AS PART OF the commitment to the Paris Agreement to reduce the carbon intensity of the country by 45% by 2030, and to keep the global temperature rise to within 1.5°C, the Malaysian government introduced the renewable targets of 40% by 2035 and 70% by 2050.The National Energy Efficiency Action Plan (2016-2025) also sets a national energy efficiency target of 8% by 2025. A plethora of energy-related policies and regulations ensued, including the Renewable Energy Roadmap, National Energy Transition Roadmap and the Energy Efficiency and Conservation Act; all these could help Malaysia achieve its net zero target by 2050.

Adhering to the “Penang Leads” mantra, the State took the initiative to adopt a state-wide energy policy that would contribute to the achievement of these national targets. As a highly urbanised and developed state, Penang has higher electricity consumption per capita compared to the national average (see Figure 1). Its electricity consumption per unit of GDP has also been higher than the national average (see Figure 2), largely because almost half of its GDP comes from the manufacturing sector. The trend, however, has been on a downward trajectory, and the electricity intensity per GDP was likely to be below, if not on par with, the national average in the past two years. This is consistent with the downward trend of electricity intensity in the manufacturing sector in Penang (see Figure 3).

In terms of renewable energy (RE), Penang has made great strides. RE made up less than 1.5% (51MW) of the total installed capacity of Penang in 2018. It has since increased to around 5% (233MW) by 2023.[1] The Malaysia RE Roadmap estimated the total potential capacity of solar energy (rooftop and floating solar) in Penang alone could amount to 3,287MW.

Penang Energy Framework

The Penang Energy Framework (PEF) is hence important in making sure that Penang utilises its renewable energy sources optimally. It starts with energy use in the building sector, and will gradually expand to other sectors including transport, industry and so on.

New commercial and industrial stand-alone buildings are also required to source a portion of their energy from renewable sources based on the Tenaga Nasional Berhad (TNB) commercial and industrial tariff categories: either 25% (low voltage), 5% (medium voltage) or 2% (high voltage) RE according to their usage, or 75% of the roof to be covered with solar PV. New commercial buildings with air-conditioned spaces exceeding 4,000m2 also need to source at least 2% of their total energy from renewable sources. While these targets may not seem too ambitious (more flexible RE purchase regimes like RE Certificate or Corporate Renewable Energy Supply Scheme (CRESS) were yet to be introduced or widely adopted when these targets were initiated), they serve as a starting point, and can be revised as the State sees fit.

Energy efficiency (EE) is as—if not more—important as RE when it comes to tackling energy use in the building sector. EE is usually a cost-effective way to conserve energy and reduce greenhouse gas emissions. PEF requires all non-residential buildings (public and private) to report Building Energy Index (BEI)[2] values annually—with mandatory submission starting from 2026. Also, new non-residential buildings must achieve specific BEI standards based on building type. More stringent BEI standards will apply to new buildings constructed after 2030. A BEI database will set a standard for efficiency in Penang and support the Building Energy Rating Scheme at the national and state level.

Additionally, PEF requires the state to amend the current Uniform Building By-Law (UBBL) Clause to ensure that the national standard MS1525[3] apply to all types of buildings, including residential buildings.

To bring PEF’s vision to life, its implementation will focus on four key areas: Capacity Building, Awareness and Education, Incentives and Certifications, and Data Collection and Enforcement. Penang Green Council (PGC), as the implementing agency, is currently working with government departments, local councils, GLCs and related professional bodies to conduct Energy Management Courses and Communication, Education and Public Awareness (CEPA) programmes, and build the necessary infrastructure for reporting and monitoring.

Although the profile of Penang’s energy sector depends heavily on national policy and incentive framework, PEF can turbocharge the transition through the adoption of forward-looking policies and regulations that increase RE and EE adoption locally, which will be a transformational footprint in the nation’s energy sector.

Footnotes

[1] Sources: TNB, SEDA and the Energy Commission

[2] BEI is a benchmarking method for monitoring the energy performance of buildings by referring to the energy intensity used per m2 of floor area. It can be calculated by taking the ratio between the annual energy consumption of a building (kWh/year) and the net floor area of the building or Nett Floor Area (NFA).

[3] According to Pertubuhan Arkitek Malaysia (PAM), MS1525 is a code of practice that gives guidance on the effective use of energy, including the application of RE in new and existing non-residential buildings.