MALAYSIA: Ninth Malaysia Plan, 2006-2010

Meta Data
Draft: 
No
Revision of previous policy?: 
No
Draft Year: 
2006
Effective Start Year: 
2006
Effective End Year: 
2010
Scope: 
National
Document Type: 
Plan/Strategy
Economic Sector: 
Power, Industry, Transport, Building, Multi-Sector
Energy Types: 
Power, Renewable, Hydropower, Solar, Other
Issued by: 
Economic Planning Unit
Source: 
Economic Planning Unit, Prime Minister’s Department
File: 
Ninth Malaysia Plan, 2006-2010
Overall Summary: 
The Ninth Plan sets out to achieve a stronger and more value-added economy, while giving substantial focus to socio-economic issues and uplifting the quality of life for all. The Ninth Plan will seek to achieve growth with equity in distribution. After having explored the national mission, the Plan delivers an overview of the ninth Malaysia Plan and provides for 5 Thrusts: 1. To move the economy up the value chain. 2. To raise the capacity for knowledge and innovation and nurture "First class mentality"; 3. To address persistent socio-economic inequalities constructively and productively; 4. To improve the standard and sustainability of quality of life; 5. To strengthen the institutional and implementation capacity.
Access
Energy access action plan: 
Rural electrification projects will [...] be intensified, especially in Sabah and Sarawak.---The implementation of the rural electrification programme will be intensified to improve the quality of life of rural communities, especially in Sabah and Sarawak. Towards this end, about 54,680 housing units will be supplied with electricity using technologies such as solar hybrid and micro-hydro systems.
Energy access targets: 
[A]bout 54,680 housing units will be supplied with electricity using technologies such as solar hybrid and micro-hydro systems. ---By the end of the Plan period, rural electricity coverage in Sabah and Sarawak is expected to increase to 80.6 per cent and 89.6 per cent, respectively.
Efficiency
EE priorities: 
[E]nhancing energy sufficiency and efficiency, including diversifying sources of energy.---Energy efficiency measures will be intensified in the industrial, transport and commercial sectors as well as in government buildings.
EE action plans: 
Tourism programmes and projects, particularly hotels and resorts, will need to incorporate, among others, water and energy conservation [...] in their implementation, management and maintenance plans.---EE features such as efficient lighting and air conditioning systems as well as establishing a comprehensive energy management system will be encouraged. In addition, the industrial sector will be encouraged to implement EE measures including improvements in plant, equipment and processes as well as end use. Towards this end, efforts will be undertaken to introduce the Efficient Management of Electrical Energy Regulations, amend the Uniform Building By-laws (UBBL), label electrical appliances and use high-efficiency motors. Initiatives to develop local expertise in the manufacture of EE equipment and machineries as new sources of growth will also be supported.---To promote greater EE in Government buildings, good energy practices such as optimal lighting and air-conditioning will be adopted. Energy audits will be conducted in Government buildings to identify additional measures that can be implemented to further improve EE.---During the Plan period, initiatives will be undertaken to review the energy pricing structure to reflect market prices of various alternative energy sources and encourage greater efficiency in the utilisation of energy while discouraging wasteful consumption. [...] In addition, the energy demand-side management will be emphasised to ensure optimal and efficient use of scarce and depletable energy resources.
EE financial incentives: 
To further support the implementation of RE and EE initiatives, existing financial and fiscal incentives such as Accelerated Capital Allowance will be improved during the Plan period.
EE public awareness/promotional programmes: 
Efforts will be undertaken to enhance awareness on EE. In this regard, suitable courses on RE and EE for institutions of higher education will be developed. In addition, specialised courses on energy planning and management will be introduced to enhance the capacity of professionals in energy-related management.
Renewable Energy
RE priorities: 
The high dependence on petroleum products will be reduced by promoting the use of alternative fuels. The use of biofuel will be promoted while R&D efforts in the production of biodiesel will be given full support.---Other renewable energy sources such as solar power will continue to be developed.---[P]romoting greater use of renewable energy for power generation and by industries.---New sources of energy such as solar and wind will be developed with emphasis on utilising cost-effective technology as well as strengthening capacity building.
RE targets: 
By 2010, RE is expected to contribute 350 MW to total energy supply.
RE action plans: 
[E]fforts will be continued to foster a more conducive environment to support the implementation of SREP projects.[...]The Clean Development Mechanism (CDM) will also be utilised to provide support for the implementation of SREP projects.---RE projects utilising municipal waste will also be promoted.---Initiatives to enhance local capabilities in the development of indigenous RE-based technologies as new sources of growth will also be supported.---Efforts to promote the development of biofuel using palm oil as a renewable source of energy will be undertaken during the Plan period. Designated pump stations, mainly in the Klang Valley, to supply diesel blended with 5.0 per cent palm olein are expected to commence operation in 2006. Regulations for the blending of petroleum diesel and palm olein will be formulated. Efforts will also be undertaken to promote the export of palm-based diesel
RE capital subsidy, grant, or rebate: 
To further support the implementation of RE and EE initiatives, existing financial and fiscal incentives such as Accelerated Capital Allowance will be improved during the Plan period.
Public competitive bidding/tendering: 
To enhance efficient utilisation of resources, future power generation projects will be considered through a bidding process.
RE public awareness/promotional programmes: 
[S]uitable courses on RE and EE for institutions of higher education will be developed. In addition, specialised courses on energy planning and management will be introduced to enhance the capacity of professionals in energy-related management.
Public investment loans or grants: 
[A]ctivities under the roadmap on solar, hydrogen and fuel cells such as technology development and knowledge sharing will be implemented while financing mechanisms will be explored.
Environment
Energy environmental priorities: 
Greater focus will be placed on preventive measures to mitigate negative environmental effect [...]. This includes having stricter regulations and emission standards, improving the public sewerage system and promoting the use of cleaner energy.
Pollution control action plans: 
[I]ncentives will be reviewed to encourage transport operators to convert their vehicles to (natural gas for vehicles) NGV.
Carbon markets: 
[...]The Clean Development Mechanism (CDM) will also be utilised to provide support for the implementation of SREP projects.
Pricing
Renewable energy subsidies: 
To further support the implementation of RE and EE initiatives, existing financial and fiscal incentives such as Accelerated Capital Allowance will be improved during the Plan period.
Energy pricing: 
[I]mproving the productivity and efficiency of energy suppliers and promoting market-based approach in determining energy prices.---During the Plan period, initiatives will be undertaken to review the energy pricing structure to reflect market prices of various alternative energy sources and encourage greater efficiency in the utilisation of energy while discouraging wasteful consumption. A review will be undertaken to gradually reduce subsidies on energy prices. In addition, the energy demand-side management will be emphasised to ensure optimal and efficient use of scarce and depletable energy resources.
Energy Supply and Infrastructure
Infrastructure development priorities: 
The high dependence on petroleum products will be reduced by promoting the use of alternative fuels. The use of biofuel will be promoted while R&D efforts in the production of biodiesel will be given full support.---The NGDS network will be further expanded by about 640 kilometres to 2,005 kilometres by the end of the Plan period [...]. To promote greater utilisation of natural gas for vehicles (NGV) in the transportation sector, an additional 54 NGV stations will be constructed to total 94 by the end of the Plan period.---The balance of RM30.7 billion will be utilised to upgrade the oil and gas supply infrastructure, increase the number of service stations as well as expand the petrochemical industry.---In Sabah, a new gas-based plant with a capacity of 100 MW will be commissioned while a 120 MW open-cycle plant will be converted to a 190 MW combined-cycle plant in 2006. In addition, a gas-based plant with a capacity of 190 MW will also be commissioned in 2008.---In Sarawak, the commissioning of new power plants, including the 100 MW Bintulu gas-based plant in 2006. The Bakun Hydroelectric project with an installed capacity of 2,400 MW will be commissioned in 2009/ 2010.---In Peninsular Malaysia, initiatives will be undertaken to increase reliability and security of supply in major load centres. These include new transmission lines for the Central Area Reinforcement in the Klang Valley, the Northern Area Reinforcement from Manjung in Perak to Pulau Pinang and the South–Central Reinforcement from Sepang to Puchong.---The East-West Interconnection Grid in Sabah will be completed in 2006. [...] In Sarawak, the SESCO Grid will be expanded to cater for additional generation capacity. New transmission lines will also be constructed to supply electricity from the Bakun project to Kemena and Balingian.---During the Plan period, the distribution network in Peninsular Malaysia will continue to be expanded in line with the growth of new industrial estates, townships and residential areas. The distribution network in Sabah and Sarawak will also be upgraded [...].
Cross-border energy infrastructure: 
[A] transmission system that transcends national boundaries such as the Peninsular Malaysia- Sumatera Interconnection Grid will be explored to facilitate the implementation of the Trans-ASEAN Power Grid project (TAPG).
Regional integration priorities: 
At the regional level, Malaysia will continue to support the ASEAN Plan of Action for Energy Cooperation (APAEC).[...] In addition, issues of energy security will also be given emphasis under the cooperation of ASEAN Plus Three as well as the Asia Pacific Economic Cooperation (APEC).
Trade
Standard power production and purchasing agreements: 
[T]he concept of demand risk sharing will be extended to new PPAs to enable sharing of costs for maintaining the reserve margin between the utility companies and IPPs. In addition, a review will be undertaken on the modes of privatization and fuel pass-through arrangement for future PPAs to ensure optimal utilisation of resources, allocation of risk between the utility companies and IPPs as well as minimisation of cost to the utility companies.
Investment
Independent power producers: 
[T]he concept of demand risk sharing will be extended to new PPAs to enable sharing of costs for maintaining the reserve margin between the utility companies and IPPs. In addition, a review will be undertaken on the modes of privatization and fuel pass-through arrangement for future PPAs to ensure optimal utilisation of resources, allocation of risk between the utility companies and IPPs as well as minimisation of cost to the utility companies.---Two new coal-based IPP plants at Tanjung Bin, Johor and Jimah, Negeri Sembilan with a combined installed capacity of 3,500 MW will be commissioned during the Plan period.
Investment climate development: 
[D]eveloping new sources of growth in the energy sector including participation of local companies in energy-related industries and services abroad.---Continuous efforts will also be undertaken to attract international oil companies to invest in exploration activities, particularly in deepwater of more than 200 metres and ultra-deepwater of more than one kilometre to increase domestic petroleum reserves. collaboration with production sharing contractors will continue to be undertaken to identify opportunities to maximise reserves recovery.
Bidding and Tendering: 
To enhance efficient utilisation of resources, future power generation projects will be considered through a bidding process.
Governance
National policy structure: 
[T]he review of the terms and conditions of the Renewable Energy Power Purchase Agreement (REPPA)[...] is expected to be completed.
Technology
Clean energy technology deployment: 
[A]ctivities under the roadmap on solar, hydrogen and fuel cells such as technology development and knowledge sharing will be implemented while financing mechanisms will be explored.
Advanced fuel extraction technology: 
The high dependence on petroleum products will be reduced by promoting the use of alternative fuels. The use of biofuel will be promoted while R&D efforts in the production of biodiesel will be given full support.
Natural gas transportation technology: 
To promote greater utilisation of natural gas for vehicles (NGV) in the transportation sector, an additional 54 NGV stations will be constructed to total 94 by the end of the Plan period. Measures will be undertaken to promote greater utilisation of NGV, including the development of dedicated NGV stations, financing packages for NGV conversion as well as intensification of R&D programmes. In addition, incentives will be reviewed to encourage transport operators to convert their vehicles to NGV.
R&D renewable energy: 
R&D efforts in the production of biodiesel will be given full support.