@Green July/August 2021 | Page 5

July-August , 2021 | @ green

INDUSTRY

05

Shamsul affirms targets

KeTSA Minister also emphasised that Malaysia ’ s energy transition plan should be an affordable one

MALAYSIA has targeted 31 per cent Renewable Energy ( RE ) in its installed capacity in 2025 and 40 per cent by 2035 as its energy transition plan by 2040 . Energy and Natural

Resources ( KeTSA ) Minister Datuk Seri Dr Shamsul Anuar Nasarah shared Malaysia ’ s plans with other Asean Ministers of Energy and representatives , gathered virtually at The Special Meeting of ASEAN Ministers on Energy and the Minister of Economy , Trade and Industry of Japan on June 21 .
The meeting was chaired by Nguyen Hong Dien , Minister of Industry and Trade of Viet Nam , and co-chaired by H . E . Kajiyama Hiroshi , Minister of Economy , Trade and Industry of Japan . The Secretary- General of ASEAN was also in attendance .
Shamsul shared Malaysia ’ s energy transition plans until 2040 , which focused on its power generation plan during the meeting . Shamsul also shared Malaysia ’ s target of 31 per cent Renewable Energy ( RE ) in its installed capacity in 2025 and 40 per cent in 2035 .
He said the installed capacity for RE in Malaysia was 7,995MW . By 2035 , the RE installed capacity is projected to more than double to 18,000 MW .
“ To increase the share of RE in the power capacity mix , the government would be focussing on Peninsular Malaysia as it accounts for 80 per cent of Malaysia ’ s electricity demand ,” said Shamsul .
“ Out of the 31 per cent RE target in 2025 , 26 per cent will come from Peninsular Malaysia in 2025 . And , out of the 40 per cent target in 2035 , Peninsular will account for 32 per cent .
“ RE capacity in Peninsular is projected to increase from the current 4,430MW to
10,944MW in the next 15 years . As solar has the highest potential , Malaysia plans to introduce battery energy storage systems ( BESS ), with a total capacity of 500MW from 2030 onwards .”
Shamsul said with these RE targets , the carbon emission intensity from the power sector was set to be reduced by 45 per cent in 2030 . A further 60 per cent in 2035 , compared to the 2005 level , is in line with Malaysia ’ s Nationally Determined Contributions ( NDCs ) targets under the Paris Climate Agreement .
The Minister also emphasised that Malaysia ’ s energy transition plan should be an affordable one in line with the Sustainable Development Goal 7 of ensuring access to affordable , reliable , sustainable and modern energy for all .
Solar has the highest potential
“ Therefore , while Malaysia is pushing for a higher target of RE in its capacity mix , the Ministry also takes into account the affordability of the energy transition to the rakyat and the resiliency of Malaysia ’ s energy system .
“ More than 7000 MW of coal power plants ’ Power Purchase Agreements ( PPAs ) would expire by 2033 and be replaced chiefly by gas and RE , lowering Malaysia ’ s carbon emissions .
“ Although Malaysia will not be building new coal power plants , the Ministry does not discount the option of extending the operation of these plants ,” added Shamsul .
However , the extension of these plants will depend on the future availability of technologies in reducing emissions and the cost of adopting those technologies .
As solar has the highest potential in Peninsular , most of Malaysia ’ s RE will be contributed by solar . Hence , the Ministry will introduce utility-scale battery energy storage systems ( BESS ) with a total capac-
ity of 500MW from 2030-2034 .
In conclusion , the Minister stated that Malaysia ’ s energy transition towards a lower carbon pathway is not without its challenges . Hence , ASEAN will continue to work together with various dialogue partners and international organisations to achieve its sustainable energy goals .
Malaysia values the support offered by Japan to further enhance its policies and programmes , which will assist in transitioning our energy systems towards a lower carbon pathway .
“ Malaysia welcomes Japan ’ s Asia Energy Transition Initiative ( AETI ) in providing support in terms of expertise , knowledge sharing and capacity building to develop a sustainable , affordable and reliable energy future for Asean ,” concluded the Minister .
In conjunction with The Special Meeting of ASEAN Ministers on Energy and the Minister of Economic , Trade and Industry of Japan , the ASEAN ministers and the Minister of Economic , Trade and Industry of Japan adopted a Joint Statement on “ Enhancing Partnerships in Realising Energy Transitions in ASEAN ”. – @ green
Dr Shamsul

Malaysia , Singapore strengthen position as regional hubs for green financing

MALAYSIA and Singapore have intensified longer-term positioning as regional hubs for green and sustainable finance , making the issuing of sustainability bonds in ASEAN more vibrant .
ASEAN Sustainable Finance State of the Market 2020 was launched by the Climate Bonds Initiative with the support from HSBC . The report revealed that the region ’ s sustainable finance market has maintained rapid growth despite the negative impact of Covid-19 . This then has called for the need of a sustainable economic recovery .
It was noted in the report that the Malaysian sustainability bond and sukuk market currently stood at US $ 2.6 billion . This shows that a total of 15 green bond , sukuk and loan deals have been issued by Malaysian entities , with six occurring in 2019 and three in 2020 .
One of the green deals , which came into the market in 2020 was the first ASEAN Green Sustainable and Responsible Investment Sukuk . It is worth RM260 million ( US $ 61m ) and issued by Leader Energy , with HSBC Amanah Malaysia as the lead arranger .
“ The proceeds are to finance two solar photovoltaic power projects in Kedah , which also marks Leader Energy ’ s debut project financing issuance in the ringgit denominated bond market ,” the report revealed .
It was also highlighted in the report some key policy developments that are anticipated to drive ASEAN ’ s sustainable finance market , such as Malaysia ’ s Joint Committee on Climate Change , led by Bank Negara Malaysia and Securities Commission Malaysia .
Collective ASEAN effort
It will identify the development of guidance documents on climate risk management and scenario analysis as one of its priorities in 2021 , according to the report . Meanwhile , the ASEAN Green , Social , and Sustainability ( GSS ) issuance reached a record high of US $ 12.1 billion in 2020 , from US $ 11.5 billion issued in 2019 .
Cumulative GSS issuance in ASEAN since 2016 now stood at US $ 29.1 billion . According to the report , Singapore remained the leader of GSS issuance in 2020 , representing 53 per cent of the region ’ s issuance .
On the sector ’ s outlook , the report suggested that sustainable finance is set to further underpin national recovery and stimulus plans to “ build back better .”
“ Public sector issuance remains a driver to encourage private sector issuers to participate in the market , and ASEAN ’ s sovereign issuers ’ club is set to expand with planned sovereign green bond issuance already announced by Singapore and Vietnam .
“ Malaysia , on the other hand , sees a future role as an international centre for sustainable Islamic finance and green sukuk ,” it added .
In addition , ASEAN markets are collectively developing a system to bring greater clarity to market participants and deepening efforts to improve definitions for sustainable investments .
The development of other instruments , such as three sustainability-linked bonds and loans or transition bonds , are also needed to meet the larger financing needs of ASEAN ’ s low carbon transition . – @ green