Clean Energy As An Upward Essential Despite Pandemic : Insights On The Energy Landscape Through The Malaysian Lens

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Opinion piece by Ko Chuan Zhen – Group CEO, Plus Xnergy Holding Sdn Bhd 

Clean energy has evolved in terms of adoption and investment all around the world, where it is now the cheapest form of electricity in the history (Carbon Brief, “Solar is now ‘cheapest electricity in history’, confirms IEA) and will double globally over the next five years and exceed that of both gas and coal(Carbon Brief,  “IEA: Wind and solar capacity will overtake both gas and coal globally by 2024.”)

Globally, policymakers and industry leaders have advocated for solar energy as it is an affordable and useful form of power in this pandemic, providing a source of sustainability for organisations, lowers electricity costs and adopting the Environmental, Social and Governance (ESG) principles.  

Based on solar energy’s global expansion, coming from the lens of a clean energy solutionist in Malaysia, we have observed thought-provoking trends within business owners that will apply to countries within the Asian-Pacific region. 

Malaysia’s geographical location is close to the equator, determining her supply and irradiance. The industry has evolved due to support from higher public awareness, reduction of solar modules prices, as well as clean energy policies and tax allowances of up to 48% for businesses who invest. We have seen the high adoption of solar within business owners following the full uptake of the Net Energy Metering Net Offset Virtual Aggregation (NOVA) scheme for commercial and industrial buildings, just three months after its’ launch in April. 

While the pandemic has delayed the demand of clean energy, we believe the clean energy will expand past solar, in terms of application, accessibility and generation. Based on research, experience and work with our clients, clean energy will evolve in the following forms: 

Solar Financing at $0 Upfront Cost

The upfront cost that comes with the solar photovoltaic (PV) system has been seen as a hefty price tag although the average cost of a solar panel has dropped by 90% from 2010 to 2020.(Bloomberg Green, “Solar Is Dirt-Cheap and About to Get Even More Powerful.”)

Businesses that struggle with cash flow during recurring lockdowns can benefit from Power Purchase Agreement (PPA) as they can gain recurring and reduced electricity tariffs at no upfront capital expenditure (CAPEX), over a 15–20-year lease-to-own tenure. Once mature, they can take full ownership of the systems and its benefits.

As this option emerges, green PPA has been adopted by big names such as Facebook, Google and more (Power Technology, “US tech giants to lead renewable energy business in the next five to ten years: Poll”)  in the effort to expand their renewable energy footprint.

AIoT for Smarter Building Energy Consumption

As buildings and building construction sectors are responsible for over one-third of the global energy consumption(IEA, “Buildings”) , solutions are needed to minimise the use of energy, while making use of the building’s energy data for better business decisions. 

Most commercial and industrial buildings operate at certain energy efficiencies, making it challenging for business owners to know if the building is at the peak energy efficiency or in an optimized energy-saving condition. AIoT solutions have been proven in Malaysia to not only ease the tedious process of energy managers, generate data in real-time, but also enable companies to gain up to 25% of energy savings.

To drive Malaysian businesses towards digitalisation, the Smart Automation Grant (SAG) was launched by the government that was awarded on a matching basis or 50% of total eligible expenditures of up to maximum grant cap of RM1mil per company. The SAG qualifications include meeting one of the committed deliverables such as reducing man hours, an increase in production volume and more.

Companies can take advantage of this grant, reduce its overall energy consumption, avoid Maximum Demand (MD) charges and increase business productivity, as well as performance. 

Battery Storage to Become More Liberalised 

Battery storage systems store energy produced by a commercial building or residential property to offer integrated energy conversion. Investors can not only reduce Maximum Demand (MD) charges, lower overall energy bill, but provide back-up supply in the event of a black out and improve the effectiveness of the microgrid. 

The systems store excess power that can be used whenever you need it, especially on days when there is a sudden surge in your load demand. For consumers that are getting electricity supply on peak or off-peak tariff, they can even store the energy during the off-peak period and utilise the stored energy during the peak period.

While the application of battery storage is not widely utilised in Malaysia, we foresee its growth especially with the availability of the tax allowance of 24%.* 

Conclusion

While solar financing at $0, AIoT and battery storage are emerging sustainable energy options, they are proof that solar is just the beginning. Not only will the evolution of clean energy take place in these forms in Malaysia but expand, bringing higher value and impact to the community, pushing the public and private sector to collaborate to make the energy future cleaner, smarter and better.

Opinion piece by Ko Chuan Zhen – Group CEO, Plus Xnergy Holding Sdn Bhd 

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