Transitions to low carbon distributed energy systems in Malaysia: Environmental, economics and policy implications

Distributed energy systems’ levelized cost of energy is becoming competitive compared to fossil fuels. The only issue is the resource intermittency and the requirement for backup supply. This study aims to analyse the performance of distributed energy systems for the energy transition in Malaysia by using techno-economic and life cycle assessment under different scenarios. The environmental and economic impacts of rural electrification solar photovoltaic, wind turbine, mini-hydropower and biomass are analysed under the functional unit of 1 kWh energy production. Results show that the amount of greenhouse gas emissions avoided through distributed energy systems is about 1850 kg CO2/kWh/year, and if the implementation increased by only 10 %, Malaysia could reach its carbon emission reduction target of 45 % by 2030. Under a capacity of 50 %–80 %, the distributed energy system can replace fossil with a cost ranging from US$18.2/MWh to US$54.06/MWh. An increment of 0.05%–1.30 % is noted in system storage costs, ranging from US$41.8/MWh to US$70.1/MWh. This study highlights a 0.5 % reduction record in the payback period, with a 33 % decrement in capital cost from 4.50 to 15.50 years to only 3.07–10.91 years. Thus, the distributed energy system is viable in Malaysia with the need to improve infrastructure and policy support.