Potential threats to the rare Sumatran rhino, coral reefs, and other fragile animals helped galvanize a highly publicized fight last year to stop a coal-fired plant from being built on the east coast of Sabah, Malaysia.

The activists were armed with evidence that renewable energy such as hydropower, geothermal, and waste from the region's abundant oil palm mills could compete with coal in costs.

Activists won the impassioned battle when government officials killed the plant in February 2011. But they haven't yet achieved their goal of getting this ecotourism destination—one of the most biologically diverse spots on earth—to go renewable and serve as a model for other environmentally sensitive areas around the globe.

Instead, a 300-megawatt natural gas plant, announced earlier this month, is slated to ease Sabah's power crunch. The capacity of the proposed plant dwarfs that of renewable energy plants in Sabah. Renewable energy has been progressing slowly, and a key financial incentive for new projects is in limbo.

"The natural gas plant is our only viable option at the moment," Masidi Manjun, Sabah state minister of tourism, culture and environment, said by email. Natural gas is readily available offshore, he noted, and will generate the reliable electricity needed for economic growth. "This includes the development of new resorts, especially beach resorts, that are in short supply at the moment." He predicted renewable energy will have a significant role—in the future.

Natural Gas for Now

Activists knew a year ago this could be the outcome, at least in the short term.

"The government is going with the natural gas option to fuel our immediate energy needs," while making "cautious moves towards renewable energy," said Cynthia Ong, executive director of Malaysia-based Land Empowerment Animals People (LEAP). "During the anti-coal campaign, we took the position that the state needed to explore using its own natural gas resources (offshore) over importing coal . . . and of course we advocated strongly for renewable energy."

An environmental impact assessment hasn't been completed for the gas plant, but concerns aren't likely to be as high as they were for the coal plant. Gas is a cleaner fuel, and the plant will be in an industrial area far from the ecosystems that ignited the coal debate.

Sabah, on the northern end of the island of Borneo, is part of a region known as the Coral Triangle. Its rugged terrain and coral reefs have brought it world acclaim for its biodiversity and beauty.

The coal plant was planned along Sabah's coastline, 12 miles (19 kilometers) from the border of the Tabin Wildlife Reserve, Malaysia's largest animal park and one of the last remaining habitats for the Sumatran rhinoceros. The world's smallest rhinoceros at only about 4.3 feet (1.3 meters) tall, the Sumatran rhino is one of the most critically endangered species on Earth, with only 200 remaining in areas of Indonesia and Malaysia, according to the International Rhino Foundation. Poachers, hunters, and encroaching habitats have trimmed the number of rhinos on Borneo to an estimated 30 to 50. (For some rhinos, it's too late already. The Javan rhino in Vietnam recently was declared extinct by conservationists for many of the same reasons. In South Africa, more than 1,000 rhinos have been slaughtered in the past six years.)

The Tabin reserve also includes Pygmy elephants, Bornean orangutans, sun bears, and leopards.

But in addition to being an important wildlife habitat, Sabah's east coast has experienced unplanned power outages due to the lack of electrical capacity. Almost all of its power comes from dirty and unreliable diesel plants that the government wants to replace with cleaner sources.

Currently, fossil fuels account for about 90 percent of power capacity in Sabah. The challenge, is "how to green the mix in an economically viable way," says Daniel Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley.

Ong recruited Kammen, an adviser to National Geographic's Great Energy Challenge initiative, in 2010 to study energy options for a coalition of five nongovernmental organizations dubbed GREEN Surf (Sabah Unite to Re-Power the Future).

Kammen's research team concluded that hydropower and biomass waste projects could be cost-competitive with coal, with geothermal slightly less so (but competitive with natural gas). The researchers highlighted palm oil waste as having the potential to produce up to 700 megawatts of power by 2020.

Malaysia is the second largest producer of palm oil in the world, and Sabah has more acreage under cultivation—3.5 million acres in 2010—than any other region of the country.

"Our process was to do the math, do the assessment, come up with a plan," Kammen said in an interview. "We went in not knowing what would work out."

Kammen traveled to Sabah to present his findings at a public meeting that was broadcast on local television. He also met individually with local officials, meetings he believes were critical to helping persuade government officials to back down from the proposed coal power plant.

By that time, the coal controversy already had stretched over several years, with two previous proposed sites dropped partly because of community opposition to such environmental impacts as ash ponds and carbon dioxide emissions.

LEAP and other environmental and civil society organizations also had complained that the environmental impact assessment (EIA) for the coal plant failed to adequately consider impacts on marine and animal life, and climate change. They said the assessment also listed species that aren't present in Sabah while omitting others such as the rhinoceros. Ong said those involved in the EIA process showed a lack of understanding of principles of environmental protection. For example, during one informal meeting, she recalls, a consultant working on the EIA said there was "no issue with fish, because fish could swim away."

Ong said many government officials were supportive of the anti-coal campaign in private meetings, but "the way politics works in Malaysia if the top guy says something you don't oppose it." But she said she believes the proposed coal plant became such a hot local political issue that Prime Minister Najib Razak felt compelled to stop it.

A statement issued in February 2011 by Musa Aman, Sabah state government's chief minister, indicated that Najib made the call in recognition that "one of Sabah's greatest assets is its natural attractions and still somewhat pristine environment."

Najib has been trying to position Malaysia as a leader in reducing carbon emissions.

At the 2009 climate change conference in Copenhagen, Najib pledged to cut carbon dioxide emissions by 40 percent from 2005 levels by 2020. Malaysia enacted a renewable energy law in 2011 that, among other things, created a Sustainable Energy Development Authority.

A premium tariff was established, enabling renewable energy producers to sell their power to utilities at prices roughly 50 percent above the current rate.

In Sabah, two oil palm biomass plants totaling about 25 megawatts of capacity have qualified for that premium tariff, as well as two small hydro plants totaling about 6.5 megawatts of capacity, according to Malaysia's Sustainable Energy Development Authority.

A company named Tawau Green Energy plans to build a 30-megawatt geothermal plant on Sabah's east coast. But the tariff isn't available for new renewable energy projects in Sabah at this time, said SEDA spokesman Wei-nee Chen. He said by email that the central government "is in talks with the state government of Sabah for them to contribute to the renewable energy fund. Once an agreement has been reached, then the (premium) tariff will be opened to Sabah for new projects."

Kammen's research team calculated that the income from electricity sales at the current tariff wouldn't quite be enough to cover the cost of operating an oil palm waste plant. But the researchers said the projects could be cost-competitive when taking into account potential carbon credits.

Creating a Renewable Industry

Palm biomass projects aren't without environmental concerns.

Louis Verchot, the leading climate change scientist for the Bogor, Indonesia-based Center for International Forestry Research, said using oil palm waste to produce electricity generally is a good idea because such waste usually is burned or left to decompose slowly.

However, he cautioned, if palm oil waste production generates profits, it could create economic incentives to expand oil palm plantations, leading to more deforestation.

Malaysia already has suffered greatly from deforestation of its hardwoods and peatlands. Verchot's team has published several analyses over the past two years that have shown that such biomass cultivation has a negative effect on the atmosphere and on natural habitat. That's especially true if the cultivation occurs on peatlands, which naturally store carbon.

Ong said her group has had a few meetings with Sabah's big oil palm players on the possibility of generating electricity from palm oil waste. But, she said, "It was a little bit of a challenge to convince them to pioneer what was basically going to be a new industry. The bottom line is their focus."

LEAP instead is working with a group of indigenous oil palm farmers on a small project to convert waste into biomass pellets, in hopes of proving its viability as a commercial enterprise.

Ong said she is optimistic about renewable energy over the long term, but believes it will be up to the people to engage the government and "provoke and take leadership in pioneering the renewable energy industry." LEAP is putting together a Southeast Asia renewable energy group and also has been asked to help an anti-dam group in Sarawak, Sabah's Borneo neighbor.

Said Masidi Manjun, Sabah's environment minister: "Renewable energy will not only have a significant role in the future but perhaps is the only viable option if the world is serious about conservation and tackling climatic change . . . . This is the way forward-that is, if we are interested in saving the world."