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Aussie Lessons: Importance of Smooth Transitions

Malaysia is on the path to a cleaner energy future, but ensuring that ambition works for everyone will require smart decisions in the current energy landscape. With recent targets to ensure renewable energy accounts for 30% of Malaysia’s energy mix by 2030, understanding that lesson will be crucial for success.

Today, renewable energy in Malaysia accounts for roughly 22.5% of the total energy mix. Solar power will have a big part to play in bridging the gap between today’s electricity landscape and the ambitions for tomorrow. The 11th Malaysia Plan targets solar contributing 1,250 MW of additional power to the nation by 2020, roughly a third of the total additional RE capacity.

Solar is set to play a key role in Malaysia’s emerging renewable future, but positioning that opportunity must be done correctly. So, what can we learn from Australia, and their own challenges in delivering reliable energy for the nation?


Australia’s energy challenge

Like most nations, Australia is committed to a more sustainable future. This commitment is framed in its pledge under the COP21 Paris Climate Agreement. In meeting their target to reduce greenhouse gas emissions by up to 28% below 2005 levels by 2030, Australia’s energy sector will require significant transformation. Renewable energy has been targeted as a major catalyst in this evolution.

Unfortunately, Australia has suffered a challenging transition towards increased focus on renewable energy. As a nation, Australia has traditionally relied on coal-fired power for the foundation of its electricity generation. The difficulties of balancing this coal power against increased environmental targets triggered an intended switch towards renewables.

Coal however provides a base load power that cannot easily and directly be replaced by sources such as solar.

Coal however provides a base load power that cannot easily and directly be replaced by sources such as solar. Managing this transition for Australia was intended through use of less carbon-intensive electricity supplied through natural gas. However, the implementation of this transition fell short, with installation of new power plants falling behind the national electricity needs.  Now Australia is not only home to the world’s most expensive energy prices, it’s heavily reliant on aging, legacy infrastructure with an uncertain path towards the future.

South Australia shows a particularly challenging case of the impending threat of a failing energy market. Aged coal-fired power plants have been mothballed, while renewable energy sources have increasingly been established to manage the strain. This is a positive step for a greener energy landscape, but has highlighted an obvious frailty in the ecosystem.

Without reliable base load power, this region of Australia has increasingly been reliant on a grid connection with neighbouring regions to stabilise the system. That exposure led to a crisis in 2016 when a huge storm broke the connections of South Australia to the national grid, cutting off the state from Australia’s wider energy grid. The result of this series of events was a regional power shortage and state-wide blackout that cost the region up to AU$367 million. This impact highlighted how a diversified electricity mix was crucial to sustainable supply.

Solar tomorrow needs smart decisions today

The cost of solar power globally has fallen 62% since 2009, and that trend is set to continue. In fact, the average cost of solar energy is set to be cheaper than coal globally by 2025. Emerging technologies such as battery storage and digital grid management will open up even wider potential for renewable power.

this is not a solution that can be turned on overnight.

Managing the opportunities of renewable energy as part of the wider energy mix is an important balancing act for national energy policy. Malaysia is embracing the opportunities of these technologies, and renewable energy such as solar will play a vital role in the future energy security of Malaysia. But this is not a solution that can be turned on overnight.

Malaysia’s journey so far shows a commitment to expanding the role of renewable energy. The 10th Malaysia Plan set out to increase renewable energy from less than 1% of the energy mix in 2009 to 5.5% by 2025. 2017’s target, with the inclusion of large-scale hydropower, aims to achieve renewables as 30% of the energy mix by 2030. This shows the greatly increased ambition and confidence in this renewable solution.

Solar will be an important part of the answer in the question of a balanced energy mix. As renewable technologies and opportunities continue to develop, so too does the ease of transition towards the goal of a more sustainable Malaysia.

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