Sarawak Energy, along with Singapore Power Group and Sembcorp Industries, has completed technical studies on the cables linking Borneo to the city-state. — Bernama
WHAT will be the implications of the recent appointment of Datuk Seri Fadillah Yusof as Energy Transition and Public Utilities Minister?
Sarawak is a renewable energy (RE) powerhouse, and Fadillah’s role is likely to ensure that the state is not left out of Putrajaya’s green energy policies.
It will be necessary to iron out some issues, starting with the gold rush that peninsula-based green power players are chasing - to sell green energy to Singapore.
Sarawak already has its own plans while the industry awaits the final word on the workings of a soon-to-be created energy exchange. This exchange will be the intermediary between exporters and buyers in Singapore to sell electricity via the grid that extends from Johor into the republic.
Discussions in the last few years for hydro power – deemed green energy in today’s definitions – to be exported from Sarawak into Singapore are about to see fruition.
The plan is for Sarawak to sell one gigawatt (GW) of RE to Singapore by 2032 via a 700km undersea cable.
It appears Singaporean parties will fund the capital expenditure for the cable, although the terms of such a large investment are unclear.
For example, will state-owned power producer Sarawak Energy Bhd (SEB) part-fund or subsidise some of that capex via cheaper electricity tariffs?
More importantly, how will the massive export of green energy from Sarawak into Singapore be aligned with Malaysia’s National Energy Transition Roadmap (NETR)?
One of the NETR’s big initiatives is exporting green energy to Singapore via Johor.
Will Peninsular Malaysia and Sarawak be competing for the same Singaporean off-takers and end up price-cutting each other?
Then there is Sarawak’s hydrogen play. With its vast hydropower resources, Sarawak has become a global hub for the production of green hydrogen - splitting water into hydrogen using electrolyser technology.
This process requires large amounts of green energy, which is why it is only viable in Sarawak - solar production in the peninsula is insufficient to generate green hydrogen.
The Koreans and Japanese are already working on such projects in Sarawak in order to export green hydrogen that will be used to power their hydrogen-powered cars back home.
One problem lies in the high cost and it is well-articulated in the NETR.
The global supply of electrolysers is limited. Technical capabilities and expertise are also lacking while capex is also high.
The NETR states that improvements in electrolyser efficiency or reductions in overall costs can give Malaysia a significant competitive edge.
It also says that there is a lack of policy support, defined standards and regulations governing hydrogen.
Considering Sarawak’s strong push for green hydrogen, it is likely Fadillah will push for improvement in this area.
The NETR has made a few suggestions, which should be implemented quickly by the new minister. These include developing domestic green electrolyser manufacturing capabilities, funding research and providing financial incentives for electrolyser R&D activities by the private sector.
It also suggests incentives to develop hydrogen refuelling stations and buy hydrogen fuel cell vehicles.
While these are new opportunities for entrepreneurs to partake in Sarawak’s green energy ecosystem, it will not be easy.
Company officials from the peninsula who are trying to penetrate the Sarawak green energy space say while there is less red tape in the state, there are other challenges.
First, Sarawak already has global players wooing the state officials, so competition is stiff. Second, the state prefers to use Sarawak-based companies.
These officials, who have been making frequent trips to the state to network and discover opportunities, say opportunities still abound. The massive turnout at the Sustainability & RE Forum in Kuching in September was testament to that.
Considering Sarawak’s push towards green energy, it is hoped that the state will stop all logging, both legal and illegal. Keeping the forests intact will be more profitable than destroying them.
Of course, this applies to all states that still have forests. Even secondary forests matter.
The “profit” being referred to here is carbon credits. Verification and certification of such assets, however, are still lacking.
One day, state and private landowners will be able to collect revenue easily from just preserving forests if standards are developed and carbon exchanges are built.
This article first appeared in Star Biz7 weekly edition.
