environment.

2.THE EXISTING

ENERGY RELATED POLICIES (2/4)

NATIONAL DEPLETION POLICY

The policy, aimed at major oil fields of over 400 million barrels of oil initially in

place (OIIP), restricted their productions to 1.75 per cent of OIIP. At the

current production rate, proven oil reserves are expected to last another 16

years.

Gas reserves -At the current rate of production, known natural gas reserves are

expected to last for about 70 years.

2. THE EXISTING

EE & EC RELATED POLICIES (3/4)

9th MALAYSIAN PLAN (2006-2010) - Chapter 19: Sustainable Energy

Development (Energy Efficiency)

The implementation of energy efficiency (EE) programs will focus on energy saving features in the industrial and commercial sectors and EE features such as efficient lighting and air conditioning systems as well as establishing a comprehensive energy management system will be encouraged.

The industrial sector will be encouraged to implement EE measures including improvements in plant, equipment and processes and efforts will be undertaken to introduce the Efficient Management of Electrical Energy Regulations, amend the Uniform Building By-laws (UBBL), label electrical appliances and use high-efficiency motors. Initiatives to develop local expertise in the manufacture of EE equipment and machineries as new sources of growth will also be supported.

Efforts will be undertaken to enhance awareness on EE and suitable courses on RE and EE for institutions of higher education will be developed.

2. THE EXISTING

EE & EC RELATED POLICIES (4/4)

9th MALAYSIAN PLAN (2006-2010) - Chapter 19: Sustainable Energy

Development (Energy Efficiency)

Specialized courses on energy planning and management will be introduced to enhance the capacity of professionals in energy-related management.

To promote greater EE in Government buildings, good energy practices such as optimal lighting and air-conditioning will be adopted and energy audits will be conducted in Government buildings to identify additional measures that can be implemented to further improve EE.

To further support the implementation of RE and EE initiatives, existing financial and fiscal incentives such as Accelerated Capital Allowance will be improved during the Plan period.

3. THE EXISTING EE&EC RELATED

PROVISIONS IN THE LAWS(1/2)

ELECTRICITY SUPPLY ACT 1990

Section 4: Functions And Duties (la) to promote the efficient use of electricity

Part VA Efficient Use Of Electricity Section 23a. Minister To Determine Standards, Etc. The Minister may, from time to time, prescribe the standards, specifications, practices

and measures to be adopted and any other matters in respect of the efficient use of electricity.

Section 23b. Installation To Meet Requirements. No person shall use or operate any installation unless the installation meets such

requirements as may be prescribed in respect of the efficient use of electricity.

Section 23c. Equipment To Meet Requirements. No person shall manufacture, import, sell or offer for sale or lease any equipment

unless the equipment meets such requirements as may be prescribed in respect of the efficient use of electricity.

3. THE EXISTING EE&EC RELATED

PROVISIONS IN THE LAWS(2/2)

ENERGY COMMISSION ACT 2001

Section 4

(g) to promote efficiency, economy and safety in the generation, production, transmission, distribution supply and use of electricity and the use of gas through pipelines and the use of gas supplied through pipelines

(i) to promote the use of renewable energy and the conservation of no-renewable energy

(j) to promote into, and the development and the use of new technologies related to-

(i) the generation, production, transmission, distribution supply and use of electricity; and

(ii) the use of gas through pipelines and the use of gas supplied through pipelines.

4. WHY SPECIFIC EE&EC POLICY AND

LEGISLATION NEEDED (1/2)

1. To have comprehensive and dedicated approaches with comprehensive policy and legal framework with regard to EE & EC – key elements to drive implementation activities.

2. To define meanings of EE & EC and roles of respective parties involved from government agencies due to energy related issues are under the purview of various ministries.

3. To avoid overlapping/redundancy of roles played by government agencies, institutions, private sectors, NGOs and etc.

4. To enable the development of the implementation mechanisms by government agencies based on their jurisdictions.

5. No enforcement powers for the authority to ensure EE & EC targets achieved.

6. To ensure allocation of resources and financial support for EE & EC activities with more established , simplified and effective procedures.

4. WHY SPECIFIC EE&EC POLICY AND

LEGISLATION NEEDED (2/2)

7. To ensure continuity of projects/program implemented.

8. To have standards to measure and monitor of the actual impacts of each

EE&EC activities.

9. Specific policy and legislation proven to be effective in other areas such as

safe &health (OSHA 1994) and environment protection (EQA 1974).

10. Specific policy and legislation proven to be effective in implementing EE &

EC in other countries such as Japan (Energy Conservation Act 1979),

Thailand (Energy Conservation Promotion Act 1992) and India.

11. The avoid Malaysia become “ dumping sites” for energy inefficient

products.

12. To ensure efficient utilization of energy use and the country’s resources to

remain sustainable and competitive.

5. AREAS TO BE COVERED IN THE

NEW EE&EC POLICY

POLICY

1. Energy Conservation target for the country

mid-long term

2. Target areas

Electricity and fuel users (people and equipment)

3. Target groups

Demand side ( high energy users for factories and buildings, transportation)

6. AREAS TO BE COVERED IN THE

NEW EE&EC LAW

LEGISLATION

1. Competency (energy managers, auditors, ESCOs)

2. Standards and labeling for equipment and appliances

3. Promotion and education on EE & EC activities and technology

development.

4. Funding sources and distribution mechanisms

5. Punishments and monetary penalties

7. THE IMPLEMENTATION PLAN

1. Proposed Organizational Structure

2. The Implementation Steps Flow Chart

3. Implementation Tasks And Timeline

Implementation Gantt Chart

1. To convince/lobby the policy makers on the urgency to have a political will

in introducing and implementation of EE & EC policy and legislation for

the country.

2. To capitalize on the global factors and forces such as fuel price increase

(created urgency) and success stories of other countries by having clear EE

& EC policies and laws in their implementation approaches (comparison

analysis).

3. To establish one centralized agency to oversee the planning,

implementation and monitoring of EE& EE activities and its performance.

4. To create a pool of experts and competent persons in the EE& EC to

ensure higher delivery standards and to prepare for the implementation of

the new policy and laws.

8. ACTIONS TO SUPPORT

THE IMPLEMENTATION OF

NEW EE&EC POLICY AND LAW (1/2)

8. ACTIONS TO SUPPORT

THE IMPLEMENTATION OF

NEW EE&EC POLICY AND LAW (2/2)

5. To have more promotions to create awareness and showcases of more successful EE&EC activities in high energy users within their specific industry groups.

6. Continuously developing standards and best practices information according to Malaysian environment.

7. To have more promotion and awareness program on new technologies and technology development in EE & EC equipment, appliances and vehicles .

9. THE CONCLUSION

Malaysia needs a comprehensive and specific EE

& EC policy and legislation framework

URGENTLY.

The establishment of a Centralized Agency to

oversee the implementation of EE & EC

activities is very important.

Thank you for your attention

and a special thanks and appreciation to ECCJ

team of experts for guidance and knowledge

shared.