Abstract for: Long Term Policy Analysis of Malaysia's Renewable Energy Fund Budget: A System Dynamics Approach

Malaysia has abundant potentials of renewable energy resources in bio-power, solar PV systems and small-scale hydropower. Feed in Tariff mechanism has been applied since 2011 in Malaysia to expand utilization of renewable energy for electricity generation. In this study a comprehensive system dynamics model is developed to simulate the impacts of assigning different Feed in Tariff rates for different potential renewable resources on the generation mix of Malaysia between 2011 and 2030. Results demonstrate that although the policy may lead to a satisfactory level of target achievement but the government may face an increasing shortage in its RE fund budget starting around 2019 unless it increases its income sources by rising the surcharges on electricity bills or decreases its expenditures by optimizing the amount of FiT payments in different periods. Sensitivity analysis illustrates that the more funding will not lead to a more sustainable generation mix unless it is paid in the right time and in the right direction. Using this model, policymakers can carry out analysis to determine the amount of money that must be collected from the electricity consumers as well as the amount of feed in tariff to be paid for different renewable resources in different periods.