Least Cost Option for Optimum Energy Penetration in Malaysia

Abstract

Malaysia is one of the few developing countries rich in natural resources and it aims to achieve a high renewable energy penetration by the end of 2030. Malaysia’s energy sectors are rapidly evolving due to increasing energy demand in the country. Therefore, the use and development of renewable energy should be emphasized, not only to reduce its dependence on fossil fuel resources, but also to reduce the impact of fossil fuels on climate change. This study aims to comprehensively review renewable energy resources and non-renewable energy resources that can be utilised at least possible costs. Malaysia currently relies heavily on fossil fuels such as natural gas, coal and crude oil for its energy production. This paper explores the energy sector in Malaysia in broad terms, and particularly examines the diversification of its energy production to achieve a least cost configuration. The roles of renewable energy and nuclear energies as alternatives to close the gap of depleting fossil fuels and growing energy demands to improve energy supply security in fuel diversification are also explored using system dynamics to provide a clear understanding of the least cost option for an optimum energy penetration for Malaysia.