Dato’ Ir Guntor Tobeng Shines A Light On Malaysia’s Renewable Energy Sector

It feels odd to note that Gading Kencana Development Sdn Bhd first took root on shaky ground, given its formidable reputation within the country’s renewable energy and energy efficiency industry, but that’s exactly how Dato’ Ir Guntor Tobeng puts it to The Peak. “I started my company because of the 1997 Financial Crisis,” says the Alor Setar, Kedah-born entrepreneur, who has been running the company full-time as its Co-Founder and Managing Director since 1998. “With the stock market flattened, everything was gone – business partners proved unreliable and it was a dog-eat-dog world – so I decided to prove I could build a company on my own.”

There’s proof enough now. Gading Kencana has made a name for itself as a premier energy service company that specialises in developing solar farms and providing businesses with consulting, design and installation services for energy-efficient solutions. Not only does the company pride itself on running what it describes as the world’s most resource-efficient, large-scale solar facility in Melaka, but its A-shaped rooftop solar PV system can be said to have helped propel Malaysia’s solar energy industry forward. An ever-ready participant in off-grid, hybrid and large-scale solar energy projects, Dato’ Guntor’s mission to build a sustainable and profitable business in energy conservation and renewable energy is leading him into the spotlight.

RAY OF LIGHT

An engineer by training, Dato’ Guntor’s first encounter with solar-powered products was just after he’d left Philips Malaysia, following a decade of service at the electronics company as a design engineer and regional marketing manager. “People told me it was the wrong time to start out on my own due to the Asian Financial Crisis, but I think it was the best time. Consumer products were the only things that were moving at that point, and I had some friends in Germany from my days with Philips who knew I’d left. They suggested I help them produce solar garden lights for export, so I went to see some of my other contacts and put up a factory in Pasir Gudang – and that was the beginning of my involvement in the solar business.”

Sensing there was also a gap in the local market waiting to be filled, Dato’ Guntor decided to introduce his products to Malaysian consumers. “Nobody dared to take on the challenge to educate the market at the time about solar technology – but I like challenges,” he smiles. “It was difficult to explain the concept to them, and many consumers weren’t convinced the system could work in Malaysia. Newspaper advertising was relatively cheap at the time, so we took out small advertisements every day as a marketing tool, and in a month, we’d make about MYR5,000 to MYR10,000 each month – enough to cover our advertising costs. We were able to sell our garden lights and we built our business up from there.

“Once people saw that our company was surviving and doing well, products from China started jumping into Malaysia and selling for half the price. From there, we moved on to solar street lighting. Everyone assumed it was an easy sell, but our clients came from the government – the local authorities and Public Works Department, for instance – so we needed to provide quotations and so forth. I realised I couldn’t sell solar street lights throughout Malaysia because 99 per cent of the country was already electrified, so the idea that came to me was to target dark junctions and accident-prone areas along the federal roads. We sold about 2,000 solar photovoltaic lighting systems – in fact, we managed to reduce the accident rate by 50 per cent there – and I was travelling to Baling through the Gerik road last month and saw that 70 of my street lights were still in place!”

Once again, would-be copycat competitors were eyeing Gading Kencana’s success, and solar street lights from China began to flood the market at a fraction of the cost. It was time for the company to transform itself again. “By then, the government was promoting rural Internet access, so we shifted to specialising in off-grid solar power, where we worked with Telekom Malaysia and Maxis to set up a stand-alone solar-powered system for satellite communication at remote settlements in East Malaysia. After that, we secured our biggest job thus far, amounting to MYR20 million: powering ICT equipment in Sabah and Sarawak’s rural libraries using solar PV systems.

“We completed it, learnt our lessons from any mistakes we made and improved on our experiences, and once the Sustainable Energy Development Authority Malaysia began its Feed-in Tariff (FiT) mechanism (allowing energy utilities to purchase renewable energy from producers), we already possessed lots of knowledge about the process of selling energy to the National Grid at a premium price.” Shortly after Gading Kencana received its FiT licence for an eight megawatt facility in 2011, it established Kompleks Hijau Solar in Ayer Keroh, Melaka – the first of its solar farms and a significant step into the arena of Malaysia’s renewable energy industry.

SHINE YOUR WAY

As with all new ventures, there were obstacles to confront and Gading Kencana’s first solar facility was no exception. “To me, solar energy is very much a financial engineering business,” explains Dato’ Guntor. “Even for our first small job, we spent a year approaching eight different banks and they all showed us the door because we were a SME company that had appeared from nowhere, with only our track record as backup. You need a big capital outlay to start and remain in this business, and in Kompleks Hijau Solar’s case, we required over MYR80 million to get it going – and trying to raise the funds was a real challenge.”

It helped, of course, that his wife and company Co-Founder, Datin Hasnah Awang, held an MBA and came from a banking background, which meant that she was able to help manage the funds once the bank loans finally came in, along with making provisions for a sinking fund capable of sustaining the company’s lifespan. “Engineers know how to fix things and get things done, but without money, there’s no project,” Dato’ Guntor notes. “I had to expand what I knew about getting access to funds. Bank Negara’s Entrepreneur Rehabilitation Fund, factoring facilities, term loans, and project financing – these were things I had to learn about on the way.”

Then there was the pressing issue of the land they’d bought in Hang Tuah Jaya, which wasn’t quite what they’d expected: “We were under the impression it spanned 25ac, but when we assessed it properly, it was only 18ac at most, and we had to make do with that! We also thought it was flat land, but it turned out to have a deep ravine – so the setup involved a lot of land treatment and engineering processes, which is why we say innovation is the way forward at Gading Kencana.” After collecting elliptical and solar radiation data, as well as conducting sun path studies, Dato’ Guntor’s team created a matrix of how the solar panels could be arranged. It was their extensive troubleshooting, combined with the invention of their A-shaped rooftop solar PV system (inspired by the lines of a traditional Malay house’s roof) that was the making of them.

“Our A-shaped roof captures 15 per cent more irradiance than the standard solar roof panels and you save on land area by 50 per cent. At last year’s PowerExpo Astana in Kazakhstan, our booth was next to China’s. They, with all their might, have the world’s largest solar farm, but we have the world’s most efficient one. On average, they need five acres to produce one megawatt, whereas we only require one and a half acres with our design. Being small, we’ve had to be clever – without innovation, which is key to our business, we’ll lose out to the big boys.”

Despite having plenty of competitors – both small and big – in hot pursuit, Dato’ Guntor is surprisingly generous when it comes to knowledge-sharing. Neither is it an issue that its A-shaped roof is frequently copied by other companies. “We don’t want to patent it – it’s a gift to the industry that should be shared because it’s the best design. Everyone in the region should follow it. Our competitors are our compatriots and we cannot let the renewable energy industry fail. The moment we let other companies fail, our industry’s banking rating sinks and the interest rate on financial loans rises. Looking at the big picture, the rating of failure is shared by us all. We have to ensure the industry grows, with the view that whoever can be the most efficient and competitive deserves to earn their FiT license and succeed in their enterprise.”

BRIGHTER THAN THE SUN

With one solar farm safely under their belt, Gading Kencana set about securing another MYR200 million for its next project, Kompleks Hijau Solar Bidor. “It wasn’t quite as difficult because we knew how to speak the banks’ lingo, and they saw us as a serious player who was hardworking and had never defaulted on a loan payment. That was the beginning of the big game,” Dato’ Guntor recalls. The 30MW plant, which spans just over 98ac, opened last November and is the company’s largest to date, although there are already numerous plans in the pipeline.

Inevitably, there’s been interest from overseas: Gading Kencana has begun building a 350MW solar facility in Vietnam, and has received similar invitations from Cambodia, Ethiopia and Saudi Arabia. But just as Dato’ Guntor makes it a priority to construct his solar farms using components that are 90 per cent locally manufactured, Malaysia remains his top priority. “There are at least 900 former mining ponds in Perak and they’re all extremely big. We’ve bought one piece of land that we’re developing in preparation for our move into floating solar farms. An even more interesting venture is the provision of a solar housing scheme in northern Malaysia, where it’s possible for someone to purchase a house while subsidising the balance of their bank loan through its solar income.

“The issue with would-be house owners is either that they’re not qualified to take out a bank loan or they have a steady salary, but it doesn’t leave them enough disposable income to pay their loan. Let’s say a person buys a house and takes a loan, and the loan repayment comes to MYR2,200 each month. We’ll install solar houses with a 20kW solar panel on the rooftop and if there’s additional free space on the ground, we can put solar panels there too, all of which feed into the grid. The revenue generated by these solar panels will help offset the loan, which means it’s easier for the Private Pension Administrator to guarantee the loan, the bank won’t worry about non-payment and the house owner only has to contribute MYR200 per month. Our plans are still on the drawing board and we’re in negotiations with a few land authorities, but if it’s all approved, we should begin by next year.”

Add that to an equation in which Malaysia’s Energy, Science, Technology, Environment and Climate Change Ministry has already set a target for 20 per cent of the country’s electricity to be generated from renewable sources by 2030 – a sizeable increase from the current figure of two per cent – and it looks like Dato’ Guntor is going to be a very busy man for the next decade or so. “With the present government’s objectives to decarbonise our economy and remove large-scale hydroelectric schemes from our renewable energy programme, we’re looking at big business opportunities worth MYR2 billion every year. In past years, growth in GDP has always been accompanied by a growth in power generation, and if we can decarbonise the link between the two, alternative energy will have to come in.

“By now, we’ve achieved grid parity, meaning the cost of generating energy from solar panels is cheaper than the cost of generating electricity from conventional methods. Solar power is natural, and it creates a win-win-win situation for the consumer, producer, generator and developer. Perhaps you and I can save our money instead of paying subsidies for the fossil fuels that are funnelled into our power plants. And,” he adds drolly, “I think we can even reduce our electricity bills too.”

TEXT RENYI LIM

ART DIRECTION AUDREY LIM

PHOTOGRAPHY KIM MUN/ HOPSCOTCH PHOTOGRAPHY