By Ko Chuan Zhen, Group CEO, Plus Xnergy Holding Sdn Bhd,
During the MCO in 2020, electricity usage in the industrial and commercial sectors dropped between 25 percent and 50 percent as businesses halted activities, while residential usage surged between 20 percent and 50 percent with work from home.
Currently, as we experience a stricter lockdown in Malaysia to combat the current high Covid-19 infections, many factories will be operating on limited capacity which impacts their energy consumption.
It is commendable that the Strategic Program to Empower the People and the Economy (PEMERKASA) announced just last night, provides a 10 percent electricity discount for impacted sectors – namely hotel operators, travel agencies, shopping malls and premises, convention centers, theme parks and local airlines. This discount is applicable for the months July to September 2021.
However, the electricity discount eligibility for commercial and manufacturing sectors should also be considered, as one of their major challenges is in managing overheads and reducing bottom lines.
Globally, electricity has been on a downward trend but is expected to rebound in 2021 as economies recover led by electricity generation from renewable energy sources. The International Energy Association expects renewables in 2021 to regain momentum similar to the renewable energy capacity in 2019, with delayed projects coming back online.
Renewable electricity capacity additions, 2007-2021, updated IEA forecast
Undeniably, the slowdown has impacted us, yet we see confidence and continued demand from commercial and industrial clients. They include major plastics manufacturer Mah Sing Plastics, with a return on investments (ROI) from their solar investment in just 4 years. Meanwhile, AJIYA, a building solutions manufacturer, gained a monthly savings of RM50,000.
Through our positive experiences, we are still confident of prospects in the RE industry, though conversion to actual bottom lines may take longer than expected, with the tightened standard operating procedures (SOP) and reduced operational activity.
It is a difficult position for the Government as they try to strike a balance between protecting lives and the nation’s economy. For us at Plus Xnergy our people’s wellbeing is of topmost priority. Work from home (WFH) is mandatory, while we have had to postpone client meetings, project rollouts and also plan out warehousing as we weather out the lockdown.
Meantime, the Kuala Lumpur Mayor Datuk Seri Mahadi Che Ngah’s recent imposition of a 30 percent compulsory reliance on renewable energy (RE) for future commercial and residential developments in the state is seen as a good move for Malaysia as it contributes to the national RE goal set at 31 percent by 2025.
In support, the Government plays an important role for the RE industry with strong policies such as the Net Energy Metering (NEM) and Green Investment Tax Allowance (GITA), which have greatly increased the interest and the adoption of solar solutions.
In terms of Malaysia’s RE capacity mix projection, the latest Energy Commission (EC) report forecasts a near twofold increase in share from 17 percent in 2021 to 31 percent by 2032. In the same period, the EC foresees a reduction in gas and coal combined share from 82 percent down to 69%.
Capacity Mix by Fuel (2021-2039)
Energy Commission Report on Peninsular Malaysia Generation Development Plan 2020
Still, more can be done to raise the awareness of RE as a main energy source, such as with financial institutions offering attractive incentives or repayment schemes so that many more commercial, industrial as well as developers will see the benefits of RE.
In addition, the realisation of digitalisation for energy is also necessary as additional savings in electricity can be realised with emerging technologies such as AIoT (artificial intelligence of things). We have developed an in-house energy performance management system (EPMS) called SOURCE. With this, solar adopters can further optimize energy usage, with up to 25% in savings.