Energy Efficiency Report 2007
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Energy Efficiency Report 2007 as PDF for free.
More details
- Words: 5,403
- Pages: 27
15 MAY 2007[Energy Efficiency Technology] | 421‐629
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN INDUSTRIAL SECTOR
[Vigneswaran KUMARAN] | 277492 Coordinator: Dr. Lu Aye Department of Civil and Environmental
V Kumaran
Digitally signed by V Kumaran DN: cn=V Kumaran, c=MY Reason: I am the author of this document Date: 2009.06.18 12:08:40 +07'00'
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Abstract
This report attempts to delineate the impact of Energy Efficiency Technologies (EET) in the Industrial Sector in Malaysia vis‐à‐vis the future energy demand. A holistic approach was envisaged to demonstrate the paramount importance of evolving Malaysian energy policies inter alia the energy production, consumption and management, and thus in the culmination of energy efficiency technology policies. In order to generate an exclusive analysis of future energy demand and quantify this in respect to implementation of EET in the industry, a statistical assumption was made to apply the Pareto rule and Simple Ratio method. Additionally, case studies modeled by the Malaysian government for implementation of EET in industry were used to complement the available fiscal and energy data for quantitative impact analysis. Keywords: Energy efficiency technologies, industrial sector, future energy demand, case studies, quantitative impact analysis
2 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Aim The method and approach integrated in generating this report is designed to meet the following objectives: • Outline the National Energy Policy development vis‐à‐vis Energy Efficiency Technology (EET) • Provide a distilled Energy Supply and Demand analysis for Industrial Sector • Describe the present Energy Efficiency Technology in Industry • Quantify the future Energy Demand due to the impact of EET
3 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Contents
Abstract
Aim
3
1.0
Introduction
7
2.0
Energy Policy Development
10
3.0
Energy Demand and Supply
12
4.0
Energy Efficiency Technology (EET) in Malaysian Industry
14
5.0
Case Study of EET Model in Industry
16
6.0
Future Energy Demand: Quantitative Analysis
17
7.0
Conclusion
2
20
21
22
A2 Energy Demand Curve Estimates without EET Impact
23
A3 Energy Demand Curve Estimates with EET Impact
24
A4 Energy Savings and Quantitative Analysis Calculations
25
A5 Energy Generation Mix and Power Producers’ Capacity
26
A6 Generation Mix and Power Producers’ Generation
27
A7 Sales of Electricity and Electricity Consumers
28
Figure 1 Industrial Fuel Intensity in Selected ASEAN Countries 1980‐2000
13
Figure 2 Energy Demand Curve (without EET) from 1990 to 2000
23
References and Notes Appendix
A1 Examples of Energy Efficiency Technology
Figures
4 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Figure 3 Energy Demand Estimates (without EET) from 2010 to 2020
23
Figure 4 Energy Demand Estimates with EET Impact from 2010 to 2020
24
Tables Table 1 Final Commercial Energy Demand by Source
8
Table 2 Final Commercial Energy Demand by Sector
9
Table 3 Primary Commercial Energy Supply by Source
12
Table 4 Applicable Energy Efficient Technology for Malaysian Industry (MIEEIP Model) 14 Table 5 Energy Efficient Application in MIEEIP Industry Model (Case Studies)
16
Table 6 Potential Energy and Cost Saving
22
Table 7 List of EE Project for Second Phase of MIEEIP’s Demonstration Project
22
Glossary
CHP: Combined Heat and Power EET: Energy Efficiency Technology EPU: Economic Planning Unit EIB: Energy Information Bureau GDP: Gross Domestic Product MIEEIP: Malaysian Industrial Energy Efficiency Improvement Project OECD: Organisation of Economic Cooperation and Development PTM: Malaysian Energy Centre 5 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
1.0
INTRODUCTION
“Energy can neither be created nor destroyed”. It is an accepted empirical principle referred to as First Law of Thermodynamics. Theoretically, the world shall never run out of energy source. However, the availability of energy in its various physical forms, which have been indiscriminately consumed by generations of civilization, can and will deplete. This applies in particular to the energy sources from exhaustible mass such as fossil fuel and minerals. Therefore, the scrupulous use of this energy sources instrumented by efficient technologies is crucial to the existence and sustainable growth of any nation, and more so for a developing country. Importantly, energy efficiency technology offers a powerful and cost‐ effective tool for achieving a sustainable energy future [1]. A developing nation such as Malaysia, with strategic geographical location historically (Map 1) and exemplary political stability, increases its vulnerability to energy supply and demand equilibrium in the absence of succinct energy policy. Map1: Peninsular Malaysia, Sabah and Sarawak
Source: CIA World Factbook
A negative imbalance in this equilibrium, can adversely impact the sustained 6.5 % gross domestic product (GDP) growth achieved by Malaysia over the past 50 years of post‐ independent [2]. 6 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Malaysia is a country with diverse energy sources, both renewable and non‐renewable, such as petroleum, coal, coke, natural gas and hydroelectric. Its current population of 26.5 million [3] is estimated to reach 28.96 million in the year 2010, with an average growth projection of 1.6 % per year [4]. This expansion in population growth has strain on energy demand and energy intensity. Malaysian statistic reveals that per capita consumption has increased to 62.2GJA 1 (2005) from 52.9GJA (2000), and estimated to reach 76.5GJA in the year 2010 (refer Table1).
Table 1: Final Commercial Energy Demand1 By Source 1990 Source Petroleum Products Natural Gas2 Electricity Coal & Coke Total Per Capita Consumption (GJ)
1995
2000
2005
2010
PJ
%
PJ
%
PJ
%
PJ
%
PJ
%
414 45.7 71.8 21.5 553 29.9
74.9 8.3 13.0 3.9 100
676 81.1 141.3 29.8 928.2 44.3
72.8 8.7 15.2 3.2 100
820 161.8 220.4 41.5 1243.7 52.9
65.9 13.0 17.7 3.3 100
1023.1 246.6 310 52 1631.7 62.2
62.7 15.1 19.0 3.2 100
1372.9 350 420 75 2217.9 76.5
61.9 15.8 18.9 3.4 100
Source of compilation: Malaysia Seventh (1996-2000), Eighth (2001-2005) and Ninth (2006-2010) Plan, Economic Planning Unit (EPU), Malaysia 1 2
Refers to the quantity of commercial energy delivered to final consumers but excludes gas, coal and fuel oil used in electricity generation Includes natural gas used as fuel and feedstock consumed by the non-electricity sector
This increase in demand will deplete the countries non‐renewable resources by 2217PJA 2 , of which 45% will be from oil and petroleum reserves, while another 42% is derived from natural gas reserves. At present, the industrial sector is the second largest energy consumer (lagging the transport sector by mere 1.9%), at 38.6% of the total energy mix for the country (refer Table2).
1 2
GJA as Gigajoules Per Annum PJA as Petajoules Per Annum
7 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR Table 2: Final Commercial Energy Demand by Sector 1990 Sector Industrial1 Transport Residential & Commercial Non-Energy2 Agriculture & Forestry Total
1995
2000
2005
2010
PJ
%
PJ
%
PJ
%
PJ
%
PJ
%
213.5 220.9 67.3 18.5 32.8 553
38.6 39.9 12.2 3.3 5.9 100.0
337.5 327.8 118.8 125.4 18.7 928.2
36.4 35.3 12.8 13.5 2.0 100.0
477.6 505.5 162 94.2 4.4 1243.7
38.4 40.6 13.0 7.6 0.4 100
630.7 661.3 213 118.7 8 1631.7
38.7 40.5 13.1 7.3 0.5 100
859.9 911.7 284.9 144.7 16.7 2217.9
38.8 41.1 12.8 6.5 0.8 100
Source for compilation: Malaysia Seventh (1996-2000), Eighth (2001-2005) and Ninth (2006-2010) Plan, Economic Planning Unit (EPU), Malaysia 1 2
Includes manufacturing, construction and mining Includes natural gas, bitumen, asphalt, lubricants, industrial feedstock and grease
Against a global backdrop with an average world economic growth of 3.8 percent over a projection period until 2030 [5], Malaysia with sustained average GDP of 6.5 percent will potentially outpace the global energy demand growth and its energy supply capacity if stringent measures of energy management are not applied. Thus it is imperative that improvement in the efficient use of energy in all sectors and particularly the industrial, (which contributes more than a third of the GDP) is achieved to lower the impact on costly energy demand. As such, the Government of Malaysia has, throughout the years been actively evolving the nation’s energy policy to meet the increasing demand in general energy utilization. The Government of Malaysia had introduced policies for energy efficiency program implementation, apart from the use of alternative and renewable energy sources in the 7th Malaysia Plan, 1996‐2000 [6]. This has been a clear indication of the government’s stance in ensuring that the energy related industries and energy end‐users will enhance their efficient production and utilization of energy. 8 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
2.0
ENERGY POLICIES DEVELOPMENT
In order to comprehend the present situation of energy efficiency technology practice in Malaysia, it would be worthy to have a brief understanding of how the overall national energy policies evolved from the early 1970, as the nation began to experience the uprising tide of global economic expansion as well as the imminent international oil crisis. The following chronology highlights major energy policies development in Malaysia until the culmination of energy efficient sub‐policy [7]: •
Petroleum Development Act 1974 – The establishment of Petronas as the national oil company which was vested with the sole responsibility for exploration, development, refining, processing, manufacturing, marketing and distribution of petroleum products.
•
National Energy Policy 1979 – Sets the overall energy policy with broad guidelines on long‐term energy objectives and strategies to ensure efficient, secure and environmentally sustainable supplies of energy. The three primary objectives of National Energy Policy encircle supply, utilization and environmental aspect of energy.
•
National Depletion Policy 1980 – Introduced to safeguard the exploitation of natural oil reserves because of the rapid increase in the production of crude oil. The production of oil and gas was reduced significantly to cater for future generations use.
•
Four Fuel Diversification Policy 1981 – Designed to prevent over‐dependence on oil as the main energy resource, its aim was to ensure reliability and security of the energy supply by focusing on four primary energy resources: oil, gas, hydropower and coal. This policy was mooted by the international oil crisis in 1979 and the leap in oil prices subsequently.
9 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
•
Fifth Fuel Policy (Eighth Malaysia Plan 2001‐2005) – In the Eighth Malaysian Plan, Renewable Energy was announced as the fifth fuel in the energy supply mix. Renewable Energy is being targeted to be a significant contributor to the country's total electricity supply. With this objective in mind, greater efforts are being undertaken to encourage the utilization of renewable resources, such as biomass, biogas, solar and mini‐hydro, for energy generation.
•
Energy Efficiency and Renewable Energy (Ninth Malaysia Plan 2006‐2010) ‐ The Ninth Plan strengthens the initiatives for energy efficiency and renewable energy put forth in the Seventh and Eighth Malaysia Plan that focused on better utilisation of energy resources. An emphasis to further reduce the dependency on petroleum provides for more efforts to integrate alternative fuels.
The culmination of energy efficiency policy marks a new beginning in the Malaysian energy generation and consumerism. The policy sets forth to regulate and enhance the efficient use of energy in all aspects of industrial and commercial business via the promotion of energy efficiency technology. 10 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
3.0
ENERGY DEMAND AND SUPPLY
Energy demand and supply has increased by more than 60 % within the last 15 years (Table 2 and Table 3), and expected to increase further by 2010. The Industrial Sector (mining, manufacturing and electricity) has been the largest consumer until recently, been surpassed by the Transport Sector. Table 3: Primary Commercial Energy Supply1 by Source 1990 Source Crude Oil & Petroleum Products Natural Gas2 Hydro Coal & Coke Total
1995
2000
2005
2010
PJ
%
PJ
%
PJ
%
PJ
%
PJ
%
520.2 114.4 38.3 55.5 728.4
71.4 15.7 5.3 7.6 100
702.2 459.5 64.5 67.5 1293.7
54.3 35.5 5.0 5.2 100.0
988.1 845.6 104.1 65.3 2003.1
49.3 42.2 5.2 3.3 100.0
1181.2 1043.9 230 71 2526.1
46.8 41.3 9.1 2.8 100.0
1400 1300 350 77.7 3127.7
44.8 41.6 11.2 2.5 100.0
Source for compilation: Malaysia Seventh (1996-2000), Eighth (2001-2005) and Ninth (2006-2010) Plan, Economic Planning Unit (EPU), Malaysia 1
Refers to the supply of commercial energy that has not undergone a transformation process to produce energy. Non-commercial energy such as biomass and solar have been excluded 2 Excludes flared gas, reinjected gas and exports of liquefied natural gas
However, the percentage of energy consumed by industry is approximately 62 % of the total energy used in Malaysia, since 50.6 % of electricity 3 is consumed by industrial sector (refer Chart 4 and Chart 5) in addition to the 38.7 % of primary energy. Hence, the Industrial Sector is the largest energy consumer in Malaysia. Chart 5: Sales of Electricity of TNB, SESB and SESCO According to Sectors
Chart 6: Electricity Consumer of TNB, SESB and SESCO According to Sectors 0.4%
0.7% 0.1%
15.5% Public Lighting Mining
83.3%
Domestic Commercial Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
1.0% 0.1% 18.9%
Public Lighting Mining
50.6%
Domestic Commercial
29.4%
Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
3
Power sector consumes 30 % of primary energy supply
11 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Subsequent benchmarking of industrial energy consumption against developing countries (Figure 1), shows Malaysian industries’ energy efficiency and energy intensity can be improved further.
toe/GDP Industrial 1995 US Million
Figure 1: Industrial Fuel Intensity in Selected ASEAN Countries 1980‐2000 450 400 350 300
Phillipines
250 200
Thailand
150
Malaysia
100
Vietnam
50
Indonesia
0 1980
1985
1990
1995
1996
1997
1998
1999
2000
Year
Source: MIEEIP, PTM
A further analysis on the available non‐renewable sources reveals a non‐pleasant scenario in the coming decades, if Malaysia does not develop and implement succinct energy policies. The oil reserves are expected to exhaust in 19 years [2] at the current rate of 0.73 million bpd extraction. Conversely, natural gas reserve may indicate a more positive note, albeit still will deplete in 33 years [2]. Coal reserves are in abundance, however the local coal production is limited due to most reserves are in the interiors of the country and would incur large cost for extraction [8].
12 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
4.0
ENERGY EFFICIENCY TECHNOLOGY (EET) IN MALAYSIAN INDUSTRY
The energy efficiency technology (EET) advancement in Malaysia has been enhanced and strengthened with the establishment of Malaysia Industrial Energy Efficiency Improvement Project (MIEEIP). The project is co‐funded by the Malaysian Government (under the Ministry of Energy, Water and Communications, MEWC), United Nations Development Programme and the Malaysian private sector, and is executed by the Malaysia Energy Centre (PTM). This five‐year national initiative (1999‐2004) has been extended to June 2007 due to overwhelming participation from the industry. Based on energy audit activities carried out in eight energy intensive industrial sectors, it was reported that potential energy savings would amount to 7.1PJA. This is realised with an estimated capital expenditure of USD 26 million [9]. Apart from this, the Malaysian Energy Efficiency Plan (EEP) foresees a potential energy saving of above 1400 GWh over the equipment life‐time, equivalent to USD 62.6 million. The type of energy efficiency technology applicable for the energy intensity enhancement of an industry is very specific to that industry. The type of application in some of the industry modelled by MIEEIP is shown in Table 4.
Table 4: Applicable Energy Efficient Technology for Malaysian Industry (MIEEIP Model) No. 1
Sector Cement
2 3
Ceramic Food
4
Glass
5
7
Iron & Steel Pulp & Paper Rubber
8
Wood
6
Energy Saving Application High insulating bricks in rotary kiln burning zone; and/or Rotary kiln combustion control and management system Ceramic recuperator in sanitary ware muffle kiln Compact immersion tube juice pasteurisation; and/or Mechanical vapour recompression evaporator Energy efficient food blanching through steam recirculation Electric heating or glass furnace forehearth; and/or External sprayed-applied insulating fibers for furnace refrigerator Use of low excess air recuperative burners; and/or Improved ladle drying and preheating in small foundaries Radio frequency drying Improved paper drying system Drying air recirculation; and/or Insulation jackets for rubber injection press mold Flash steam and condensate recovery; and/or Automatic solid fuel feeding and combustion system Wood dust burning system
Source: MIEEIP, PTM
13 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
The above table provides a small fraction of the technologies available in the market to be utilised by the industry. There are number of Combined Heat and Power (CHP) efficient technology being promoted in Malaysia to proliferate the efficient use of primary energy such as natural gas [10]. The various EETs, but not exhaustive, have been listed in Appendix 1 for a quick perception of the progress of EET in Malaysia.
14 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
5.0
CASE STUDY OF EET MODEL IN INDUSTRY
This part of the report attempts to provide a brief overview of some of the Energy Efficiency Technology application being modelled by MIEEIP in the industry. Four case studies have been reviewed in this section and the potential energy and cost savings, along with the technology applied have been summarised in the following matrix. Table 5: Energy Efficient Application in MIEEIP Industry Model (Case Studies) Plant 1: Product: Capacity: Sub-sector: Energy Efficient Application:
Total Energy Saving Total Cost Saving Plant 2: Product: Capacity: Sub-sector Energy Efficient Application:
Total Energy Saving Water Saving Total Cost Saving
Cargill Palm Products Sdn Bhd Refined palm oil 450 kMTA Food Heat Recovery System Process control of Stearin Hold-up Tank heating Boiler fuel switching to Natural Gas Other maintenance activities (non-related) 24,522 GJ/annum USD 0.546 million/annum
Plant 3: Product: Capacity: Sub-sector: Energy Efficient Application:
JG Container Sdn Bhd Glass container 120 MTD Glass Replacement of 1970's with new glass furnace Annealing lehrs replaced with energy efficient LPG/NG fired lehr Recycle of cullet washing water 60,100 GJ/annum 8,250 m3/annum USD 0.514 milliom/annum
Plant 4: Product: Capacity: Sub-sector Energy Efficient Application:
Total Energy Saving Total Cost Saving
Total Energy Saving Fuel Saving Total Cost Saving
Pan-Century Edible Oils Refined Palm Oil 1000 kMTA Food Steam system optimization (using vacuum pump, pressure regulating valves, etc.) High efficiency motors Cooling tower modifications for thermal efficiency 35,000 GJ/annum USD 0.285 million/annum Malayawata Sdn Bhd Steel 700 kMTA Iron & Steel Two stage recuperator installation VSD for process cooling water pump Reheating furnace burner fuel atomisation Fuel pre-hetaing using flue gas 19,724 GJ/annum 2,210 T/annum USD 0.572 million/annum
Source: MIEEIP, PTM
The above case studies represent some of the typical energy inefficiencies in Malaysian industry that has the potential for large degree of improvement. These plants are among 6.7 million (refer Chart 6) industrial energy consumers that potentially require some form of energy efficiency tool to improve their energy intensity. 15 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
6.0
FUTURE ENERGY DEMAND: QUANTITATIVE ANALYSIS
In order to undertake the task of quantifying the impact of EET on future energy demand in the industrial sector, plausible assumptions are essential due to the dynamics of economy, social and political force that influence the energy demand in a country. The following are the assumptions expressed in deriving the quantitative impact of EET: •
Although the economic growth and energy demand are linked, the strength of the link varies among regions over time. Specifically, for the non‐OECD countries (excluding non‐OECD Europe and Eurasia), energy demand and economic growth have been closely correlated for much of the past two decades [5]
•
The population projection [4] for Malaysia had been taken at 1.6 % per annum over the period of analysis, which is from the year 2005 to 2020, hence the energy per capita rises in tandem
•
A linear correlation had been assumed between consumption per capita and time function as indicated by the per capita against year plot
•
Political influence had been thought to remain stable and current policies pertaining to the use of fossil fuel and renewable will progressively improve
•
Pareto principle of 80:20 is utilised to simplify the route of quantification, which provides a rather low figure of energy saving, compared to actual potential
•
MIEEIP energy audit data is considered as a random study of the Malaysian industry, therefore enabling a secondary assumption that all other cases in the sector have same level of improvement potential
•
Alternatively, the Simple Ratio Method was used to provide a comparison study of the potential energy saving affected by the use of EET. In this method, the following secondary assumptions were made:
16 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
o Total energy consumed is directly proportional to inefficient use of energy o Energy consumed includes both electrical and fuel energy o All consumers have certain degree of inefficiency and as the number of consumers increase, the cumulative effect of inefficiency becomes averaged to the largest consumer’s inefficiency and therefore creates proportional energy saving relative to the smallest consumer group energy saving o Other demand factors (such as maintenance, turnaround activity etc) are assumed constant and has insignificant cumulative effect. The figures in Appendices 2 and 3 have been generated using some of the above assumption. The curves obtained from the figures has regression (R square) factor between 0.98‐0.99, which indicates a strong linear relationship of the plots. The estimates of energy demand for the year 2010 to 2020 has a marginal error of ± 5%, due to data disparity. Figure 4 in Appendix 3 provides a comparison on the impact of EET when implemented in the industry, with the assumption that the implementation has been carried out earlier than 2010 to produce the effect. The first curve shows the possible energy demand being 1138 PJA in 2020, without the EET impact. However, a reduction of 5 % energy demand is observed in the second curve (1081 PJA). This reduction is observed for an energy saving of 57.3 PJA vis‐a‐vis EET application, and as calculated based on Pareto rule (Appendix 4). The third curve shows a reduction of 5 % in energy demand, using a value of 59.6 PJA as energy saving [9], which was obtained from a literature by Malaysia Energy Centre (PTM). Alternatively, via the Simple Ratio method, the fourth curve shows a reduction of 109PJA, which is about 9.6 % of energy demand. Although the estimated values’ error margin and impact order is in the same magnitude, the overall figure indicates a potential gain in energy utilisation with the application of EET. However, the error margin could be reduced with better set of data over a longer period of 17 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
analysis and a comprehensive industrial energy consumption data, which is lacking in this analysis.
18 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
7.0
CONCLUSION
A progressive nation such as Malaysia stands to gain more with better technologies. At present, Malaysia is a net exporter of energy, however, this advantage may not remain in decades to come, as its natural resources deplete. On a more positive note, Malaysia is evolving its energy policies effectively, albeit a little slower than many developing countries such as China and India. Subsequently, an effective implementation of the energy efficient policies and technologies will be the ultimate outcome anticipated to ensure future energy use optimisation. This report has shown the progressive policy development, the industrial energy demand and several case studies of Energy Efficiency Technology implementation in Malaysia. The attempt to quantify the impact of EET in the future energy demand for industry has been made with reasonable assumptions and limited available data. The impact of EET is seen to be assisting the country between five to ten percent of energy reduction between 2010 and 2020. This impact could be lesser or more, depending on the extent of EET implementation. The effective implementation of EET in five to ten years from now will depend on how the policies are regulated, how the consumers’ awareness of economic loss (in the absence of EET) is projected and the consumers’ capacity to embrace higher energy efficiency technologies. Although the analysis indicates lower energy consumption in the industry as an impact of EET implementation, this may not be the ultimate solution for future energy demand as the burgeoning economy and population will subsequently drive for higher energy requirement. A multifaceted synergized approach for technology and renewable energy development would probably be a more pragmatic solution. 19 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
REFERENCES
[1]
International Energy Agency (IEA), www.iea.org. Energy Technology Essentials (2007).
[2]
United Nations Development Programme (UNDP), www.undp.org.my. Achieving Industry Energy Efficiency in Malaysia(2006).
[3]
Economic Planning Unit (EPU), www.epu.gov.my. The Ninth Malaysia Plan (RMK9), 2006.
[4]
The Star Online, www.thestar.com.my. Malaysia Ninth Plan, March 31, 2006.
[5]
Energy Information Administration, www.eia.doe.gov/oiaf/ieo.world.html World Energy and Economic Outlook, International Energy Outlook 2006; Report No.:DOE/EIA‐0484(2006).
[6]
Economic Planning Unit (EPU), www.epu.gov.my. The Seventh Malaysia Plan (RMK7), 1996.
[7]
A. Rahman Mohamed, K.T. Lee. Energy for sustainable development in Malaysia: Energy policy and alternative energy. Energy Policy (2006); 34(15): 2388–2397
[8]
Economic Planning Unit (EPU), www.epu.gov.my. The Eighth Malaysia Plan (RMK8), 2001.
[9]
R. Ponnudorai. Concept Paper on EE Business Opportunity in Malaysia (2005); PTM, www.ptm.org.my
[10]
Phang AC. Potential of Gas Fired CHP in the Manufacturing Sector in Malaysia, Malaysian‐Danish Environmental Cooperation Programme (2005).
20 | P a g e
1,835,430 12,067 373,587 2,433
Annual Energy Consumption (GJ/annum) 1 Annual Energy Cost ('000 USD /annum) Total Energy Savings (Total GJ/annum) 1 Total Cost Saving ('000 USD /annum)
1
1,031,528 3,861 360,561 1,486
Wood 774,061 6,875 155,356 1,712
Ceramic 21,556,595 58,328 345,508 9,643
Cement 4,000,370 27,951 104,095 710
Glass
Food Iron & Steel Cement Glass Food Pulp & Paper Wood Ceramic
Boiler economiser & waste heat recovery Electrode Regulating System for EAF Energy Leakage Reduction Gob monitoring & fuel substitution Improve in fractionation plant cooling Steam absorption chiller Diesel generator flue gas drying Low thermal kiln Total
Source: Reference (8)
Sector
Project
Pulp & Paper 5,080,208 24,057 811,547 5,648
Iron & Steel 4,223,247 45,752 270,053 1,499
Energy Saving (annual) Energy GJ Energy Cost USD 167,087 620,000 26,222 3,123,429 9,180 257,143 1,780 400,571 1,900 111,429 13,116 213,143 39,955 284,571 16,107 137,143 275,347 5,147,429
611,307 4,831 162,472 1,232
Rubber
Table 7: List of EE Project for Second Phase of MIEEIP's Demonstration Project
1USD = RM 3.5
Source of Data: PTM Findings of the Energy Audits
Food
Sectors
Table 6: Potential Energy and Cost Saving Identified from the Factories Audited Under the MIEEIP, Malaysia 2004
39,112,746 183,721 2,583,179 24,363
Total
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 1: Examples of Energy Efficiency Technology
21 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 2: Energy Demand Curve Estimates without EET Impact Figure 2: Energy Demand Curve (without EET) from 1990 to 2010 2500
90
80
2000
70
60 y = 2.222x ‐ 4390. R² = 0.990
1500
50
Energy, PJ
y = 80.66x ‐ 160013 R² = 0.985
GJ 40 1000 30
20
y = 31.72x ‐ 62936 R² = 0.984
500
10
0
0 1985
1990
1995
2000
2005
2010
2015
Year Industry Energy Demand, PJ
Energy Demand, PJ
GJ/Capita
Figure 3: Energy Demand Estimates (without EET ) from 2010 to 2020 120
3500
3000
100
2500
Energy, PJ
80
GJ
2000
60 1500 40 1000
20
500
0 1985
0 1990
1995
2000
2005
2010
2015
2020
2025
Year Industry Energy Demand, PJ
Energy Demand, PJ
GJ/Capita
22 | P a g e
1985
190
290
390
490
590
690
790
890
990
1090
1990
Industry Energy Demand, PJ
1995
EE1 Impact on Industry (PA)
2000
2010
EE2 Impact on Industry (Ref)
Year
2005
EE3 Impact on Industry (SR)
2015
Figure 4: Energy Demand Estimates with EET Impact from 2010 to 2020
2020
2025
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 3: Energy Demand Curve Estimates with EET Impact
Energy, PJ
23 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 4: Energy Savings and Quantitative Analysis Calculations
Table 6: Potential Energy and Cost Saving Identified from the Factories Audited Under the MIEEIP, Malaysia 2004 Sectors
Food
Wood
Annual Energy Consumption (GJ/annum) 1 Annual Energy Cost ('000 USD /annum) Total Energy Savings (Total GJ/annum) 1 Total Cost Saving ('000 USD /annum)
1,835,430 12,067 373,587 2,433
1,031,528 3,861 360,561 1,486
Ceramic 774,061 6,875 155,356 1,712
Cement 21,556,595 58,328 345,508 9,643
Glass 4,000,370 27,951 104,095 710
Rubber 611,307 4,831 162,472 1,232
Pulp & Paper 5,080,208 24,057 811,547 5,648
Iron & Steel 4,223,247 45,752 270,053 1,499
Total 39,112,746 183,721 2,583,179 24,363
Source of Data: PTM Findings of the Energy Audits 1
1USD = RM 3.5
Using Pareto Analysis 1
Total Consumer of Energy in Industry (Electrical Cons.)
33740
Pareto Rule: 80% of inefficient use of energy in industry is caused by 20% of the energy consumer Number of consumers audited Energy saving reported in the Audit (for electricity) Percentage of this consumer Saving from 20% of the Industry
2
Simple Ratio Method Total Energy Consumed by 43 Consumers Total Energy Demand by Industry 2 Energy Saving reported in the Audit (Total) Total potential saving
43 0.365 PJA 0.127 % 57.28 PJA Electricity
39.11 630 6.824 109.92
PJA PJA PJA PJA
PJA - Peta Joule per Annum Based on reference (8) 1 0.5 % of Electricity Consumer - Refer Chart 5 & 6 2
24 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 5: Energy Generation Mix and Power Producers’ Capacity
Chart 1: Generation Plan Mix 10.3% 18.4% Coal 2.5% 0.3% 7.5% 1.9% 0.7%
Oil Distillate Diesel Biomass Hydro Gas Others
58.4% Source: Energy Commission, Government of Malaysia (www.st.gov.my)
Chart 2: Generation Capacity of Major Power Producers 0.5% 5.6% 3.5% 1.5% 1.5%
27.3%
TNB SESB SESCO IPP (Peninsular Malaysia) IPP (Sabah)
2.3%
IPP (Sarawak)
2.6%
Co‐Gen (Peninsular Malaysia) Co‐Gen (Sabah)
55.2%
Private Generation
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
25 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 6: Generation Mix and Power Producers’ Generation
Chart 3: Generation Mix in Malaysia 0.6% 2.8% 0.1%
5.8% 0.6% 23.5% Coal Gas Distillate Diesel Biomass Hydro Others
66.6%
Chart 4: Generation by Major Power Producers in Malaysia 0.4% 3.4% 1.1% 1.9% 1.9%
TNB
27.9%
SESB SESCO IPP (Peninsular Malaysia) IPP (Sabah)
59.8%
1.5%
IPP (Sarawak)
2.1%
Co‐Gen (Peninsular Malaysia) Co‐Gen (Sabah) Private Generation
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
26 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 7: Sales of Electricity and Consumers
Chart 5: Sales of Electricity of TNB, SESB and SESCO According to Sectors 1.0% 0.1% 18.9% Public Lighting Mining
50.6%
Domestic Commercial
29.4%
Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
Chart 6: Electricity Consumer of TNB, SESB and SESCO According to Sectors 0.4%
0.7% 0.1%
15.5% Public Lighting Mining Domestic
83.3%
Commercial Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
27 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN INDUSTRIAL SECTOR
[Vigneswaran KUMARAN] | 277492 Coordinator: Dr. Lu Aye Department of Civil and Environmental
V Kumaran
Digitally signed by V Kumaran DN: cn=V Kumaran, c=MY Reason: I am the author of this document Date: 2009.06.18 12:08:40 +07'00'
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Abstract
This report attempts to delineate the impact of Energy Efficiency Technologies (EET) in the Industrial Sector in Malaysia vis‐à‐vis the future energy demand. A holistic approach was envisaged to demonstrate the paramount importance of evolving Malaysian energy policies inter alia the energy production, consumption and management, and thus in the culmination of energy efficiency technology policies. In order to generate an exclusive analysis of future energy demand and quantify this in respect to implementation of EET in the industry, a statistical assumption was made to apply the Pareto rule and Simple Ratio method. Additionally, case studies modeled by the Malaysian government for implementation of EET in industry were used to complement the available fiscal and energy data for quantitative impact analysis. Keywords: Energy efficiency technologies, industrial sector, future energy demand, case studies, quantitative impact analysis
2 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Aim The method and approach integrated in generating this report is designed to meet the following objectives: • Outline the National Energy Policy development vis‐à‐vis Energy Efficiency Technology (EET) • Provide a distilled Energy Supply and Demand analysis for Industrial Sector • Describe the present Energy Efficiency Technology in Industry • Quantify the future Energy Demand due to the impact of EET
3 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Contents
Abstract
Aim
3
1.0
Introduction
7
2.0
Energy Policy Development
10
3.0
Energy Demand and Supply
12
4.0
Energy Efficiency Technology (EET) in Malaysian Industry
14
5.0
Case Study of EET Model in Industry
16
6.0
Future Energy Demand: Quantitative Analysis
17
7.0
Conclusion
2
20
21
22
A2 Energy Demand Curve Estimates without EET Impact
23
A3 Energy Demand Curve Estimates with EET Impact
24
A4 Energy Savings and Quantitative Analysis Calculations
25
A5 Energy Generation Mix and Power Producers’ Capacity
26
A6 Generation Mix and Power Producers’ Generation
27
A7 Sales of Electricity and Electricity Consumers
28
Figure 1 Industrial Fuel Intensity in Selected ASEAN Countries 1980‐2000
13
Figure 2 Energy Demand Curve (without EET) from 1990 to 2000
23
References and Notes Appendix
A1 Examples of Energy Efficiency Technology
Figures
4 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Figure 3 Energy Demand Estimates (without EET) from 2010 to 2020
23
Figure 4 Energy Demand Estimates with EET Impact from 2010 to 2020
24
Tables Table 1 Final Commercial Energy Demand by Source
8
Table 2 Final Commercial Energy Demand by Sector
9
Table 3 Primary Commercial Energy Supply by Source
12
Table 4 Applicable Energy Efficient Technology for Malaysian Industry (MIEEIP Model) 14 Table 5 Energy Efficient Application in MIEEIP Industry Model (Case Studies)
16
Table 6 Potential Energy and Cost Saving
22
Table 7 List of EE Project for Second Phase of MIEEIP’s Demonstration Project
22
Glossary
CHP: Combined Heat and Power EET: Energy Efficiency Technology EPU: Economic Planning Unit EIB: Energy Information Bureau GDP: Gross Domestic Product MIEEIP: Malaysian Industrial Energy Efficiency Improvement Project OECD: Organisation of Economic Cooperation and Development PTM: Malaysian Energy Centre 5 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
1.0
INTRODUCTION
“Energy can neither be created nor destroyed”. It is an accepted empirical principle referred to as First Law of Thermodynamics. Theoretically, the world shall never run out of energy source. However, the availability of energy in its various physical forms, which have been indiscriminately consumed by generations of civilization, can and will deplete. This applies in particular to the energy sources from exhaustible mass such as fossil fuel and minerals. Therefore, the scrupulous use of this energy sources instrumented by efficient technologies is crucial to the existence and sustainable growth of any nation, and more so for a developing country. Importantly, energy efficiency technology offers a powerful and cost‐ effective tool for achieving a sustainable energy future [1]. A developing nation such as Malaysia, with strategic geographical location historically (Map 1) and exemplary political stability, increases its vulnerability to energy supply and demand equilibrium in the absence of succinct energy policy. Map1: Peninsular Malaysia, Sabah and Sarawak
Source: CIA World Factbook
A negative imbalance in this equilibrium, can adversely impact the sustained 6.5 % gross domestic product (GDP) growth achieved by Malaysia over the past 50 years of post‐ independent [2]. 6 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Malaysia is a country with diverse energy sources, both renewable and non‐renewable, such as petroleum, coal, coke, natural gas and hydroelectric. Its current population of 26.5 million [3] is estimated to reach 28.96 million in the year 2010, with an average growth projection of 1.6 % per year [4]. This expansion in population growth has strain on energy demand and energy intensity. Malaysian statistic reveals that per capita consumption has increased to 62.2GJA 1 (2005) from 52.9GJA (2000), and estimated to reach 76.5GJA in the year 2010 (refer Table1).
Table 1: Final Commercial Energy Demand1 By Source 1990 Source Petroleum Products Natural Gas2 Electricity Coal & Coke Total Per Capita Consumption (GJ)
1995
2000
2005
2010
PJ
%
PJ
%
PJ
%
PJ
%
PJ
%
414 45.7 71.8 21.5 553 29.9
74.9 8.3 13.0 3.9 100
676 81.1 141.3 29.8 928.2 44.3
72.8 8.7 15.2 3.2 100
820 161.8 220.4 41.5 1243.7 52.9
65.9 13.0 17.7 3.3 100
1023.1 246.6 310 52 1631.7 62.2
62.7 15.1 19.0 3.2 100
1372.9 350 420 75 2217.9 76.5
61.9 15.8 18.9 3.4 100
Source of compilation: Malaysia Seventh (1996-2000), Eighth (2001-2005) and Ninth (2006-2010) Plan, Economic Planning Unit (EPU), Malaysia 1 2
Refers to the quantity of commercial energy delivered to final consumers but excludes gas, coal and fuel oil used in electricity generation Includes natural gas used as fuel and feedstock consumed by the non-electricity sector
This increase in demand will deplete the countries non‐renewable resources by 2217PJA 2 , of which 45% will be from oil and petroleum reserves, while another 42% is derived from natural gas reserves. At present, the industrial sector is the second largest energy consumer (lagging the transport sector by mere 1.9%), at 38.6% of the total energy mix for the country (refer Table2).
1 2
GJA as Gigajoules Per Annum PJA as Petajoules Per Annum
7 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR Table 2: Final Commercial Energy Demand by Sector 1990 Sector Industrial1 Transport Residential & Commercial Non-Energy2 Agriculture & Forestry Total
1995
2000
2005
2010
PJ
%
PJ
%
PJ
%
PJ
%
PJ
%
213.5 220.9 67.3 18.5 32.8 553
38.6 39.9 12.2 3.3 5.9 100.0
337.5 327.8 118.8 125.4 18.7 928.2
36.4 35.3 12.8 13.5 2.0 100.0
477.6 505.5 162 94.2 4.4 1243.7
38.4 40.6 13.0 7.6 0.4 100
630.7 661.3 213 118.7 8 1631.7
38.7 40.5 13.1 7.3 0.5 100
859.9 911.7 284.9 144.7 16.7 2217.9
38.8 41.1 12.8 6.5 0.8 100
Source for compilation: Malaysia Seventh (1996-2000), Eighth (2001-2005) and Ninth (2006-2010) Plan, Economic Planning Unit (EPU), Malaysia 1 2
Includes manufacturing, construction and mining Includes natural gas, bitumen, asphalt, lubricants, industrial feedstock and grease
Against a global backdrop with an average world economic growth of 3.8 percent over a projection period until 2030 [5], Malaysia with sustained average GDP of 6.5 percent will potentially outpace the global energy demand growth and its energy supply capacity if stringent measures of energy management are not applied. Thus it is imperative that improvement in the efficient use of energy in all sectors and particularly the industrial, (which contributes more than a third of the GDP) is achieved to lower the impact on costly energy demand. As such, the Government of Malaysia has, throughout the years been actively evolving the nation’s energy policy to meet the increasing demand in general energy utilization. The Government of Malaysia had introduced policies for energy efficiency program implementation, apart from the use of alternative and renewable energy sources in the 7th Malaysia Plan, 1996‐2000 [6]. This has been a clear indication of the government’s stance in ensuring that the energy related industries and energy end‐users will enhance their efficient production and utilization of energy. 8 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
2.0
ENERGY POLICIES DEVELOPMENT
In order to comprehend the present situation of energy efficiency technology practice in Malaysia, it would be worthy to have a brief understanding of how the overall national energy policies evolved from the early 1970, as the nation began to experience the uprising tide of global economic expansion as well as the imminent international oil crisis. The following chronology highlights major energy policies development in Malaysia until the culmination of energy efficient sub‐policy [7]: •
Petroleum Development Act 1974 – The establishment of Petronas as the national oil company which was vested with the sole responsibility for exploration, development, refining, processing, manufacturing, marketing and distribution of petroleum products.
•
National Energy Policy 1979 – Sets the overall energy policy with broad guidelines on long‐term energy objectives and strategies to ensure efficient, secure and environmentally sustainable supplies of energy. The three primary objectives of National Energy Policy encircle supply, utilization and environmental aspect of energy.
•
National Depletion Policy 1980 – Introduced to safeguard the exploitation of natural oil reserves because of the rapid increase in the production of crude oil. The production of oil and gas was reduced significantly to cater for future generations use.
•
Four Fuel Diversification Policy 1981 – Designed to prevent over‐dependence on oil as the main energy resource, its aim was to ensure reliability and security of the energy supply by focusing on four primary energy resources: oil, gas, hydropower and coal. This policy was mooted by the international oil crisis in 1979 and the leap in oil prices subsequently.
9 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
•
Fifth Fuel Policy (Eighth Malaysia Plan 2001‐2005) – In the Eighth Malaysian Plan, Renewable Energy was announced as the fifth fuel in the energy supply mix. Renewable Energy is being targeted to be a significant contributor to the country's total electricity supply. With this objective in mind, greater efforts are being undertaken to encourage the utilization of renewable resources, such as biomass, biogas, solar and mini‐hydro, for energy generation.
•
Energy Efficiency and Renewable Energy (Ninth Malaysia Plan 2006‐2010) ‐ The Ninth Plan strengthens the initiatives for energy efficiency and renewable energy put forth in the Seventh and Eighth Malaysia Plan that focused on better utilisation of energy resources. An emphasis to further reduce the dependency on petroleum provides for more efforts to integrate alternative fuels.
The culmination of energy efficiency policy marks a new beginning in the Malaysian energy generation and consumerism. The policy sets forth to regulate and enhance the efficient use of energy in all aspects of industrial and commercial business via the promotion of energy efficiency technology. 10 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
3.0
ENERGY DEMAND AND SUPPLY
Energy demand and supply has increased by more than 60 % within the last 15 years (Table 2 and Table 3), and expected to increase further by 2010. The Industrial Sector (mining, manufacturing and electricity) has been the largest consumer until recently, been surpassed by the Transport Sector. Table 3: Primary Commercial Energy Supply1 by Source 1990 Source Crude Oil & Petroleum Products Natural Gas2 Hydro Coal & Coke Total
1995
2000
2005
2010
PJ
%
PJ
%
PJ
%
PJ
%
PJ
%
520.2 114.4 38.3 55.5 728.4
71.4 15.7 5.3 7.6 100
702.2 459.5 64.5 67.5 1293.7
54.3 35.5 5.0 5.2 100.0
988.1 845.6 104.1 65.3 2003.1
49.3 42.2 5.2 3.3 100.0
1181.2 1043.9 230 71 2526.1
46.8 41.3 9.1 2.8 100.0
1400 1300 350 77.7 3127.7
44.8 41.6 11.2 2.5 100.0
Source for compilation: Malaysia Seventh (1996-2000), Eighth (2001-2005) and Ninth (2006-2010) Plan, Economic Planning Unit (EPU), Malaysia 1
Refers to the supply of commercial energy that has not undergone a transformation process to produce energy. Non-commercial energy such as biomass and solar have been excluded 2 Excludes flared gas, reinjected gas and exports of liquefied natural gas
However, the percentage of energy consumed by industry is approximately 62 % of the total energy used in Malaysia, since 50.6 % of electricity 3 is consumed by industrial sector (refer Chart 4 and Chart 5) in addition to the 38.7 % of primary energy. Hence, the Industrial Sector is the largest energy consumer in Malaysia. Chart 5: Sales of Electricity of TNB, SESB and SESCO According to Sectors
Chart 6: Electricity Consumer of TNB, SESB and SESCO According to Sectors 0.4%
0.7% 0.1%
15.5% Public Lighting Mining
83.3%
Domestic Commercial Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
1.0% 0.1% 18.9%
Public Lighting Mining
50.6%
Domestic Commercial
29.4%
Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
3
Power sector consumes 30 % of primary energy supply
11 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Subsequent benchmarking of industrial energy consumption against developing countries (Figure 1), shows Malaysian industries’ energy efficiency and energy intensity can be improved further.
toe/GDP Industrial 1995 US Million
Figure 1: Industrial Fuel Intensity in Selected ASEAN Countries 1980‐2000 450 400 350 300
Phillipines
250 200
Thailand
150
Malaysia
100
Vietnam
50
Indonesia
0 1980
1985
1990
1995
1996
1997
1998
1999
2000
Year
Source: MIEEIP, PTM
A further analysis on the available non‐renewable sources reveals a non‐pleasant scenario in the coming decades, if Malaysia does not develop and implement succinct energy policies. The oil reserves are expected to exhaust in 19 years [2] at the current rate of 0.73 million bpd extraction. Conversely, natural gas reserve may indicate a more positive note, albeit still will deplete in 33 years [2]. Coal reserves are in abundance, however the local coal production is limited due to most reserves are in the interiors of the country and would incur large cost for extraction [8].
12 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
4.0
ENERGY EFFICIENCY TECHNOLOGY (EET) IN MALAYSIAN INDUSTRY
The energy efficiency technology (EET) advancement in Malaysia has been enhanced and strengthened with the establishment of Malaysia Industrial Energy Efficiency Improvement Project (MIEEIP). The project is co‐funded by the Malaysian Government (under the Ministry of Energy, Water and Communications, MEWC), United Nations Development Programme and the Malaysian private sector, and is executed by the Malaysia Energy Centre (PTM). This five‐year national initiative (1999‐2004) has been extended to June 2007 due to overwhelming participation from the industry. Based on energy audit activities carried out in eight energy intensive industrial sectors, it was reported that potential energy savings would amount to 7.1PJA. This is realised with an estimated capital expenditure of USD 26 million [9]. Apart from this, the Malaysian Energy Efficiency Plan (EEP) foresees a potential energy saving of above 1400 GWh over the equipment life‐time, equivalent to USD 62.6 million. The type of energy efficiency technology applicable for the energy intensity enhancement of an industry is very specific to that industry. The type of application in some of the industry modelled by MIEEIP is shown in Table 4.
Table 4: Applicable Energy Efficient Technology for Malaysian Industry (MIEEIP Model) No. 1
Sector Cement
2 3
Ceramic Food
4
Glass
5
7
Iron & Steel Pulp & Paper Rubber
8
Wood
6
Energy Saving Application High insulating bricks in rotary kiln burning zone; and/or Rotary kiln combustion control and management system Ceramic recuperator in sanitary ware muffle kiln Compact immersion tube juice pasteurisation; and/or Mechanical vapour recompression evaporator Energy efficient food blanching through steam recirculation Electric heating or glass furnace forehearth; and/or External sprayed-applied insulating fibers for furnace refrigerator Use of low excess air recuperative burners; and/or Improved ladle drying and preheating in small foundaries Radio frequency drying Improved paper drying system Drying air recirculation; and/or Insulation jackets for rubber injection press mold Flash steam and condensate recovery; and/or Automatic solid fuel feeding and combustion system Wood dust burning system
Source: MIEEIP, PTM
13 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
The above table provides a small fraction of the technologies available in the market to be utilised by the industry. There are number of Combined Heat and Power (CHP) efficient technology being promoted in Malaysia to proliferate the efficient use of primary energy such as natural gas [10]. The various EETs, but not exhaustive, have been listed in Appendix 1 for a quick perception of the progress of EET in Malaysia.
14 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
5.0
CASE STUDY OF EET MODEL IN INDUSTRY
This part of the report attempts to provide a brief overview of some of the Energy Efficiency Technology application being modelled by MIEEIP in the industry. Four case studies have been reviewed in this section and the potential energy and cost savings, along with the technology applied have been summarised in the following matrix. Table 5: Energy Efficient Application in MIEEIP Industry Model (Case Studies) Plant 1: Product: Capacity: Sub-sector: Energy Efficient Application:
Total Energy Saving Total Cost Saving Plant 2: Product: Capacity: Sub-sector Energy Efficient Application:
Total Energy Saving Water Saving Total Cost Saving
Cargill Palm Products Sdn Bhd Refined palm oil 450 kMTA Food Heat Recovery System Process control of Stearin Hold-up Tank heating Boiler fuel switching to Natural Gas Other maintenance activities (non-related) 24,522 GJ/annum USD 0.546 million/annum
Plant 3: Product: Capacity: Sub-sector: Energy Efficient Application:
JG Container Sdn Bhd Glass container 120 MTD Glass Replacement of 1970's with new glass furnace Annealing lehrs replaced with energy efficient LPG/NG fired lehr Recycle of cullet washing water 60,100 GJ/annum 8,250 m3/annum USD 0.514 milliom/annum
Plant 4: Product: Capacity: Sub-sector Energy Efficient Application:
Total Energy Saving Total Cost Saving
Total Energy Saving Fuel Saving Total Cost Saving
Pan-Century Edible Oils Refined Palm Oil 1000 kMTA Food Steam system optimization (using vacuum pump, pressure regulating valves, etc.) High efficiency motors Cooling tower modifications for thermal efficiency 35,000 GJ/annum USD 0.285 million/annum Malayawata Sdn Bhd Steel 700 kMTA Iron & Steel Two stage recuperator installation VSD for process cooling water pump Reheating furnace burner fuel atomisation Fuel pre-hetaing using flue gas 19,724 GJ/annum 2,210 T/annum USD 0.572 million/annum
Source: MIEEIP, PTM
The above case studies represent some of the typical energy inefficiencies in Malaysian industry that has the potential for large degree of improvement. These plants are among 6.7 million (refer Chart 6) industrial energy consumers that potentially require some form of energy efficiency tool to improve their energy intensity. 15 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
6.0
FUTURE ENERGY DEMAND: QUANTITATIVE ANALYSIS
In order to undertake the task of quantifying the impact of EET on future energy demand in the industrial sector, plausible assumptions are essential due to the dynamics of economy, social and political force that influence the energy demand in a country. The following are the assumptions expressed in deriving the quantitative impact of EET: •
Although the economic growth and energy demand are linked, the strength of the link varies among regions over time. Specifically, for the non‐OECD countries (excluding non‐OECD Europe and Eurasia), energy demand and economic growth have been closely correlated for much of the past two decades [5]
•
The population projection [4] for Malaysia had been taken at 1.6 % per annum over the period of analysis, which is from the year 2005 to 2020, hence the energy per capita rises in tandem
•
A linear correlation had been assumed between consumption per capita and time function as indicated by the per capita against year plot
•
Political influence had been thought to remain stable and current policies pertaining to the use of fossil fuel and renewable will progressively improve
•
Pareto principle of 80:20 is utilised to simplify the route of quantification, which provides a rather low figure of energy saving, compared to actual potential
•
MIEEIP energy audit data is considered as a random study of the Malaysian industry, therefore enabling a secondary assumption that all other cases in the sector have same level of improvement potential
•
Alternatively, the Simple Ratio Method was used to provide a comparison study of the potential energy saving affected by the use of EET. In this method, the following secondary assumptions were made:
16 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
o Total energy consumed is directly proportional to inefficient use of energy o Energy consumed includes both electrical and fuel energy o All consumers have certain degree of inefficiency and as the number of consumers increase, the cumulative effect of inefficiency becomes averaged to the largest consumer’s inefficiency and therefore creates proportional energy saving relative to the smallest consumer group energy saving o Other demand factors (such as maintenance, turnaround activity etc) are assumed constant and has insignificant cumulative effect. The figures in Appendices 2 and 3 have been generated using some of the above assumption. The curves obtained from the figures has regression (R square) factor between 0.98‐0.99, which indicates a strong linear relationship of the plots. The estimates of energy demand for the year 2010 to 2020 has a marginal error of ± 5%, due to data disparity. Figure 4 in Appendix 3 provides a comparison on the impact of EET when implemented in the industry, with the assumption that the implementation has been carried out earlier than 2010 to produce the effect. The first curve shows the possible energy demand being 1138 PJA in 2020, without the EET impact. However, a reduction of 5 % energy demand is observed in the second curve (1081 PJA). This reduction is observed for an energy saving of 57.3 PJA vis‐a‐vis EET application, and as calculated based on Pareto rule (Appendix 4). The third curve shows a reduction of 5 % in energy demand, using a value of 59.6 PJA as energy saving [9], which was obtained from a literature by Malaysia Energy Centre (PTM). Alternatively, via the Simple Ratio method, the fourth curve shows a reduction of 109PJA, which is about 9.6 % of energy demand. Although the estimated values’ error margin and impact order is in the same magnitude, the overall figure indicates a potential gain in energy utilisation with the application of EET. However, the error margin could be reduced with better set of data over a longer period of 17 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
analysis and a comprehensive industrial energy consumption data, which is lacking in this analysis.
18 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
7.0
CONCLUSION
A progressive nation such as Malaysia stands to gain more with better technologies. At present, Malaysia is a net exporter of energy, however, this advantage may not remain in decades to come, as its natural resources deplete. On a more positive note, Malaysia is evolving its energy policies effectively, albeit a little slower than many developing countries such as China and India. Subsequently, an effective implementation of the energy efficient policies and technologies will be the ultimate outcome anticipated to ensure future energy use optimisation. This report has shown the progressive policy development, the industrial energy demand and several case studies of Energy Efficiency Technology implementation in Malaysia. The attempt to quantify the impact of EET in the future energy demand for industry has been made with reasonable assumptions and limited available data. The impact of EET is seen to be assisting the country between five to ten percent of energy reduction between 2010 and 2020. This impact could be lesser or more, depending on the extent of EET implementation. The effective implementation of EET in five to ten years from now will depend on how the policies are regulated, how the consumers’ awareness of economic loss (in the absence of EET) is projected and the consumers’ capacity to embrace higher energy efficiency technologies. Although the analysis indicates lower energy consumption in the industry as an impact of EET implementation, this may not be the ultimate solution for future energy demand as the burgeoning economy and population will subsequently drive for higher energy requirement. A multifaceted synergized approach for technology and renewable energy development would probably be a more pragmatic solution. 19 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
REFERENCES
[1]
International Energy Agency (IEA), www.iea.org. Energy Technology Essentials (2007).
[2]
United Nations Development Programme (UNDP), www.undp.org.my. Achieving Industry Energy Efficiency in Malaysia(2006).
[3]
Economic Planning Unit (EPU), www.epu.gov.my. The Ninth Malaysia Plan (RMK9), 2006.
[4]
The Star Online, www.thestar.com.my. Malaysia Ninth Plan, March 31, 2006.
[5]
Energy Information Administration, www.eia.doe.gov/oiaf/ieo.world.html World Energy and Economic Outlook, International Energy Outlook 2006; Report No.:DOE/EIA‐0484(2006).
[6]
Economic Planning Unit (EPU), www.epu.gov.my. The Seventh Malaysia Plan (RMK7), 1996.
[7]
A. Rahman Mohamed, K.T. Lee. Energy for sustainable development in Malaysia: Energy policy and alternative energy. Energy Policy (2006); 34(15): 2388–2397
[8]
Economic Planning Unit (EPU), www.epu.gov.my. The Eighth Malaysia Plan (RMK8), 2001.
[9]
R. Ponnudorai. Concept Paper on EE Business Opportunity in Malaysia (2005); PTM, www.ptm.org.my
[10]
Phang AC. Potential of Gas Fired CHP in the Manufacturing Sector in Malaysia, Malaysian‐Danish Environmental Cooperation Programme (2005).
20 | P a g e
1,835,430 12,067 373,587 2,433
Annual Energy Consumption (GJ/annum) 1 Annual Energy Cost ('000 USD /annum) Total Energy Savings (Total GJ/annum) 1 Total Cost Saving ('000 USD /annum)
1
1,031,528 3,861 360,561 1,486
Wood 774,061 6,875 155,356 1,712
Ceramic 21,556,595 58,328 345,508 9,643
Cement 4,000,370 27,951 104,095 710
Glass
Food Iron & Steel Cement Glass Food Pulp & Paper Wood Ceramic
Boiler economiser & waste heat recovery Electrode Regulating System for EAF Energy Leakage Reduction Gob monitoring & fuel substitution Improve in fractionation plant cooling Steam absorption chiller Diesel generator flue gas drying Low thermal kiln Total
Source: Reference (8)
Sector
Project
Pulp & Paper 5,080,208 24,057 811,547 5,648
Iron & Steel 4,223,247 45,752 270,053 1,499
Energy Saving (annual) Energy GJ Energy Cost USD 167,087 620,000 26,222 3,123,429 9,180 257,143 1,780 400,571 1,900 111,429 13,116 213,143 39,955 284,571 16,107 137,143 275,347 5,147,429
611,307 4,831 162,472 1,232
Rubber
Table 7: List of EE Project for Second Phase of MIEEIP's Demonstration Project
1USD = RM 3.5
Source of Data: PTM Findings of the Energy Audits
Food
Sectors
Table 6: Potential Energy and Cost Saving Identified from the Factories Audited Under the MIEEIP, Malaysia 2004
39,112,746 183,721 2,583,179 24,363
Total
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 1: Examples of Energy Efficiency Technology
21 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 2: Energy Demand Curve Estimates without EET Impact Figure 2: Energy Demand Curve (without EET) from 1990 to 2010 2500
90
80
2000
70
60 y = 2.222x ‐ 4390. R² = 0.990
1500
50
Energy, PJ
y = 80.66x ‐ 160013 R² = 0.985
GJ 40 1000 30
20
y = 31.72x ‐ 62936 R² = 0.984
500
10
0
0 1985
1990
1995
2000
2005
2010
2015
Year Industry Energy Demand, PJ
Energy Demand, PJ
GJ/Capita
Figure 3: Energy Demand Estimates (without EET ) from 2010 to 2020 120
3500
3000
100
2500
Energy, PJ
80
GJ
2000
60 1500 40 1000
20
500
0 1985
0 1990
1995
2000
2005
2010
2015
2020
2025
Year Industry Energy Demand, PJ
Energy Demand, PJ
GJ/Capita
22 | P a g e
1985
190
290
390
490
590
690
790
890
990
1090
1990
Industry Energy Demand, PJ
1995
EE1 Impact on Industry (PA)
2000
2010
EE2 Impact on Industry (Ref)
Year
2005
EE3 Impact on Industry (SR)
2015
Figure 4: Energy Demand Estimates with EET Impact from 2010 to 2020
2020
2025
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 3: Energy Demand Curve Estimates with EET Impact
Energy, PJ
23 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 4: Energy Savings and Quantitative Analysis Calculations
Table 6: Potential Energy and Cost Saving Identified from the Factories Audited Under the MIEEIP, Malaysia 2004 Sectors
Food
Wood
Annual Energy Consumption (GJ/annum) 1 Annual Energy Cost ('000 USD /annum) Total Energy Savings (Total GJ/annum) 1 Total Cost Saving ('000 USD /annum)
1,835,430 12,067 373,587 2,433
1,031,528 3,861 360,561 1,486
Ceramic 774,061 6,875 155,356 1,712
Cement 21,556,595 58,328 345,508 9,643
Glass 4,000,370 27,951 104,095 710
Rubber 611,307 4,831 162,472 1,232
Pulp & Paper 5,080,208 24,057 811,547 5,648
Iron & Steel 4,223,247 45,752 270,053 1,499
Total 39,112,746 183,721 2,583,179 24,363
Source of Data: PTM Findings of the Energy Audits 1
1USD = RM 3.5
Using Pareto Analysis 1
Total Consumer of Energy in Industry (Electrical Cons.)
33740
Pareto Rule: 80% of inefficient use of energy in industry is caused by 20% of the energy consumer Number of consumers audited Energy saving reported in the Audit (for electricity) Percentage of this consumer Saving from 20% of the Industry
2
Simple Ratio Method Total Energy Consumed by 43 Consumers Total Energy Demand by Industry 2 Energy Saving reported in the Audit (Total) Total potential saving
43 0.365 PJA 0.127 % 57.28 PJA Electricity
39.11 630 6.824 109.92
PJA PJA PJA PJA
PJA - Peta Joule per Annum Based on reference (8) 1 0.5 % of Electricity Consumer - Refer Chart 5 & 6 2
24 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 5: Energy Generation Mix and Power Producers’ Capacity
Chart 1: Generation Plan Mix 10.3% 18.4% Coal 2.5% 0.3% 7.5% 1.9% 0.7%
Oil Distillate Diesel Biomass Hydro Gas Others
58.4% Source: Energy Commission, Government of Malaysia (www.st.gov.my)
Chart 2: Generation Capacity of Major Power Producers 0.5% 5.6% 3.5% 1.5% 1.5%
27.3%
TNB SESB SESCO IPP (Peninsular Malaysia) IPP (Sabah)
2.3%
IPP (Sarawak)
2.6%
Co‐Gen (Peninsular Malaysia) Co‐Gen (Sabah)
55.2%
Private Generation
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
25 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 6: Generation Mix and Power Producers’ Generation
Chart 3: Generation Mix in Malaysia 0.6% 2.8% 0.1%
5.8% 0.6% 23.5% Coal Gas Distillate Diesel Biomass Hydro Others
66.6%
Chart 4: Generation by Major Power Producers in Malaysia 0.4% 3.4% 1.1% 1.9% 1.9%
TNB
27.9%
SESB SESCO IPP (Peninsular Malaysia) IPP (Sabah)
59.8%
1.5%
IPP (Sarawak)
2.1%
Co‐Gen (Peninsular Malaysia) Co‐Gen (Sabah) Private Generation
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
26 | P a g e
ENERGY EFFICIENCY TECHNOLOGY IN MALAYSIA: THE IMPACT ON FUTURE ENERGY DEMAND IN THE INDUSTRIAL SECTOR
Appendix 7: Sales of Electricity and Consumers
Chart 5: Sales of Electricity of TNB, SESB and SESCO According to Sectors 1.0% 0.1% 18.9% Public Lighting Mining
50.6%
Domestic Commercial
29.4%
Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
Chart 6: Electricity Consumer of TNB, SESB and SESCO According to Sectors 0.4%
0.7% 0.1%
15.5% Public Lighting Mining Domestic
83.3%
Commercial Industrial
Source: Energy Commission, Government of Malaysia (www.st.gov.my)
27 | P a g e
Related Documents
Energy Efficiency Report 2007
May 2020 11
Energy Efficiency &
June 2020 19
Energy Efficiency
November 2019 32
Energy Efficiency
June 2020 16
Energy Efficiency
June 2020 16