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SEDA TNB FiT Feed in Tariff EcoSensa Solar Malaysia 2011
Citation preview
16/12/2011
1
RENEWABLE ENERGY DEVELOPMENT & FEED-IN
TARIFF IN MALAYSIA
1
SEDA Malaysia
Disclaimer
The information contained in this PowerPoint slides is for general purposes only. While the
Sustainable Energy Development Authority Malaysia (“SEDA Malaysia”) endeavours to keep the
information up to date and correct, the information displayed herein is subject to changes and
may no longer be accurate after the preparation date. SEDA Malaysia is not responsible for any
errors or omissions, or for the results obtained from the use of this information, nor do we
make any representation or warranty of any kind, express or implied, about the completeness,
accuracy, reliability, suitability or availability with respect to this PowerPoint slides or the
information contained in this PowerPoint slides for any purpose. Any reliance you place on such
information is therefore strictly at your own risk. In no event will SEDA Malaysia, the Ministry of
Energy, Green Technology and Water, the Government of Malaysia, or any of their related
corporations, agents, employees or consultants be liable to you or anyone else for any decision
made or action taken in reliance on the information in this PowerPoint slides or for any
damages whatsoever, including without limitation, special, indirect, or consequential damages
arising out of or related to the use or reliance of the information contained in this PowerPoint
slides , whether by action in contract, tort or otherwise howsoever.
2
16/12/2011
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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 PoliciesRenewable 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:
• 54.2% natural gas, 40.2% coal, 5.2% hydro, 0.2% oil,
• 0.2% Renewable Energy
• Carbon intensity reduction target: 40% lower than 2005 levels by 2020
RE as of 31st
December 2010
• Connected to the utility grid (as of 2010): 61.2 MW (17.5% from 9th MP target)
• Off-grid: >1GW (private palm oil millers and solar hybrid)
National RE Policy & Action Plan
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Malaysian National Renewable Energy Policy and 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
16/12/2011
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National RE Goals (excl EPP-10)
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-
5,000
10,000
15,000
20,000
25,000
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49
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50
MW
Year
Solar PV
Solid Waste
Mini Hydro
Biogas
Biomass
2030
3.5 GW2020
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%)
9
• New Key Economic Areas : Entry Point Project (EPP) 10: Solar
Power Capacity Initiative
• EPP 10 Target - 1.25GW solar power capacity connected to the
grid by 2020
Year Solar Power
Capacity
(Cumulative)
RE Capacity
(Cumulative)
RE Capacity Mix
2011 20MW 219 MW 1%
2015 295MW 1,275 MW 7%
2020 1,250MW 3,140 MW 14%
2030 3,100MW 7,088MW 25%
EPP 10 – Solar Power Capacity Initiative
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FEED IN TARIFF MECHANISM
Feed-in Tariff: Government Policy
• 10th Jun 2010: 10th Malaysia Plan (chapter 6)
• 15th Oct 2010: National Budget 2011 (paragraph 34)
• 25th Oct 2010: Economic Transformation Programme (chapter 6)
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� A mechanism that allows electricity that is produced from
indigenous RE resources to be sold to power utilities at a fixed
premium price and for specific duration.
� Provides a conducive and secured investment environment which
will make financial institutions to be comfortable in providing loan
with longer period (>15 years).
� Provides fixed revenue stream for installed system
� Only pays for electricity produced: promotes system owner to
install good quality and maintain the system
� With suitable degression rate, manufacturers and installers are
promoted to reduce prices while enhancing quality
13
Feed-in Tariff (FiT)
� There are 2 meters in
each home.
� One to record how much
renewable energy is
generated by solar PV
system
� Distribution licensee pays
all the renewable energy
exported to the grid.
� Another to record how
much electricity the
household consumes
Basic Concept of the Feed-in Tariff for Household
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8
Malaysia: Renewable Energy PoliciesCritical Factors for an Effective FiT Implementation
15
FiT must be guaranteed via the RE Act, whereby:
�Access to the grid is guaranteed – utilities legally obliged to accept all
electricity generated by RE private producers
�Local approval procedures are streamlined and clear
�FiT rates
� high enough to produce ROI + reasonable profit (not excessively)
to act as an incentive
� fixed for a period (typically 20 years) to give certainty & provide
businesses with clear investment environment
� adequate "degression" to promote cost reduction to achieve
“grid parity”
�Adequate fund is created to pay for the FiT rates & guarantee the
payment for the whole FiT contract period
�Implementation by a competent agency for constant monitoring,
progress reporting and transparency
How is the FiT funded?
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17
FiT Mechanism for Malaysia
Step 1: Electricity consumers pay
electricity bills to Distribution
Licensees (e.g.
Tenaga Nasional Berhad)
18
FiT Mechanism for Malaysia
Step 2: 1 % of electricity
revenue is channelled from
distribution licensees
to RE Fund which is managed
by SEDA Malaysia
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10
19
FiT Mechanism for Malaysia
Step 3: Distribution
Licensees make FiT
payment to FiAHs
20
FiT Mechanism for MalaysiaStep 4: Distribution Licensees claim from RE Fund, the positive sum of
the differential between FiT payments and the prevailing displaced cost,
including an administrative fee.
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1%
FiT Cost
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
Source of Fund for FiT
22
1%
FiT Financing in Germany
Gerhard Stryi-Hipp,
Head, Energy Policy,
Fraunhofer Institute
for Solar Energy
Systems
“Germany contributes 15% of their electricity bills
to finance the feed-in tariff. This amounts to €13
billion (2010) and half of this goes to solar PV”.
Germany decision to move to RE is as a result of
people’s choice.
• 70% of electricity is imported. Germany wants
to achieve energy autonomy.
• Chernobyl disaster. Germany wants to reduce
reliance on nuclear power.
• 15% of total electricity price for RE is a small
price for the Germans to pay
What about us? How much are we willing to pay?
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1%
Impact of the FiT in Germany
- Germany’s feed-in tariff was
implemented in 2000
- Created 400,000 green jobs
- In 2000, RE forms 6 % of Germany’s
energy mix and in 2011, RE forms
20 % of Germany’s energy mix.
Source: BMU
- By 2020, RE will account for 35% of Germany's energy output,
soaring to 80% by 2050.
- By end of 2011, Germany will have 22.5 GW of solar PV and 75
GW of wind power
Renewable Energy Act 2011
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Renewable Energy Act 2011
�RE Act: an Act to provide for the establishment and implementation of a
special tariff system to catalyse 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
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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
16/12/2011
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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)
FiT Design
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0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
RM
/kW
h
RE-FiT Rate vs Displaced Cost
Displaced Cost (LV)
Displaced Cost (MV)
FiT Biomas
FiT Biogas
FiT Mini Hydro
FiT Solid Waste
FiT Solar PV
Upon grid parity:
� FIAH will be paid prevailing DC rate.
� DL cannot claim from RE Fund (SEDA)
29
Grid Parity
Tarif Jualan
RM
/kW
h
Tahun
Displaced Cost
FiT Biomas
FiT Biogas
FiT Mini Hidro
FiT Solar PV
FiT Sisa Pepejal
Degression & Grid Parity (Projected)
FiT Degression: Promote cost reduction towards Grid Parity
� Degression rate to commence on 1st January every year
� Revision: at least once every 3 years30
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RE Law Schedule: Biogas
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RE Law Schedule: Biomass
32
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RE Law Schedule: Small Hydropower
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RE Law Schedule: Solar PV
34
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RE Law Schedule: Solar PV .. cont
35
Annual RE Quota
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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
2014 20 10 50 30 90 10 40 250
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Getting started
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To do list
1. Connection Confirmation Check (72 kW – 180 kW)
RM1000, 2 weeks.
2. Power System Study (> 180 kW)
Both to be conducted by the relevant Distribution Licensee.
Net Export Capacity or Rated kWp of RE
InstallationCost (RM)
Completion
Period
Up To 1 MW 20,000 30 Days
More Than 1 MW Up To 10 MW 40,000 30 Days
More Than 10 MW Up To 30 MW 60,000 42 Days
Additional For Insulation Coordination Studies If
Required20,000 10 Days
Additional for Solar PV - Dynamic Study (Voltage
Fluctuations) If Required10,000 -
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39
To do list
• Secure legal rights to the site of the RE installation / letter
of intent from the site owner
• Design RE installation (SLD, capacity, technical details, etc)
• Check relevant local authority and other governmental
requirements
• Contact potential financier & obtain financing offer
letters/term sheet
• Prepare work plan & major milestones
• Company info (e.g. certified true copies of audited
accounts, Forms 8, 24, 49, memorandum & articles of
association, board’s reso authorizing representative to
apply FiA on company’s behalf)
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Memorandum & Articles of Association
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41
Check out
FiT guidelines at http://seda.gov.my/go-
home.php?omaneg=000101000000010101010001000010000000
00000000000000&s=1221
View standardized REPPAs at http://seda.gov.my/go-
home.php?omaneg=000101000000010101010001000010000000
00000000000000&s=563
1. Biogas≤ 10MW
2. Biogas > 10MW to ≤ 30MW
3. Biomass≤ 10MW
4. Biomass > 10MW to ≤ 30MW
5. Small hydro≤ 10MW
6. Small hydro > 10MW to ≤ 30MW
7. Solar PV≤ 1MW
8. Solar PV > 1MW to ≤ 12MW
9. Solar PV > 12MW to ≤ 30MW
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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.
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SEDA’s Portal, www.seda.gov.my
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e-FiT Online System
• FiT quota approvals on ‘first come, first served basis’ – upon submission of
complete application & document
• FiT quota is dynamic44
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e-FiT Online System Tutorial
45
� 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).
46
Potential Impact of National RE Policy by Year
2020
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Malaysia: Renewable Energy Policies
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Penang – One of the best spots under the Sun!
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http://solar.ecosensa.com