[Sponsored article] This month’s UN Climate Change Conference, widely known simply as COP25, ended in Madrid with delegates agreeing to a compromise deal on cutting greenhouse gas emissions that left many people disappointed. However, the Malaysian state of Sarawak on Borneo – a Southeast Asian island shared between Malaysia, Brunei and Indonesia – is moving ahead with its ambitious 10-year plan to lead the region in sustainability and renewable energy (RE). State-owned energy provider Sarawak Energy is taking the lead in pushing the adoption of RE in the nation, fuelled by its large renewable hydropower resources. Chief on its agenda is to help fulfil one of the UN’s 17 Sustainable Development Goals (SDG), which involves producing affordable and clean energy. Abdul Hamed Sepawi, chairman of the company, said it hopes to achieve 100 per cent electrification across the state by 2025. “Rural population electricity coverage is at 92 per cent, while overall state domestic coverage is at 96.4 per cent – representing significant [increases] from 56 per cent and 79 per cent, respectively, in 2009,” he said. “Carbon emissions from the state’s electricity system have decreased 77 per cent in the last decade, contributing to Malaysia’s [2015 COP21] target of [a] 45 per cent reduction by 2030.” Energy choices made in Asia-Pacific will impact [on] energy security and environmental sustainability on the global level Michelle Yeoh, Malaysian actress and UN Development Programme goodwill ambassador Under Sarawak Energy’s stewardship, Sarawakians enjoy electricity rates of 6.2 US cents per kilowatt hour – 38 per cent lower than prices in Peninsular Malaysia and among Southeast Asia’s lowest unsubsidised tariffs. By offering an affordable, reliable electricity supply, Sarawak Energy has attracted bulk power customers such as Asia Advanced Materials, Asia Minerals, OM Holdings, Press Metal and Tokuyama to the Samalaju Industrial Park, to help fulfil Sarawak’s goal of achieving a high-income status by 2030. The company organised its inaugural Sustainability and Renewable Energy Forum (SAREF 2019) with the Ministry of Utilities Sarawak in Kuching, Malaysia, on December 10 and 11. The conference was attended by more than 1,000 delegates, prominent experts, business leaders, champions of sustainability and renewable energy, government agencies and media partners from Malaysia, Singapore, Thailand, Indonesia, the Philippines, mainland China, Hong Kong, Taiwan, Japan, Australia, New Zealand, the United Kingdom and the United States. Renewables are commercially viable, cost-competitive and deployable at large scale … Clean energy investments are cheaper than the cost of climate change – and they make sense Michelle Yeoh Sarawak Energy, which is a member of the UN Global Compact Network Malaysia and aligns business operations and corporate responsibilities to the SDGs attracted speakers from the UN Development Programme, International Hydropower Association, NGOs and the World Bank to its high-level event. Internationally renowned Malaysian actress Michelle Yeoh, who is a UN Development Programme goodwill ambassador, said in her keynote speech that energy consumption worldwide rose 2.3 per cent last year – nearly twice the average rate of growth since 2010. This has led to a 1.7 per cent increase in energy-related carbon dioxide emissions, she said. “Energy choices made in Asia-Pacific will impact [on] energy security and environmental sustainability on the global level,” Yeoh said. “Renewables are commercially viable, cost-competitive and deployable at large scale. “Clean energy investments are cheaper than the cost of climate change – and they make sense.” Renewable energy certificates SAREF 2019 – part of plans for of a biennial thought leadership forum and 10-year campaign focusing on sustainability and the role of renewable energy in delivering the United Nations Sustainable Development Goals by 2030 – marked several new milestones for Sarawak Energy, including the launch of Renewable Energy Certificates (RECs) – each representing the environmental benefits of 1 megawatt hour (1MWh) of RE generated from the company’s Batang Ai hydroelectric plant. Although the use of RECs to offset carbon emissions from energy use is common in developed economies, such as the US and the European Union, the RECs issued during SAREF 2019 were the first in Sarawak. The certificate is regulated by the Tradable Instrument for Global Renewable registry, an online platform for transparent, secure and reliable tracking of RECs. It was established to provide best practice guidelines and Carbon Disclosure Project (CDP) standards for tracking and reporting of REC and to provide assurance to buyers of the integrity of each REC transaction Jennifer Martin, executive director of the Centre for Resource Solutions, also one of the speakers for SAREF 2019’s plenary session on REC, highlighted the three main factors that help determine market structure. What is important is doing what you are preaching – and Sarawak Energy is all action … We can learn from neighbouring countries and have Asian benchmarks Benjamin C. Abalos Jnr, former mayor of Mandaluyong city, the Philippines “First, it is vital to have a market framework in place that allows voluntary procurement,” she said “The next step is developing market infrastructure that provides a method for trading, tracking, and giving confidence to the transactions in the market. This is where RECs play an incredible role. “Finally, in well-developed markets there are many different ways of procuring RE. “While RECs underline all of these options, the [choices] are designed to meet buyer needs. “What a small home is looking for in terms of buying RE may be very different from the needs of a large industrial customer that has a single large manufacturing facility, or a company like Starbucks that has thousands of small retail outlets.” Malaysia’s own REC registry, Malaysia Green Attribute Tracking System, was launched in October – the pivotal first step in creating a vibrant local REC marketplace. Benjamin C. Abalos Jnr, who introduced the Philippines' first green government building programme while mayor of Mandaluyong city from 2007 to 2016, praised Sarawak Energy’s efforts to lead RE conversation in Southeast Asia. “What is important is doing what you are preaching – and Sarawak Energy is all action,” he said. “This conference is very successful based on the speakers and number of projects. We can learn from neighbouring countries and have Asian benchmarks.” Grids and hydrogen Blessed with abundant hydropower resources, Sarawak, which is expected to be 99 per cent electrified next year, now plays an important role in realising the Borneo Grid with first power export to West Kalimantan across the Indonesian border since 2016. Sarawak Energy is also in talks with Bornean neighbours Brunei and the Malaysian state of Sabah for potential interconnections, to advance Sarawak’s aspiration of becoming a regional powerhouse. Hydropower accounts for 75 per cent of the state’s total generation mix and Sarawak Energy plans to incorporate more renewables such as large-scale solar power to account for 4 per cent of the mix by 2030. In May, Sarawak launched Southeast Asia’s first integrated hydrogen production plant and refuelling station in Kuching and introduced Sarawak’s first hydrogen-powered buses under the management of Sarawak Economic Development Corporation. The construction and operation of the pilot research facility was undertaken by Sarawak Energy in collaboration with Linde EOX Sdn Bhd. The state plans to build six more hydrogen refuelling stations as part of efforts to generate a greater understanding of how Sarawak can make its transport sector greener. Sharbini Suhaili, group CEO of Sarawak Energy, said the company is exploring the possibility of placing solar panels on its existing lakes. As 2.5 acres (1 hectare) of land is needed to house panels to produce 1MW of solar power, existing lakes are used as alternatives so that land does not have to be cleared. Malaysia’s federal government plans to have RE provide 20 per cent of the country’s total generation mix by 2025 – up from its present level of 6 per cent – but this figure does not include hydropower. If hydropower were to be calculated, the current generation mix would reach 22 per cent of RE. Suhaili, an active advocate for this plan, said that the generation mix target can then be raised further to 30 per cent of RE. Sustainable investment comes to the fore Promod Dass, deputy CEO of RAM Holdings, said Sarawak Energy’s plan to lead the RE conversation over the next decade reflects the growing awareness of environmental, social and governance (ESG) risk and sustainability in Malaysia over the past three years. “At the early stages, sustainability and corporate social responsibility were viewed [as] similar,” Dass, who is also CEO of RAM Sustainability, said. “Today, more Malaysian companies are embracing sustainability and are increasingly becoming aware that their ESG risks are being analysed by investors, banks and credit rating agencies. “The sustainable finance marketplace is almost at the tipping point of exponential growth over the next three years. “The newly set-up Joint Committee on Climate Change, spearheaded by BNM [the Central Bank of Malaysia] and the Securities Commission Malaysia have called for an accelerated response in transitioning Malaysia to a low-carbon economy,” Dass said. Today, more Malaysian companies are embracing sustainability and are increasingly becoming aware that their ESG risks are being analysed by investors, banks and credit rating agencies Promod Dass, deputy CEO of RAM Holdings “This, combined with a confluence of sustainability reporting requirements for Bursa Malaysia-listed companies, BNM’s value-based intermediation led by the Islamic banking industry, growing traction received by three separate global initiatives, namely the [UN’s] Principles of Responsible Investment [and] Banking and [Sustainable] Insurance, will accelerate responsible finance.” The Malaysian government’s strategic investment fund, Khazanah Nasional Berhad, the government pension fund, and the Employees Provident Fund are all PRI signatories. Seohan Soo, CEO of AmInvestment Bank, said that while large companies have long been required to make disclosures about their environmentally friendly initiatives, it was now time for the other businesses to catch up. “This will create better economic impact, as Malaysian corporates can do good while at the same time benefiting from cost savings,” he said, adding that local pension funds have set aside billions of ringgit for ESG investments. SAREF 2019 showed clearly that there is no one path to a sustainable energy future, but rather it requires a confluence of objectives through partnerships with diverse stakeholders.