Renewable energy policy in Germany and Malaysia: success factors

Abstract

Energy-sectors in both developed and developing countries face three major challenges namely emission of greenhouse gases (GHGs), depletion of fossil fuel reserves, and increasing demands. Despite renewable energy retains many advantages over fossil-based energy, its wider dissemination is still restricted in many countries owing to techno-economic, societal and policy barriers. Renewable energy policy is meant to promote renewable energy by overcoming these barriers. Globally more than 140 countries had laid policy measures to promote the development of renewable energy, however, very few countries are successful. Germany is one of the successful countries in the world in developing renewable energy in terms of per capita installation and cumulative capacity expansion. Malaysia, on the other hand, undertook several initiatives in order to increase renewable energy uses to reduce dependency on fossil fuels and to contribute global effort to minimize GHG emissions but is not yet as successful as it desires. This paper examines renewable energy policy of both these countries, and identifies the key success factors in German case. We found that the main success factors of Germany were appropriate and dynamic FiT (Feed-in Tariff) mechanism. German FiT mechanism ensures marginal profits with the negotiated FiT rates.