Solar PV: Policy, Market & Industry in Malaysia

Dr Wei-nee ChenChief Corporate Officer,

Sustainable Energy Development Authority (SEDA) MalaysiaOctober 2017

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Malaysia: Electricity Generation Mix

Source: 11th Malaysia Plan (2015)

Population (2017) : 32m

GDP per capita (2016) : US$9502

Area : 329,847 km²

Electricity generation capacity (2017): 30 GW

RE Development in Malaysia

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8TH Malaysia Plan (2001 -

2005)

• RE introduced as the 5th Fuel

• Implied 5% RE in energy mix

9th Malaysia Plan

(2006 – 2010)

• Targeted RE : 300 MW – Peninsular Malaysia; 50 MW - Sabah

• Connected to the utility grid: 61.2MW (17% from 9th MP target through Small Renewable Energy Programme (SREP)

• Cabinet approved National RE Policy & Action Plan (October 2010)

10th Malaysia Plan (2011-

2015)

• Enactment of RE Act 2011 & SEDA Act 2011 (27 & 28 April 2011)

• Establishment of SEDA, implemented Feed-in Tariff

• 2015: Energy mix 43% coal, 40% gas, 14% large hydro, 2% RE, 1% oil

11th Malaysia Plan (2016-2020)

• Target energy mix of 53% coal, 29% gas, 15% large hydro, 3% RE.

• Target RE (FiT) capacity of 2,080 MW

• Introduce Net Energy Metering (NEM)

Green Technology Master Plan: RE Target 30% by 2030,Minister’s Aspirational RE Target: 50% by 2050

BACKGROUND – SEDA MALAYSIA

• Statutory body formed under the Sustainable EnergyDevelopment Authority Act 2011 [Act 726], reporting to theMinistry of Energy, Green Technology & Water (KeTTHA).

• Established since 1st September 2011.

• Formed to fulfil a gap which holds an agency accountable forthe growth of RE in the country (NREPAP, 2010).

• The scope of SEDA Malaysia is not limited to RE; SEDAMalaysia also involves with the implementation of energyefficiency and conservation program that has beenmandated by the government and industry driven initiatives.

• To conclude, SEDA Malaysia responsible for the growth ofSustainable Energy agenda in Malaysia.

Renewable Energy (RE) Potential

Mini-hydro : 490 MW Biomass : 1,340 MWBiogas : 410 MW Municipal waste : 360 MWGeothermal: 60 MW Total : 2,660 MW

Solar : Unlimited Sarawak Hydro : 20,000 MWWind : Low wind speed

RE Technical Potential in Malaysia

(Source: KeTTHA, SEDA, ST)

• Capital subsidy under UNDP-GEF Malaysia Building Integrated PV (MBIPV) Project (2006-2010) (quota 1 MW);

• Feed-in Tariff (FiT) implemented by SEDA since 1st

November 2011;

• Net Energy Metering (NEM) implemented by SEDA & regulated by the Energy Commission since 1st

November 2016 (quota 500 MW);

• Large Scale Solar (LSS) implemented by Energy Commission since 2016 (quota 1,000 MW)

PV Schemes in Malaysia

FiT Rate for Solar PV (2017) [US$1 = RM4,21]

Scheme CategoryApproved Commercial Operation

No. of Applications

Capacity (MW)

No. of Applications

Capacity (MW)

FiT Sub-total 11.803 438,76 8.234 341

Individual 10.688 98,38 7.516 69,52Community 428 10,29 235 4,85Non-Individual 687 330,09 483 266,62

NEM Sub-total 101 3,31 101 3,31Residential 72 0,42 72 0,42Commercial 22 1,12 22 1,12Industrial 7 1,77 7 1,77

LSS Sub-total 19 450,90Up to 5 MW 5 21,40Up to 30 MW 7 120,5Up to 50 MW 7 309

Total 11.923 892,97 8.335 344,31

Grid-Connected Solar PV Market Status (Aug 2017)

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FiT implementation Outcome (up to 2019)

Large Scale Solar Bid Price (Aug 2017)

Source: http://st.gov.my

Category

Peninsular Malaysia Sabah

Total Submissio

ns

No of Submissions

/MW

Lowest Bid Price RM/kWh

Highest Bid Price

RM/kWh

No of Submission

s /MW

Lowest Bid

Price RM/ kWh

Highest Bid Price

RM/

kWh

P1 (1-5.99 MWac)

25 (72,3MW) 0,375 0,4719

(78,8MW)0,371 0,53 44

P2 (6-9.99 MWac)

18(171,9MW)

0,37 0,4612

(111MW)0,39 0,49 30

P3 (10-30 MWac)

42 (1.198MW)

0,3398 0,5 na na na 42

Total85

(1442,2MW)31

(189,8MW)116

(1632MW)

Available Quota: 360MWac (x 4) in Peninsular Malaysia and 100MWac (x 2) in Sabah (commercial operational by 2019-2020);

Exchange rate: US$1 = RM4,21

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Current Issues & Challenges

1. Solar PV regarded as intermittent and unreliable source of energy;

2. Energy storage solutions are still costly;3. Electricity tariff still being subsidized for natural gas – low

displaced cost and selling of NEM excess solar electricity to grid is disincentivized;

4. Cost of externalities by fossil fuel not internalized in electricity tariff (no carbon tax);

5. Electricity market is highly regulated with single-buyer structure (energy trading among prosumers not possible);

6. Paradigm shift from baseload electricity market to energy balancing/flexibility market very challenging; and

7. Urgency of climate agenda needs to be strongly institutionalized in energy policy.

1 MW Agriculture, TTL Energy Sdn Bhd, Sabah

5 MW, SunEdison Inc., Selangor

Solar PV Industry (end of 2016)

Manufacturers (Silicon feedstock /ingots)

Process & technology

Nameplate Capacity

Elpion Si Metal Si 33,4 tonnes

Tokuyama 1 Poly-Si 20 tonnes

COMTEC 2 mc-Si ingots 124 MW

[1]Sold to South Korea’s OCI Co Ltd in 2017 [2] In early 2017, LONGI agreed to buy over COMTEC Malaysia.

• In 2016, export and local sourcing activities undertaken by the top solar companies in Malaysia was valued at US$2,5 billion and US$320 million respectively.

• Over 80% of the PV products were exported to Europe, US and Asia. • Malaysia has also completed a Solar PV Roadmap 2030 which will be

launched in October 2017 to drive the country’s solar PV industry forward

Cell/Module manufacturer TechnologyProduction capacity (MW/yr)

Cell ModuleWafer-based PV manufactures

1. Sunpower mono-Si 6852 Hanwha Q-Cells mc-Si 260 1 3193 TS Solartech Mono & mc-Si 5004. Jinko Solar mc-Si 1 300 4505. JA Solar mc-Si 5006. Flextronics c-Si 1 1007. Panasonic HiT mono-Si 4258. MSR Mono & mc-Si 859. Solartif mc-Si 1010. PV HiTech mc-Si 511. Promelight Mono & mc-Si 150Sub-Total 3 245 3 544

Thin film manufacturers1 First Solar CdTe 2 4002 Nanopac 12Sub-Total 2 412TOTALS 3 245 5 956

[1] SunPower took over its joint venture (JV) solar cell manufacturing operations in Malaysia from Taiwan-based partner AUO, a subsidiary of AU OptronicsCorporation at a cost of US$170 million in 2016

4th International Sustainable Energy Summit (ISES) 2018

“Sustainable Energy: The Future is Here”

Pullman Hotel, Kuching, Sarawak, Malaysia

10 – 11th April 2018

www.ises.gov.my

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Endorsed by

Co-Hosts

Ministry of Energy, Green Technology & Water

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Thank you

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

Email: fit@seda.gov.myWeb: www.seda.gov.my

Likas Square Commercial CentreUnit 32, Level 1 , LorongLikas Square, Jalan Istiadat Likas,88400 Kota Kinabalu, Sabah