Malaysian energy sector was highly dependent only on a single
source of energy – crude oil before 1980. The four fuel
diversification policy was introduced and implemented in
Malaysia after the occurrence of two international oil crisis and
quantum leaps in prices in the year 1973 and 1979 [6]. Faced with
the possibility of prolonged energy crisis, the government called
for the diversification of energy resources other than crude oil. The
fuel diversification strategy was incorporated into the Malaysian
National Energy Policy in order to achieve a more balanced
consumption [7]. The alternative energy resources available at that
time were hydropower, natural gas and coal as there were large
untapped indigenous hydropower and natural gas reserves, while coal was considered an abundant worldwide resource with a very
low and stable price