The Malaysian Fifth Fuel Policy: Re-strategising the Malaysian Renewable Energy Initiatives

The power industry is the most crucial and strategic sector for any country to achieve its vision. Due to the fast depletion and high cost of fossil fuel, this is now a threat to sustainable growth. Attention is now focused on renewable energies as an alternative. In Malaysia, renewable energy was included in the 8th Malaysia Plan (2000-2005) with a target of 500 MW out of the 20,000 MW total generation capacity. However, for the first 10 years (2000-2010) only 41.5 MW planting up has been achieved. This paper recommends strategies, implementation mechanism, and financial framework to ensure success of the initiatives. Some of the recommendations were currently being implemented such as the Green Technology Fund and the Fit-In-Tariff. In addition, this paper proposes the incorporation of a Malaysian Renewable Energy Development Board with wide legislative and executive powers, that would be a strong champion of the RE initiatives. Its primary function would be, inter alia, cross-ministry coordination, tariff fixation, regulating utilization of renewable biomass waste, institute fiscal incentives such as investment incentives, tax holidays, removal of barriers, and initiate government funded Research, Development and Demonstration (RD&D) initiatives.