MALAYSIA: Eleventh Malaysia Plan 2016-2020

Meta Data
Draft: 
No
Revision of previous policy?: 
No
Draft Year: 
2016
Effective Start Year: 
2016
Effective End Year: 
2020
Scope: 
National
Document Type: 
Plan/Strategy
Economic Sector: 
Energy, Power, Multi-Sector
Energy Types: 
All, Oil, Power, Gas, Renewable, Hydropower, Solar, Other
Issued by: 
Economic Planning Unit, Prime Minister’s Department
Source: 
UNESCO IIEP
File: 
Eleventh Malaysia Plan 2016-2020
Overall Summary: 
The Eleventh Malaysia Plan 2016-2020 focuses on Malaysian people, to provide them with wellbeing and prosperity. It is the final leg in the journey towards realising Vision 2020 to achieve full development in Malaysia. Productivity and innovation are basic pillars for the Plan, which is based on six Strategic Thrusts: 1. Enhancing inclusiveness towards an equitable society; 2. Improving wellbeing for all; 3. Accelerating human capital development for an advanced nation; 4. Pursuing green growth for sustainability and resilience; 5. Strengthening infrastructure to support economic expansion; 6. Re-engineering economic growth for greater prosperity. The Chapters addressed are the following: Chapter 1 Eleventh Malaysia Plan: Anchoring growth on people; Chapter 2 Strengthening macroeconomic resilience for sustained growth; Chapter 3 Enhancing inclusiveness towards an equitable society; Chapter 4 Improving wellbeing for all; Chapter 5 Accelerating human capital development for an advanced nation; Chapter 6 Pursuing green growth for sustainability and resilience; Chapter 7 Strengthening infrastructure to support economic expansion; Chapter 8 Re-engineering economic growth for greater prosperity; Chapter 9 Transforming public service for productivity; Chapter 10 Malaysia beyond 2020.
Access
Bi-, multi-lateral mechanisms to expand access: 
Community involvement in providing rural electrification will be promoted. The Government will explore collaborations with relevant communities to ensure sustainability of rural electrification systems. Partnerships with NGOs will be formed to provide electricity supply for the rural communities using micro hybrid and RE sources.
Energy access priorities: 
Ensuring effective sourcing and delivery of energy---Strategy E4: Managing supply diversity for security of the electricity subsector [...]augmenting rural electrification.---Extending provision of rural basic infrastructure by streamlining rural infrastructure planning and increasing the provision of road, water and electricity supply.
Energy access action plan: 
Electricity supply would be provided through off-grid generation for areas which are too far from the grid. The development of alternative systems such as solar hybrid, mini and pico hydro will be supported by off-grid networks to ensure wider coverage.---The Rural Electricity Supply programme will continue to focus on offgrid generation for remote and isolated areas. The alternative system of solar hybrid and mini hydro will be supported by micro- and picogrid to increase coverage.---The implementation of IBR will be continued to ensure utility companies provide efficient services. The IBR framework is designed to incentivise utility companies to reduce costs and improve service levels. The separation of generation, transmission, and distribution tariffs with automatic adjustments to take into account changes in fuel prices will increase transparency and efficiency of electricity supply.---The efficiency and reliability of electricity supply will be further improved through continued investment in generation, transmission, and distribution projects by utility providers.
Energy access targets: 
Rural electrification in Malaysia: Households with electricity supply (%): Peninsular Malaysia, Sabah, Sarawak: 99,9% by 2020.---Focus areas: 36,800 additional houses will be supplied with electricity.---In energy sector, 7,626 MW new generation capacity will be installed in Peninsular Malaysia, along with 300,000 bpd refining capacity at PIPC, providing security to Malaysia’s energy needs.
Energy service quality targets: 
Reliabilty of electricity supply in Malaysia: System Average Interruption Duration Index - minutes per customer: Peninsular Malaysia 50; Sabah 100; Sarawak 157 by 2020.
Consumer subsidies: 
[T]o ensure that electricity tariffs are affordable for consumers, the generation fuel mix needs to be balanced to optimise the cost of supply. The Special Industrial Tariff will be abolished by 2020. In addition, future tariff increases will take into consideration the availability of safety nets for low-income households.
Efficiency
EE priorities: 
Sustainable consumption and production practices will increase the adoption of energy-efficient and low carbon buildings, transport, products, and services. ---Embarking on Green Growth: Resource and energy efficient in balancing both supply-side and demand-side considerations and constraints.---Encouraging low carbon mobility through utilisation of energy efficient vehicles and public transportation.
EE targets: 
By 2020, it is targeted that at least 20% of government procurement will be green.
EE action plans: 
Enhancing demand side management (DSM) by formulating a comprehensive DSM master plan and expanding DSM measures.--- [...] The scope of the new DSM master plan will include the electric and thermal energy, including usage in the transport sector.--- DSM provides solutions to problems such as load management, energy efficiency, and strategic conservation of resources. The main goal of DSM is to encourage consumers to use less energy during peak hours and to move the time of energy use to off-peak hours. ---[M]easures will be taken to identify potential improvements and appropriate approaches to ensure efficient use of energy in buildings, industries and households. [...] User awareness will be enhanced on energy labelling and the availability of standards such as ISO 50001 for buildings and MEPS for appliances will be promoted. Other specific measures will include introduction of Enhanced Time of Use (EToU) tariff scheme and gradual abolishment of the Special Industrial Tariff for energy intensive industries.---The Government will work with relevant private agencies to increase adoption of EEVs (energy efficient vehicles), especially for public transport like buses and taxis.---Principle 2: Expanding Transit-oriented Development (TOD) Transit-oriented Development (TOD) refers to urban development concepts involving the mixed use of residential and commercial development to be pedestrian-friendly, designed with maximum access to public transport. City authorities will adopt TOD as part of the city’s competitiveness master plan to provide mobility options to residents, add vibrancy to city spaces, reduce pollution and energy consumption.
EE labeling: 
GGP will complement the existing eco-labelling scheme in the country for green products certification. ---the MyHijau Mark programme, a uniform labelling established by the Government for green products and services, will be expanded for key product areas such as household products, electronic and electrical appliances.
EE industry standards: 
Green rating systems and standards, aligned with international best practices, will be introduced to promote the greening of industries.
EE building standards: 
Creating green markets through Government green procurement, adoption of green buildings criteria and strengthening green certification;---New government buildings will adopt green features and designs, and use green building materials as per the Skim Penarafan Hijau Jabatan Kerja Raya Malaysia. Existing government buildings will be gradually retrofitted. Industry players will also be encouraged to obtain green certification for private buildings such as GreenPASS and the Green Building Index.
EE transport standards : 
The utilisation of environmentally friendly fuel will be implemented when RON 95 petrol with EURO 4M, and diesel with EURO 5 standards are introduced during the Eleventh Plan. [...]
Energy Service Companies (ESCOs): 
During the Eleventh Plan, measures will be taken to identify potential improvements and appropriate approaches to ensure efficient use of energy in buildings, industries and households. These measures include increasing competencies of energy service providers, especially Registered Electrical Energy Managers, and promoting the implementation of Energy Performance Contracting for government buildings.
EE public awareness/promotional programmes: 
A comprehensive and effective communication plan on the sustainable use of energy resources is required to improve public awareness and understanding, and to manage public perception of the subsidy rationalisation programme. This includes communications and public awareness programmes to build buy-in for the development of coal and nuclear power plants required for security of supply, and for consumers to use energy efficiently in homes, schools, and at workplaces. A task force comprising of representatives of the Government, the private sector, and non-government organisations (NGOs) will be formed to ensure coordinated implementation of the plan.
Renewable Energy
RE priorities: 
Game Changer Embarking on green growth: Energy use is efficient and renewable energy is widely used.---Increasing share of renewables in energy mix by exploring new RE sources, enhancing capacity of RE personnel and implementing net energy metering.---Strategy E4: Managing supply diversity for security of the electricity subsector through better management of resources, enhancing alternative energy sources [...]. ---[T]he optimisation of fuel mix and exploration of alternative fuels will be given priority to reduce the nation’s dependency on fossil fuels for electricity generation.
RE targets: 
Electricity generation capacity through renewable sources including biomass, biogas, solar PV, and mini hydro are targeted to reach 7.8% of total installed capacity in Peninsular Malaysia and Sabah by 2020, or about 2,080 MW6.
RE action plans: 
Studies will be conducted to identify new RE sources to diversify the generation mix. In the Eleventh Plan, new RE sources such as wind, geothermal and ocean energy will be explored.---The Government will provide training to 1,740 personnel through the Sustainable Energy Development Authority (SEDA), creating experts in the field of biomass, biogas, mini hydro and solar PV. [...] In addition, the private sector will be encouraged to conduct training and increase the number of RE experts.---In energy-related infrastructure, due consideration will be given to climate change and environment at the planning, evaluation and implementation stages. Dependency on particular sources, especially polluting or non-renewable ones, will be systematically addressed through introduction of renewable sources.---Sarawak Corridor of Renewable Energy
Net metering: 
Increasing share of renewables in energy mix by [...] implementing net energy metering.---To complement the current FiT mechanism in encouraging the takeoff of RE, a new instrument termed as net energy metering (NEM) will be implemented in the Eleventh Plan. The objective of NEM is to promote and encourage more RE generation, by prioritising internal consumption before any excess power generated is fed to the grid.[...] NEM will be executed by KeTTHA and utility companies, and regulated by Suruhanjaya Tenaga based on amended legal provisions.
Biofuels obligation/mandate: 
The Government will also work towards increasing bio-diesel blending requirements of up to 15% in automotive fuel and implementing the EURO 5 emission standards during the Eleventh Plan.---The utilisation of environmentally friendly fuel will be implemented when RON 95 petrol with EURO 4M, and diesel with EURO 5 standards are introduced during the Eleventh Plan. [...] In addition, the current B7 programme will be further increased to the B15 programme (blending of 15% palm-based methyl ester with 85% petroleum diesel) in all sectors by 2020. The bio-diesel programme, which will be implemented by the Ministry of Plantation Industries and Commodities, offers the energy sector a sustainable, renewable, and environmentally friendly source of energy, as well as reduces the nation’s dependency on imported diesel fuel.
RE public awareness/promotional programmes: 
Comprehensive communication and awareness programmes: The Government will improve the effectiveness of CEPA programmes by coordinating and integrating public awareness messages communicated by different public sector agencies and on different themes – including demand side management, transport, energy consumption, recycling, biodiversity conservation, climate change, disaster risk management, and environmental pollution.
Environment
Energy environmental priorities: 
Encouraging sustainable energy use to support growth---Encouraging low carbon mobility.---The Government will take the lead in establishing the sustainable consumption and production (SCP) approach in prominent sectors in Malaysia including industry, power generation, infrastructure, and transportation. This requires establishing relevant regulatory framework – standards, certifications and guidelines.---The Ministry of Energy, Green Technology and Water (Kementerian Tenaga, Teknologi Hijau dan Air, KeTTHA) supported by relevant ministries and agencies will promote the development of a domestic market for green products and services. Measures to be undertaken include implementing Government green procurement, promoting the development of green buildings and greening of industries to spur green growth. A Government driven push will encourage local industries, especially small and medium enterprises, to develop green products and services, eventually leading to further greening of the supply chain.---The use of CNG will also be promoted.---Where threat of deforestation or extinction exists, special focus will be given to restock these assets.---Continuous research to identify the potential and value of natural resources, including minerals, will be undertaken. This will create a comprehensive natural resource inventory database with estimations of national natural resource availability to facilitate better decision making and determine appropriate actions needed to conserve and use natural resources in a sustainable manner. ---In energy-related infrastructure, due consideration will be given to climate change and environment at the planning, evaluation and implementation stages. Dependency on particular sources, especially polluting or non-renewable ones, will be systematically addressed through introduction of renewable sources.
GHG emissions reduction targets: 
Reduction in GHGs emission intensity of GDP compared to 40% 2005 level by year 2020.
Pollution control action plans: 
Implementation of existing mechanisms such as Polluter Pays Principle and Payment for Ecosystem Services will be expanded to support funding needed to address environmental pollution and conserve biodiversity and its ecosystem.---Managing waste holistically through better coordination, encouraging 3R and using waste as a resource for other industries.---New government buildings will adopt green features and designs, and use green building materials [...] Apart from ensuring efficient use of resources, particularly energy and water use, green buildings will also reduce GHGs emission.---[T]he Department of Environment (DOE) will expand selfregulation among industries to mitigate pollution at source, and cover new aspects such as noise and soil pollution, in addition to hazardous waste, water and air pollution.---The Government will work with relevant private agencies to increase adoption of EEVs (energy efficient vehicles), especially for public transport like buses and taxis.---Other measures will be undertaken with relevant public transport authorities to reduce the environmental impact of the sector. Public transport investments in cities – including Mass Rapid Transit (MRT) systems in Greater Kuala Lumpur/Klang Valley (GKL/KV) and bus systems in other state capitals – will be made in line with declared targets to achieve 40% public transport modal share in GKL/KV and 20% in other cities.---The utilisation of environmentally friendly fuel will be implemented when RON 95 petrol with EURO 4M, and diesel with EURO 5 standards are introduced during the Eleventh Plan.
Decarbonization strategy: 
Encouraging low carbon mobility through utilisation of energy efficient vehicles and public transportation.---The Government will work with relevant private agencies to increase adoption of EEVs (energy efficient vehicles), especially for public transport like buses and taxis.---Other measures will be undertaken with relevant public transport authorities to reduce the environmental impact of the sector. Public transport investments in cities – including Mass Rapid Transit (MRT) systems in Greater Kuala Lumpur/Klang Valley (GKL/KV) and bus systems in other state capitals – will be made in line with declared targets to achieve 40% public transport modal share in GKL/KV and 20% in other cities.---The Government will ensure that future power planting up must incorporate more stringent emission control technologies to ensure a progressive reduction of the energy industry’s carbon footprint.---Principle 2: Expanding Transit-oriented Development (TOD) Transit-oriented Development (TOD) refers to urban development concepts involving the mixed use of residential and commercial development to be pedestrian-friendly, designed with maximum access to public transport. City authorities will adopt TOD as part of the city’s competitiveness master plan to provide mobility options to residents, add vibrancy to city spaces, reduce pollution and energy consumption.
Green finance: 
Economic instruments such as green tax, carbon tax, and REDD+ (reducing emissions from deforestation and forest degradation) will be utilised where appropriate to develop green financing systems. This is important to support the implementation of green initiatives and expand conservation efforts. The Government will continue to evaluate the use of such mechanisms.
Energy-water nexus: 
[D]ams will be constructed for multiple purposes besides flood mitigation, such as power generation, irrigation, water supply and recreation.---In the Eleventh Plan, 3,000 small and inefficient sewage treatment plants will be rationalised through the construction of regional and centralised plants with larger capacities and efficient technologies. [...] This rationalisation is expected to reduce the cost of electricity bills and manpower by 50%.
Pricing
Energy pricing: 
[S]pecific measures will include introduction of Enhanced Time of Use (EToU) tariff scheme and gradual abolishment of the Special Industrial Tariff for energy intensive industries. ---Strategy E5: Improving the sustainability, efficiency, and reliability of the electricity subsector with a sustainable tariff framework and initiatives to improve efficiency and reliability of electricity supply.---Sustained efforts to institute market-based energy pricing will be carried out to reduce the amount of energy subsidies. Initiatives to review the pricing structure for gas supply will be continued during the Eleventh Plan to gradually align current piped gas prices towards market prices. In addition, Incentive Based Regulation (IBR) for gas will be introduced to ensure efficient resource allocation, usage and sustainable financial performance. The price for RON 95 petrol, RON 97 petrol and diesel will continue to be regulated using the managed float system to stem leakages. Compressed natural gas (CNG) prices will also be reviewed accordingly to gradually remove subsidies and encourage expansion of CNG retail infrastructure.---In line with the Government’s policy to gradually remove energy subsidies, subsidy rationalisation for electricity tariffs will continue to be implemented. [...] The Special Industrial Tariff will be abolished by 2020. In addition, future tariff increases will take into consideration the availability of safety nets for low-income households.
Carbon tax: 
Economic instruments such as green tax, carbon tax, and REDD+ (reducing emissions from deforestation and forest degradation) will be utilised where appropriate to develop green financing systems. This is important to support the implementation of green initiatives and expand conservation efforts. The Government will continue to evaluate the use of such mechanisms.
Energy Supply and Infrastructure
Energy supply priorities: 
The use of CNG will also be promoted.---Infrastructures: [E]fforts to further strengthen the security of Malaysia’s fuel and electricity supplies will be undertaken.--[...] Dependency on particular sources, especially polluting or non-renewable ones, will be systematically addressed through introduction of renewable sources.---Strategy E2: Ensuring the security of supply and reliability for the oil and gas subsector within a market-based approach; Enabling growth in the oil and gas subsector; Managing supply diversity for security of the electricity subsector;
Energy mix: 
In terms of fuel mix, the share of coal in the total generation mix is expected to increase from 41.6% in 2010 to 43.0% in 2015, while natural gas is expected to decline from 51.5% to 40.1%.---Studies will be conducted to identify new RE sources to diversify the generation mix. In the Eleventh Plan, new RE sources such as wind, geothermal and ocean energy will be explored.---During the Eleventh Plan, biomass and biogas power plants will be pursued because of the large potential of these sources.
Infrastructure development priorities: 
Gas supply security would be ensured through the construction of pipelines from the Malaysia-Thailand Joint Development Area to Kerteh, Terengganu; construction of the RGT-2 in Pengerang, Johor; and the commissioning of two floating LNG units offshore Sabah and Sarawak with a capacity of 2.7 mtpa. In addition, to ensure undisrupted supply during emergencies, a swing field offshore east of Peninsular Malaysia will provide an additional 100-200 mmscfd of natural gas. [...] Reliability of gas supply in Sabah will be improved with additional pipeline connections from offshore fields to demand centres in FT Labuan, as well as Kota Kinabalu and Kimanis in Sabah. Platforms will be connected through multiple links to provide alternative bypass options and provide capacity to users in the event of platform shutdowns. Improved connectivity for FT Labuan will be realised through the establishment of a pipeline connection between the Sabah-Sarawak Gas Pipeline and FT Labuan.---Supporting the development of Pengerang Integrated Petroleum Complex: The Refinery and Petrochemical Integrated Development (RAPID) within PIPC is a major development that will add 300,000 bpd of oil refining capacity in Malaysia during the Eleventh Plan.---The Rural Electricity Supply programme will continue to focus on offgrid generation for remote and isolated areas. The alternative system of solar hybrid and mini hydro will be supported by micro- and picogrid to increase coverage.
Investment
Financial incentives for energy infrastructure: 
Supporting the development of Pengerang Integrated Petroleum Complex: The Refinery and Petrochemical Integrated Development (RAPID) within PIPC is a major development that will add 300,000 bpd of oil refining capacity in Malaysia during the Eleventh Plan. [...] The Government will provide support to construct essential infrastructure such as roads, drainage, and utilities for this development. Another investment in PIPC will be secured by the Johor Petroleum Development Corporation during the Eleventh Plan to complement existing investments by DIALOG-Vopak and PETRONAS.
Independent power producers: 
Strategy E3: Enabling growth in the oil and gas subsector in downstream oil and gas refining, introducing third party access regulation to allow new entrants into the gas business and implementing clean fuels in the transport sector;---Third party gas players will be able to utilise gas supply infrastructure through the enforcement of the amended Gas Supply Act, 1993 (Act 501) in 2016. This will create a level playing field for new entrants to the domestic gas supply market complementing PETRONAS, which is currently the sole player.
Investment climate development: 
Increasing investment in waste as a resource: [...] as waste becomes a valuable resource –either converted to energy (e.g. biomass and food waste for power generation) These initiatives will be private sector driven to ensure long-term financial viability of such projects and so that industries see the value of waste as a source of energy or inputs for their processes.---Efforts will be implemented in collaboration with regional economic corridor authorities to provide a more conducive business environment to attract higher value added investment to rural areas.
Public Private Partnerships: 
In addition, the private sector will be encouraged to conduct training and increase the number of RE experts.---A comprehensive and effective communication plan on the sustainable use of energy resources is required to improve public awareness and understanding, and to manage public perception of the subsidy rationalisation programme.[...] A task force comprising of representatives of the Government, the private sector, and non-government organisations (NGOs) will be formed to ensure coordinated implementation of the plan.
Governance
Energy management principles: 
Emphasis will also be placed on improving the security and reliability of the energy sector by addressing both supply-side and demand-side measures.---Strategy E1: Strengthening stakeholder coordination and collaboration in the energy sector through greater institutional collaboration on energy planning and engaging end-users on efficient energy consumption;[...]. A high-level focal point in the Government will be established to oversee and streamline all energy related policy decisions and execution. In this regard, National Petroleum Advisory Council will oversee comprehensive planning and management of the energy sector and streamline the interests of all parties. --- Strategy E5: Improving the sustainability, efficiency, and reliability of the electricity subsector with [...]initiatives to improve efficiency and reliability of electricity supply.---[F]air competition will be encouraged and a vibrant gas supply market will be created while local industries will be weaned off subsidies.
Energy institutional structures: 
[A]n independent atomic energy regulatory commission will be established based on a new comprehensive nuclear law for electricity generation.
M&E of policy implementation: 
[A] one-stop centre will be established to provide access and linkage to all data in the nation, including data that are housed in relevant agencies.
Statistics collection and management: 
Continuous research to identify the potential and value of natural resources, including minerals, will be undertaken. This will create a comprehensive natural resource inventory database with estimations of national natural resource availability to facilitate better decision making and determine appropriate actions needed to conserve and use natural resources in a sustainable manner.
Technology
Clean energy technology priorities: 
Initiatives will include identifying new competencies and skills needed for the development of areas such as RE, demand side management, green buildings, waste to energy, [...]; and intensifying research and development and innovation of indigenous green technology to support green growth, particularly in RE, construction, and transport.---Studies will be conducted to identify new RE sources to diversify the generation mix. In the Eleventh Plan, new RE sources such as wind, geothermal and ocean energy will be explored.---Infrastructure related initiatives such as implementation of smart grids and highly efficient co-generation technologies for combined heat and power system will be promoted.---Smart cities initiatives: 1. Smart meters & demand management; 2 Distribution & substation automation; 3 Building energy management; 4. Streetlight, building and structural health monitoring. [...] 9 Air quality monitoring.---The usage of nuclear power as an alternative energy resource will be explored further. In this regard, an independent atomic energy regulatory commission will be established based on a new comprehensive nuclear law for electricity generation.
Clean energy technology deployment: 
[A]dvanced technology will be deployed in mature and marginal fields to monetise stranded gas.
Natural gas transportation technology: 
Distribution of natural gas to scattered and uneconomic demand areas in Peninsular Malaysia and Sabah will be served through virtual pipelines, which is a method of distributing natural gas from city gate to consumers using trucks [...]. Safe and economic alternative distribution methods for natural gas will also be explored.