Dr Pola Singh
Member of Sustainable Energy Development Authority (SEDA) Malaysia polasingh@gmail.com
Trust Fund from IPPs contribution: 1% of pretax profit for rural electrification, RE & EE projects.
Launched in 2001 - Very Slow Progress Allowed small RE producers (up to 10 MW) to sell electricity to the utility on a (un)willing buyer willing seller basis for a 21-year period at a predetermined (low) price After 11 years, the RE capacity was only 68.45 MW
Significant transaction costs to conclude RE Power Purchase Agreement cost of grid connection borne by RE developer
not able to compete with electricity produced by highly subsidized fossil fuels Business as usual approach - not sustainable nor appropriate to develop the RE sector Lack of institutional framework No regulatory framework was in place Utility company not obliged to purchase RE No RE Fund
Renewable Energy Act Sustainable Energy Development Authority Act (Creation of a dedicated agency in charge of development and promotion of RE)
RE Fund
Enabling Environment /Critical Factors that gave RE the much needed breakthrough (Feed-in Tariff)
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 21 years) to give certainty & provide businesses with clear investment environment Projects were bankable
Enabling Environment /Critical Factors that gave RE the much needed breakthrough (Feed-in Tariff)(continued)
Adequate funding - to pay for the FiT rates & guarantee the payment for the whole FiT contract period Funding Support RE Fund created 1% levy on consumers (those who use more than 300kWh per month) Implementation by a dedicated agency (SEDA Malaysia) In short the Policy, Regulatory, Institutional and Financial Frameworks have been put in place
Source of Fund for FiT The size of RE fund will determine the RE target for Malaysia Benefits 1% Polluters pay concept Will not affect 75% of electricity consumers ( 300 kWh/mth) Encourages Energy Efficiency and Demand Side Management Efforts
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Constrained by size of RE Fund Not a level playing field for different sources of RE
From start to fully operational status longer time for hydro Availability of ready supply of feedstock Biomass (if they dont own plantations)
Need to fine-tune the Quota Issues with Commercial Operation Date (bringing it forward)
Thank you
pola1721.seda@gmail.com
Web: www.seda.gov.my