Yang Berbahagia Datin Badriyah Haji Abdul Malek, deputy secretary-general (energy and green technology), Energy, Green Technology and Water Ministry;
Mr Edwin Khew Teck Fook, secretary-general, Asian Photovoltaic Industry Association (APVIA);
Mr Ahmad Shadzli Abdul Wahab, president, Malaysian Photovoltaic Industry Association (MPIA);
Professor Dr Loredana Padurean, faculty director, Asia School of Business;
distinguished speakers, participants;
ladies and gentlemen;
Assalamualaikum, good morning and “Salam 1Malaysia”.
On behalf of the energy, green technology and water minister, I would like to thank MPIA and APVIA for inviting me to officiate at this conference on solar photovoltaic (PV) technology.
Solar PV has certainly come a long way since its early days as a token capacity in the electricity mix.
Before I go any further, let me take you on a walk down memory lane in the energy landscape.
Exactly 40 years ago, Amory Lovins, founder of Rocky Mountain Institute and author of the book Reinventing Fire, conceptualised the transition of global energy to renewable energy.
He envisaged that distributed renewable energy, coupled with energy efficiency, would transition the world to one that was less dependent on fossil fuel.
His idea seemed preposterous then, but early this year, in March, Amory was awarded the German Order of Merit prize for his intellectual leadership and foresight in the future of energy.
And, the Germans should know better because today, they are the world leaders in energy transition.
What are the main drivers of energy transition?
There are two primary drivers. One is the urgent need to address the climate agenda. The other is to meet national energy security.
At the end of last year, from the climate perspective, two historic events took place.
First, the Earth has reached a milestone carbon concentration of 400 parts per million. Permanently, that is.
This leaves another 50 parts per million before we hit the threshold of 450 parts per million.
Beyond that threshold, the average global temperature will exceed 2°C, and scientists have predicted certain catastrophe for billions due to the impact of global warming.
Cognisant of this phenomenon, the other historic event involved 195 countries convening in Paris last December, and collectively adopting the first-ever universal and legally binding global climate agreement, which targets bringing global warming down to less than 2°C.
Malaysia has pledged to reduce our GHG (greenhouse gas) emissions intensity of the GDP (gross domestic product) by 45 per cent by 2030, relative to the emissions intensity of GDP in 2005, of which 35 per cent is on an unconditional basis, whereas condition for a further 10 per cent is upon receiving assistance from the global community.
The government of Malaysia recently announced that we will ratify the Paris agreement before the end of this year.
Going back to energy transition: what are the key technologies contributing to the success of energy transition?
The technologies include primarily renewable energy and energy efficiency.
According to the Global Status Report 2016 by REN21 (the Renewable Energy Policy Network for the 21st Century), as at the end of last year, total global capacity of renewable energy, including large hydropower, was 1,849GW (gigawatts).
This constituted 23.7 per cent of global electricity capacity.
Excluding large hydropower, total renewable energy capacity was 785GW, of which wind accounted for 433GW, or 55 per cent, and solar PV accounted for 227GW, or 29 per cent.
Although a latecomer, as at the end of last year, China had the largest solar PV installed capacity at 43.5GW, followed by Germany at 39.7GW, Japan at 34.4GW and the United States at 25.6GW.
On the home front, Malaysia, under the feed-in tariff mechanism, as administered by the Sustainable Energy Development Authority Malaysia, has approved, as at the end of July this year, a total of 393MW (megawatts) of solar PV applications, of which 260MW have achieved commercial operation.
Although this figure may seem minuscule by global comparison, I’m pleased to inform that Malaysia is ranked the world No. 3 in terms of solar PV production.
According to market research, last year, total global shipment of solar PV products amounted to 50.8GW, with China’s contribution at 48 per cent, Taiwan at 20 per cent, Malaysia at 12 per cent, and Japan at six per cent.
What is the key factor driving the recent boom in the solar PV market in the past decade?
We believe it is the right enabling policy that allows solar PV to experience a steep learning curve to achieve price reduction.
A report in June this year by Irena (the International Renewable Energy Agency) highlighted that the levellised cost of energy (LCOE) of solar PV had fallen by 58 per cent between 2010 and last year, and predicted that the LCOE of solar PV would fall another 59 per cent from this year to 2025, to as low as US$0.06 (around RM0.248) per kWh (kilowatt hour).
Before Irena’s report was published, on May 2, Dubai announced the lowest bid for a solar PV farm at US$0.0299 per kWh.
This was followed by Chile’s announcement of the new lowest bid at US$0.0291 per kWh on Aug 19 and, finally, another record low announced by Abu Dhabi on Sept 20, at only US$0.0242 per kWh.
Solar energy is a form of renewable energy with no commercial feedstock, just like hydro and wind.
Such forms of renewable energy have zero marginal cost and, in some countries, these technologies have gone beyond grid parity.
The implication of this is that a higher contribution of such forms of renewable energy will be able to reduce the average electricity tariff.
However, the key challenge for variable renewable energy, such as solar and wind, is for the electricity system to manage the intermittency.
As a result of this, in some countries, entire electricity systems are undergoing a paradigm shift, moving away from the archaic need of a baseload market to the creation of an energy-balancing market to manage the intermittency of variable renewable energy resources.
Solar energy is, indeed, a special renewable energy, possibly one of the few that truly democratises electricity through its ability to scale, thus, enabling individuals, communities and power utilities to be engaged as clean energy producers.
Central to enabling solar PV distributed generators to scale is the need for the electricity industry supply to be liberalised.
I’m delighted that this conference has prioritised a panel to discuss the “Democratisation of Electricity Supply Industry” this afternoon.
It has been said before that the future of energy is in electricity — not just any form of electricity, but specifically, renewable energy.
Solar PV has the potential to contribute to the energy mix significantly.
Studies have shown that there is enough solar energy reaching the Earth each hour to meet the entire world’s energy needs for a full year.
As the global population grows, energy demand will commensurate with the growth, and this is exacerbated by increasing energy needs by developing countries.
The growth in energy supply should be achieved with lower GHG emissions, and our choice of energy today must not erode the survival of future generations.
In closing, Lord Nicholas Stern, the World Bank’s past chief economist, is right: we live in the most exciting era in the history of mankind.
From the climate perspective, this century will determine whether we make it or break it.
Time is not on our side. Let the climate agenda be the main driver of today’s conference to spawn new innovations from the policy, technology, human capital development and financing perspectives, so that the solar PV agenda can be augmented.
True to the theme “Bridging Key Performers”, may this conference serve as an effective platform where thought leaders in solar PV bridge and converge their knowledge towards the greater social good.
On this note, I declare the Solar Photovoltaic Conference 2016 open.
Thank you.