Renewable Energy Bill 2010 – Part 2: What Are The Concerns?

The Parliament sitting on March 7th 2011 tabled the Renewable Energy Bill 2010, and the Sustainable Energy Development Authority Bill 2010 for the second reading. Do you know what these bills mean to you?

Green Ink - LoyarBuroks Environmental Rights Column

Green Ink - LoyarBurok's Environmental Rights Column

Part 1 of this article briefly summarizes what the Renewable Energy Bill 2010 means to an ordinary Malaysian. In summary, what the RE Bill 2010 means to us is, if you are in Peninsular Malaysia and have a solar photovoltaic generator at home, you can apply to connect this generator to the grid, and get paid for selling the electricity to TNB for up to 21 years. For you, it could means you pay less for your monthly electricity bill, or you could even generate secondary income if you generate more electricity than you consume.

The payment to you will be expensed from the Renewable Energy Fund, until the cost of buying electricity from you is lower than the cost of TNB buying electricity from its traditional sources.

Many feedbacks and concerns were voiced online, as well as through our discussions and interviews with industry players and the general public. Most concerns generally can be grouped into the following:

  1. As the focal point to assist the Minister on climate change matters relating to energy, SEDA plays one of the most important roles in the development of Renewable Energy in Malaysia. The question is, do we have someone knowledgeable and capable enough in the Renewable Energy and Climate Change field to sit in SEDA? On what basis and criteria does the Minister appoint the board of SEDA? And also, to avoid conflict of interest, no one in SEDA should be from utility companies (TNB, SESCO, SESB).
  2. If the real intention of the RE Bill is to reduce carbon emissions, is there a target by which the implementation of FiT will reduce the number of coal-fired or fossil fuel-powered plants? This is exceptionally important as we might see the number of fossil fuel-powered plants increase concurrently with the increase of Renewable Energy Plants. If this happens, we are mainly increasing the energy consumption of the nation, and thus will have no effect in controlling carbon emissions.
  3. How does the RE Bill promote efficient energy use among consumers, and ultimately reducing the total energy demand of the country? The last thing we want is for the government to continue giving incentives to promote renewable energy, when there is no need for such high energy demand in the first place.
  4. The main contributor of the RE Fund will be from a potential electricity tariff increase of 1% (pending review). So essentially, it is the consumers, us, who will pay into the RE Fund. While this is ultimately a good move to create awareness among consumers to reduce electricity consumption, my question is, if consumers are the ones who contribute mainly to the fund, what is the financial contribution from the federal government, and also utility companies to this program?
  5. The capacity of RE eligible to be connected to the grid will be capped annually based on the availability of RE Fund. So if the annual capacity is capped at 200 MW, large corporations could just invest in seven Renewable Energy generators of 30MW each, and the fund would be fully taken up. If this happens, what incentive would consumers at large receive, and how do we want to promote the use of Renewable Energy among consumers?
  6. TNB’s profit in 2010 was RM1.5 billion; if 5% of this can go to the fund, how much more Renewable Energy capacity can we connect into the grid? Is it worthwhile for the government to impose such a regulation?

RE and SEDA

Feed-in Tariff: How it works | Source : Industrial Briefing on Feed-in Tariff Procedures, KeTTHA

There were several rounds of briefings to industry players on RE Bill in 2010, but it seems that there are still many questions left unanswered. And if KeTTHA is considering a roadshow to explain to the public the developments of the nuclear leak in Japan, I think it’d be more worthwhile to have public roadshows to clarify and seek more feedback on the Renewable Energy Bill 2010.

Chow Pong sells black in the day and turns green at night; “I fade in and out of existence; and I walk both worlds, to deliver the message in completeness.”


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I walk in and out of both world to deliver the most complete message.

Posted on 17 March 2011. You can follow any responses to this entry through the RSS 2.0.

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7 Responses to Renewable Energy Bill 2010 – Part 2: What Are The Concerns?

  1. The main contributor of the RE Fund will be from a potential electricity tariff increase of 1% (pending review). So essentially, it is the consumers, us, who will pay into the RE Fund.

  2. G. Lalchand

    Dear EnergyWise (part 2)

    Following on from the earlier part 1, here's the remainder:-

    Personally, I seee no reason why electricity customers must pay a tariff levy to let the PVPP developers to make profits. If fthey cannot make profits at the rates set out in the ETP Book, then they should wait until such developments become profitable around 2017. We must remember that the FiT rates must be paid for a period of 21 years, so it is immoral to burden electricity customers to help the few PV IPPs to make indecent profits from unjustifiable FiT rates.

    I hope this gives a fair perspective on the subject of FiT rates especially for PVPPs.

  3. G. Lalchand

    Dear EnergyWise, (part 1)

    I only came across this blog recently, so I must apologise for the delayed response to your comment on the large (30 MW) RE power plants, especially for PV (i.e. PVPPs). I believe that the RE Act did not envisage large PV power plants but apparently considered PV installations to be limited initially to only a maximum of 1 MW capacity for each installation per annum.

    The large PV PPs were proposed in the EPP-10 of the PEMANDU led ETP in June-July 2010 (NKEA Labs), well after the RE Bill processing for legislation commenced (EPP-10 is part of the "Oil, Gas and Energy Lab" component in Chapter 6 of the ETP Book). However, the EPP-10 did not make any provision for FiT payments for such large PVPPs. They were deemed to be viable only post 2015 (more realistically 2017/18) when the expected cost of electricity generation from the PVPPs was estimated to be lesss than RM 0.30 per kWh, and about equal to the cost from conventoinal power plants.

    Cheers,

    Lal.

  4. BeammeupScottie,

    The basic differences between Malaysian proposed FiT as compared

    to the European/German/UK FiT are that:

    i. we do not have an efficiency criteria for electricity power

    generation to qualify for FiT or Grid Connection whereas

    their governments impose a minimum efficiency through a

    concept of CHP quality which is high,

    ii. we allow up to 30,000 kW per installation for Solar PV

    energy to qualify for FiT whereas in the UK the maximum

    power capacity allowed per installation is 50 kW,

    iii. we allow up to 30,000 kW capacity per installation for

    small Hydro power to qualify for FiT whereas in EU small

    hydro is not considered for FiT and in Thailand the maximum

    power capacity allowed per installation for FiT is 200 kW.

    For an appreciation of the current provisions of the Renewable Energy Bill 2010 please see: http://www.rank.com.my/energywise

  5. We must first honestly study the abundant renewable energy availabe in view of our favourable geographical location. Hydro, Biomass and Solar potentials and their intricacies need to be understood so that they are optimally exploited. Let alone energy usage inefficiency, power generation inefficiency in our country is another serious matter that need to be recognised and rectified. A Renewable Energy Act should aim to achieve these ends. For an appreciation of the current provisions of the Renewable Energy Bill 2010 please see: http://www.rank.com.my/energywise

  6. BeammeupScottie

    How does this Malaysian FiT, compared to the European or German FiT? Don't the European governments and utility companies also contribute to an EU SEDA-equivalent Fund?

  7. Han

    Sir,

    If i put up some solar panels in my house that generates electricity in watts (DC),…. while TNB sells electricity to me in kilowatts (Kw, AC) i would probably see very little difference in my electricity bill unless the bill buys the watts i get from my solar panels are equivalent in price to that of what TNB sells me electricity in kW.

    Does the bill say how much will they buy back the electricity i generate from these solar panels?

    in regards,

    han