Renewable Energy Status in Malaysia 4 December 2012

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Wei-nee Chen

Sustainable Energy Development Authority Malaysia

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Background

Definition of Renewable Energy

Renewable Energy (RE) is any form of primary energy

from recurring and non-depleting indigenous resources.

“Renewable resources” means the recurring and non-

depleting indigenous resources or technology as set out

in the first column of the Schedule of the RE Act 2011

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Malaysia: Renewable Energy Policies Renewable Energy Development in Malaysia

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8TH Malaysia Plan (2001 -

2005)

• RE as the 5th Fuel

• Implied 5% RE in energy mix

9th Malaysia Plan

(2006 – 2010)

• Targeted RE capacity to be connected to power utility grid:

• 300 MW – Peninsular Malaysia; 50 MW - Sabah

• Targeted power generation mix:

• 51 % natural gas, 26 % coal, 9 % hydro, 8 % oil, diesel 5 %, biomass 1 % (2010)

• Carbon intensity reduction target: 40% lower than 2005 levels by 2020

RE as of 31st December

2010

• Connected to the utility grid (as of 2011): 68.45 MW (20 % from 9th MP target)

• Off-grid: >1GW (private palm oil millers and solar hybrid)

Malaysian National Renewable Energy Policy & Action Plan

Approved by Cabinet on 2nd April 2010 Policy Statement: Enhancing the utilisation of indigenous renewable energy resources to contribute towards national electricity supply security and sustainable socio-economic development.

Objectives:

To increase RE contribution in the national power generation mix;

To facilitate the growth of the RE industry;

To ensure reasonable RE generation costs;

To conserve the environment for future generation; and

To enhance awareness on the role and importance of RE.

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Strategic Thrust 2: Provide Conducive Business Environment for RE

Strategic Thrust 3: Intensify Human Capital Development

Strategic Thrust 5: Create Public Awareness & RE

Policy Advocacy Programmes

Strategic Thrust 4: Enhance RE Research and

Development

Strategic Thrust 1: Introduce Legal and

Regulatory Framework

Strategic Thrusts of the National RE Policy

National RE Goals (excl EPP-10)

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5,000

10,000

15,000

20,000

25,000

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50

MW

Year

Solar PV

Solid Waste

Mini Hydro

Biogas

Biomass

2030 3.5 GW

2020 2.1 GW

2050 11.5 GW

2020: 2,080 MW (11%) 11.3 GWh (9%)

2030: 4,000 MW (17%) 17.2 GWh (12%)

2050: 21.4 GW (73%) 44.2 GWh (24%)

2015: 985 MW (6%) 5.4 GWh (5%)

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Malaysia: Technical Potential of PV

Population 28.8 million (2012)

Lies directly within the sunbelt

Technical potential of PV ≈ 7.8 TWh,

about 21% of residential and commercial

electricity demand in 2005

Regulatory Framework

Renewable Energy Act 2011

RE Act: an Act to provide for the establishment and implementation of a special tariff system to catalyze the generation of renewable energy and to provide for related matters.

Comprises of 9 Parts and 65 Clauses

Part I: Preliminary Part II: FiT System

Part III: Connection, Purchase and Distribution of RE

Part IV: Feed-in Tariff

Part V: Renewable Energy Fund

Part VI: Information Gathering Powers

Part VII: Enforcement

Part VIII: General

Part IX: Savings and Transitional

Passed in Parliament: 27th April 2011 11

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Subsidiary Legislations

1. Renewable Energy (Feed-in Approval and Feed-in Tariff Rate) Rules 2011

2. Renewable Energy (Technical and Operational Requirements) Rules 2011

3. Renewable Energy (REPPA) Rules 2011

4. Renewable Energy (Criteria for Renewable Resources) Regulations 2011

5. Renewable Energy (Allocation from Electricity Tariffs) Order 2011

6. Renewable Energy (Recovery of Moneys by Distribution Licensee) Rules 2011

7. Renewable Energy (Administrative Fees) Rules 2011 http://seda.gov.my/go-home.php?omaneg=00010100000001010101000100001000000000

000000000000&s=1207

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Feed-in Approval & Feed-in Tariff Rules 2011

1) Individuals (≥ 21 years) Malaysians Foreign individuals: limited to solar ≤ 72 kWp

2) Companies (ROC) All legally registered companies and businesses Direct ownership Shareholding limitations:

1)DL: ≤ 49% within its distribution area 2)Foreign companies: ≤ 49%

3) Other entities (body corporate, society, co-operative society, firm, local authority)

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Giving False or Misleading Information

Para 26 (Feed-in Approval & Feed-in Tariff Rate Rules 2011) A person who fails to disclose or omit to give any relevant information or document to the Authority under these Rules, or provides to the Authority under these Rules any information or document that he knows or has reason to believe is false or misleading, commits an offence and shall, on conviction, be liable to a fine not exceeding RM300,000 or imprisonment for a term not exceeding 3 years or both.

– SEDA Malaysia established on 1st September 2011 under the SEDA Act 2011.

– implement, manage, monitor & review the Feed-In Tariff system

– advise the Minister & Government Entities on all matters relating to sustainable energy

– to promote & implement national policy objectives for RE

– implement sustainable energy laws including the Renewable

Energy Act & recommend reforms

– promote private sector investment in sustainable energy sector

– measures to improve public awareness

– act as focal point on matters relating to sustainable energy &

climate change matters relating to energy

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SEDA Malaysia

FEED IN TARIFF MECHANISM

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1%

Source of Fund for FiT

38.4%

25.3%

20.2%

15.2%

1.0%

Subsidized Fuel for Power Generation

Generation cost

Transmission & Distribution Cost

Customer Service Charge

FiT levy

Source of Funding

2011 - additional tariffs collection from electricity bills

Every RM100/Month - RM1 for RE

Additional 1% (proposed in 2013)

The size of RE fund will determine the RE target for Malaysia

Benefit

polluters pay concept

will not affect 75% of electricity consumers (≤ 300 kWh/mth)

encourages EE and DSM

RE Law Schedule: Biogas

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RE Law Schedule: Biomass

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RE Law Schedule: Small Hydropower

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Basic FiT Rate Solar PV

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Bonus FiT Rate Solar PV

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Minimum RM 2.1 billion savings of external cost to mitigate CO2 emissions (total 42 million tonnes avoided from 2011 to 2020, on the basis of RM 50 per tonne of external cost);

Minimum RM 19 billion of loan values for RE projects, which will provide local banks with new sources of revenues (at 80% debt financing for RE projects);

Minimum RM 70 billion of RE business revenues generated from RE power plants operation, which can generate tax income of minimum RM 1.75 billion to Government;

> 50,000 jobs created to construct, operate and maintain RE power plants (on the basis of 15-30 job per MW).

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Potential Impact of National RE Policy by Year 2020

FiT Implementation on 1st December 2011

e-FiT Online System

• FiT quota approvals on ‘first come, first served basis’ – upon submission of complete application & document

• FiT quota is dynamic 25

SEDA Malaysia Portal: www.seda.gov.my

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Annual RE Quota as on 1st Dec 2011 (Up to 2014)

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Year

Biogas Biogas -

Sewage

Biomass Solid-

Waste

Small

Hydro

Solar

PV <

1MW

Solar

PV >

1MW

Total

(MW)

MW MW MW MW MW MW MW

2011/

2012 20 10 60 20 30 10 40 190

2013 20 10 50 30 30 10 40 190

H1 2014 10 5 25 15 45 5 20 125

Source: www.seda.gov.my

No. of Approved Applications (31st October 2012)

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Biogas, 12, 2% Biomass, 11, 2%

Small Hydro, 13, 2%

Solar PV (Ind), 511, 76%

Solar PV (Non-Ind), 121, 18%

Approved Capacities (MW) (31st October 2012)

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Biogas, 19.33, 5%

Biomass, 102.39, 26%

Small Hydro, 100.55, 26%

Solar PV (Ind), 10.6,

3%

Solar PV (Non-Ind),

153.47, 40%

• 2,000 homes (2 MW Q4 2012, 6 MW 2013) released on 24th September 2012

• Rules: max 12 kW per application

• Each individual max. 2 applications

• Go through the usual e-FiT online system 30

Way forward: 2,000 Solar Rooftop Programme

Sustainable Energy Development Authority (Seda) Malaysia chairman Tan Sri Dr Fong Chan Onn told a press conference: “We have allocated the 2,000-household quota this year, and next year we will allocate a further 10,000. Our target is to encourage the massive involvement of the public in solar power systems.” Source: Green Prospect Asia (August 2012)

Proposed Changes to FiT (Effective 2013)

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Renewable energy

installation having an

installed capacity of

Solar PV Basic

rate

Annual

Degression

Proposal

2013 2014

1. up to and including 4

kilowatts RM 1.23 8% 8% 8%

2. above 4 kilowatts, and

up to and including 24

kilowatts RM 1.20 8% 8% 8%

3. above 24 kilowatts,

and up to and

including 72 kilowatts RM 1.18 8% 12% 12%

4. above 72 kilowatts,

and up to and

including 1 megawatts RM 1.14 8% 12% 12%

5. above 1 megawatts

kilowatts, and up to

and including 10

megawatts

RM 0.95 8% 12% 12%

6. above 10 megawatts

kilowatts, and up to

and including 30

megawatts

RM 0.85 8% 12% 12%

PROPOSED ADJUSTED DEGRESSION : BASIC RATE

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Renewable energy

installation having any one

or more of the following

criteria in addition to basic

rate

Solar PV Bonus

rate

Annual

degression

Proposal

2013 2014

1. use as installation in

building or building

structures +RM 0.26 8% 8% 8%

2. use as building

materials +RM 0.25 8% 8% 8%

3. use as locally

manufactured or

assembled solar

photovoltaic module

+RM 0.03 8% 0% 0%

4. use of locally

manufactured or

assembled solar

inverters

+RM 0.01 8% 0% 0%

PROPOSED DEGRESSION: BONUS RATE

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Other Proposed New Rules on Solar PV

• Any non-individual feed-in approval holder (FiAH) that has been revoked due to failure to comply with any of the feed-in approval (FiA) conditions will not be eligible to apply for any new solar PV for a moratorium of two (2) years;

• Ultimate shareholder limited to 5 MW solar PV – need to declare in advance;

• Rental of rooftop – non-revocable option-to-rent agreement; • Proposed additional processing fees for changes, assignment

/transfer of FiA; • PSS requirement – one per application otherwise a letter from

distribution licensee is required to support multiple connections; • For more details, visit www.seda.gov.my (download/ presentation

materials/28 November 2012 & 18 September 2012 workshops)

PV applications in Malaysia (Grid-connected)

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Residential: Solar Enclave Setia Eco Park, Malaysia

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PV Systems in Malaysia

470 kW, Macglo Steel Service Center, Shah Alam

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646 kW, Robert Bosch (M) Sdn Bhd, Bayan Lepas

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685 kW, PETRONAS @ KLCC Tower, Malaysia

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8 MW, Cypark Resources Bhd, Pajam, Malaysia

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Thank you

SEDA Malaysia, Galeria PjH, Level 9 Jalan P4W, Persiaran Perdana, Presint 4, 62100 Putrajaya, Malaysia.

Phone : +603-8870 5800

Email: fit@seda.gov.my

Web: www.seda.gov.my