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Malaysia’s Large Scale Solar (LSS) : Need Technology Security for Energy Security

Updated: Mar 13, 2019



INTRODUCTION - On 15 February 2019, the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC), Government of Malaysia has opened the offer to develop the Large Scale Solar 3 (LSS 3) Projects, with total capacity 500MW in Peninsular Malaysia. This initiative is to support the overall national target of 20% of energy production by 2025, through renewable energy. This effort will be implemented through a competitive and open bidding process.


This is a proactive move by the Government to strengthen the future energy security and opening up further market opportunities for private sector with a total investments of approximately RM 2.4 Billion. This will also strengthen the growth of renewable energy industry in Malaysia.


Since the commencement on LSS 1 and LSS2 since 2016, a planned total of 958MW was awarded and currently in progress. However, the commercialized Malaysian technology capability in this renewable energy space is extremely low.


PERCENTAGE OF COST DISTRIBUTION FOR A TYPICAL LSS PROJECT IN MALAYSIA

CASE FOR TECHNOLOGY SECURITY - For future sustainability of our energy security, there also need to be a concurrent effort to increase the local content in the key areas of Solar PV such as technology capability in solar panel, energy storage and inverters.


In LSS1 and LSS2, it was observed that the Malaysian capability is primarily in the scope of Balance of Systems (BOS) which consists of approximately 15% of LSS project cost. The other key areas namely solar panel, energy storage and inverters are utilizing imported technologies.


For large scale government procurement such as the LSS projects, the Government of Malaysia through the Ministry of Finance (MOF) has in the past since 2004, initiated the Industrial Collaboration Program (ICP). This program is intended to leverage large government procurement to support localization in our economy and industry development. This national program is currently managed by the Technology Depository Agency (TDA) under the MoF.

To achieve the national energy mix target for RE of 20% by 2025, approximately 3,991MW of additional capacity is required. This will lead to further private sector investments of a staggering RM 19.1 Billion by 2025. This is sizeable investment for the localization agenda.


TAKEAWAYS – As practiced in most developed nations, Technology Security need to be a cross cut national agenda to support the other vertical national securities such as Food, Shelter, Energy and others. The LSS Projects by MESTECC therefore, need to be synergized with the ICP Program of MOF to intensify local technology capability which will reduce cost of LSS projects in future and increase the chances to achieve the Government’s Energy Security target of 20% by 2025 and beyond. In short, there will not be any Future Security without Technology Security.












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