This article first appeared in Forum, The Edge Malaysia Weekly on July 18, 2022 - July 24, 2022

In May 2019, the first hydrogen-powered buses in Southeast Asia were introduced in Kuching. They are fuelled by a hydrogen production plant and refuelling station that can produce 130kg of hydrogen per day — a proof-of-concept.

This was followed by grand plans from various international industry heavyweights to produce green hydrogen on a commercial scale in Sarawak, powered by its massive hydropower resources. The H2biscus Green Hydrogen project in Bintulu is being developed by a high-profile consortium comprising Samsung Engineering, Posco (one of the world’s largest steelmakers), Lotte Chemical and the Sarawak Economic Development Corporation (SEDC). This project aims to produce 630,000 tonnes of green ammonia, 460,000 tonnes of green methanol and 7,000 tonnes of green hydrogen per year.

Similarly, the H2X-Thales-SEDC hydrogen export facility in Samalaju is expected to produce 970,000 tonnes of green ammonia and 170,000 tonnes of green hydrogen per year, while the Sumimoto-ENEOS-SEDC hydrogen plant in Bintulu is projecting up to 10,000 tonnes of green hydrogen per year. The Petronas-ENEOS partnership to produce and transport hydrogen was announced in September 2021, but no production figures have been released yet. Altogether, these huge volumes will require a lot of energy.

Sarawak has a competitive advantage in green energy as it has abundant hydropower, which produces 75% of its energy. Almost all its current energy generation is being sold and consumed, with a small amount (6% of 2019 electricity generation, increasing every year since 2016) being exported to Kalimantan, Indonesia. Sarawak’s electricity consumption of 10mwh per capita is more than twice Malaysia’s national average of 4.6mwh per capita. Most of this excess electricity consumption is likely used by the various smelters and manufacturers in the Samalaju Industrial Park.

In addition, Sarawak’s hydropower capacity factor (ratio of actual output over maximum possible output) is 71%, high compared with global standards. According to the International Renewable Energy Agency, both small and large hydropower projects’ weighted average capacity factors are around 50%, with most projects in the range of 25% to 80%. This suggests that there is little room for much excess hydroelectricity to be generated anytime soon, which then begs the question, where would the electricity needed to produce green hydrogen come from?

The upcoming Baleh dam, which is expected to be commissioned in 2026, will have a capacity of 1,285mw, enough to produce about 161,000 tonnes of green hydrogen per year. However, calculations show that the projects above require 560,000 tonnes of green hydrogen, which would require well over 4,000 MW. This does not even include the additional electricity that will be required to produce ammonia and methanol from hydrogen.

There has been no recent news of other dams or large power plants being developed in Sarawak. The Baram dam was shelved in November 2015, owing to protests over the displacement of indigenous communities. It was the fourth mega dam planned under the Sarawak Corridor of Renewable Energy (SCORE) programme. There are also scant updates on SCORE, which aims to build 12 mega dams by 2030. Given that it takes many years to develop and build a mega dam, it is very unlikely that SCORE will be able to meet its initial target

In 2020, 95% of hydrogen was produced from fossil fuels, which emit a lot of carbon. Using green energy to electrolyse water produces green hydrogen with zero carbon emissions. That is why so many major companies are keen to jump on this bandwagon as shareholder pressure to decarbonise picks up. The Government Pension Fund of Norway, the world’s largest sovereign wealth fund, with over 

US$1.3 trillion (RM5.77 trillion) in assets, has been actively divesting from coal and oil. Closer to home, Tenaga Nasional Bhd’s share price has slumped in the past five years as foreign investors reduce their exposure to coal-powered generation.

Despite the enthusiasm for green hydrogen, the largest impact that green energy has on reducing carbon emissions is in direct use of electricity for decarbonisation, such as in electric vehicles or just everyday use of electricity, according to the UK Climate Change Committee’s Sixth Carbon Budget Methodology Report (2020). Hydrogen production, Direct Air Capture and synthetic fuels are relatively inefficient uses of electricity and should have a lower priority. Following this logic, only surplus hydroelectricity should be directed to green hydrogen production.

Building mega dams is a complex undertaking, with extensive deforestation leading to biodiversity loss, ecosystem damage, habitat fragmentation and displacement of communities. It is a powerful tool to be deployed with care and consideration for entire ecosystems’ co-exis­tence, not just humanity’s need for more green energy. Decarbonisation is part of the greater sustainability picture and should not be mistaken as the only objective to be maximised.

According to the Intergovernmental Panel on Climate Change (IPCC), hydropower’s lifecycle emissions vary widely by project, but in median is one of the lowest compared with other energy sources. Its median grams of carbon dioxide equivalent per kilowatt hour (gCO2eq/kWh) emitted is 24, versus 820 for coal, 490 for gas, 48 for solar and 12 for wind. This includes estimates on overall infrastructure and supply chain emissions as well as biogenic and methane emissions.

Nevertheless, hydropower emissions depend on many factors, including water and air temperatures, vegetation and soil types in the re­servoir and upstream watershed, and watershed management practices. In fact, some poorly planned hydropower plants can have emissions far exceeding those of coal plants. Therefore, any hydropower developments need to be done with the utmost caution, and in dialogue with the feasibility of other energy sources such as solar, wind and nuclear.

There is no clear evidence that all these green hydrogen projects in Sarawak, which are driven by very different players from around the world, are being coordinated by a higher authority. If they proceed over the next few years, there will be trouble brewing as they suddenly realise that electricity does not grow on trees.

While there is a Hydrogen Economy and Technology Road Map, produced by the Ministry of Environment and Water and the Ministry of Science, Technology and Innovation at the national level, the document itself is not publicly available for reference. Furthermore, Malaysia has a poor track record of achieving its lofty national targets, as performance indicators are rarely tracked and shared. Just look at what became of Wawasan 2020 as it passed us right by two years ago.

There is much room for improvement on the transparency and communications of these grand plans. Corporations, think tanks and academics can add much value to the whole discussion. Having more perspectives in the crafting of policy will lead to better outcomes, as there is more fertile sharing of innovative ideas and stronger checks and balances in decision-making. This is a more collaborative and productive approach, compared to hiring strategy consultants for millions of ringgit to produce complex road maps and then wash their hands of the execution.

The defining challenge of this generation is climate change, which is already upon us. Wildfires, floods, droughts, hurricanes and other extreme weather events have been increasing in frequency and severity, leading to the tragic loss of lives and livelihoods. This is “code red for humanity”. The wicked problem of climate change can be solved only with everyone working together.

Justin Liew Jin Soong is a research associate at Sustainable Development Solutions Network Asia, Sunway University. Leong Yuen Yoong is professor of practice at Sustainable Development Solutions Network Asia and Jeffrey Sachs Centre on Sustainable Development, Sunway University.

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