Renewable energy law and policy in Malaysia : a critical analysis

Abstract

Renewable energy (RE) has become a main component in most countries’ energy sources. The importance of RE generation is founded on two main reasons, which include the need to enhance energy security, especially in the power sector, and also to mitigate issues on climate change. Malaysia is one country that embraces this ideology, as fossil fuels are becoming rapidly depleted, while it also has made a commitment towards the international framework to reduce emission intensity. Through the Paris Agreement, the presence of political will for RE development is becoming sturdier. This thesis examines the legal framework which regulates RE in Malaysia. This original synthesis attempts to identify lacunae in the existing laws, especially in accelerating RE development and reducing greenhouse gas (GHG) emissions. This study primarily supports reform to the Renewable Energy Act 2011 (Act 725) which represents Malaysia’s primary legal measure to increase RE generation. As an appraisal of the Renewable Energy Act 2011 (Act 725), this thesis argues that the Act fails to consolidate the diverges of RE support mechanisms and climate change mitigation measures, as while also promoting sustainable development. The Act restrains its purpose to implementing a Feed-in Tariff (FiT) in Malaysia, and the design reflects a lack of effective and coherent regulatory approaches to increasing the RE share. Though FiT is regarded as an institutional inertia to support RE development in Malaysia, many countries have started to divert from FiT to auctions/tendering system. Auctions have been found to be able to bring down the costs of RE generation. Through this, RE will become more competitive alongside fossil fuels. To remedy the flaws of FiT, this thesis calls for the incorporation of auctions into the existing RE law, so as to support the expansion of solar photovoltaic (PV), biomass and biogas industries in Malaysia. This thesis further investigates factors have contributed to RE development in Germany, India and Thailand, alongside a review of these nation’s RE laws and policies. Lessons may be learned from the practices of these two countries, applied in overcoming the shortcomings of RE development in Malaysia. Apart from the various RE incentives offered, three major findings in this section are that strong political will combined with an effective regulatory body, as well as a specific policy for each RE technology, have contributed to RE expansion in Germany, India and Thailand. Having examined RE laws and policies in other jurisdictions, this thesis offers a number of suggestions for reforming the existing legal RE regime in Malaysia, especially the Renewable Energy Act 2011 (Act 725), in order to achieve RE targets for the national energy mix.