PUTRAJAYA: Sustainable Energy Development Authority (Seda) has received the approval for an additional 1% levy to the renewable energy (RE) fund on top of the current 1% in electricity bills that will double up the fund size.
“We've already received the 2% approval but it remains in the Government hands to increase the 1%. I can't tell either when will it happen,” CEO Badriyah Abdul Malek said after Malakoff Corp Bhd's 4th Energy Expert Series yesterday.
Badriyah: ‘Tariff is a very much political thing.’
Currently, consumers in Peninsular Malaysia who use more than 300kWh a month are paying 1% levy, called feed-in-tarriff (FiT), to independent RE power producers. When implemented, the same group of consumers will have to pay 2% for FiT.
“Tariff is a very much political thing in Malaysia. The Government will have to decided when the tariff will be increased. We were supposed to get a tariff revision every six months but there was no such announcement last December and the next revision will be in June. And with the imminent general election we don't think it will be (revised),” Badriyah said.
The current 1% levy to cover costs associated with the FiT scheme translates to about RM300mil per annum. To kick-start the FiT, Seda had been given a grant of RM189mil.
Earlier, chief operating officer Ali Askar Sher Mohamad proposed independent power producers and utility companies to contribute a small portion of their profits to the RE fund.
He said Seda was expecting the first payment from Tenaga Nasional Bhd for the fund, latest by April 1.
Degression rate where FiT rates decrease annually for each renewable energy resource, with the exception of small hydropower installations, is set to kick in next year.
Badriyah said Seda was prepared to raise the degression rate if the study showed it was higher than the initial annual degression rate of 8%.
Ali Askar said the degression rate, however, would not affect current players as it would only be applicable for new applications.
As at Feb 29, Seda has approved 377 applications for RE with installed capacity of 311.56MW. Of the amount, 140.03MW installed capacity was from solar photovoltaic (PV).
Solar PV has received tremendous applications but biogas and biomass have not been as popular. Ali Askar said there were lots of interest in biomass but no one had really submitted a concrete proposal. “There's a great interest in landfill has but no takers for palm oil mill effluent (POME) due to small capacity and grid connection issues,” he said, adding that hydro projects were also facing some challenges as there were delays in getting state approval.
Badriyah said currently there were about 430MW private palm millers which were off-grid. She said Seda had been engaging with millers and the relevant body for palm industry to encourage them to get into FiT.
“They (palm millers) are not interested. They are just happy with the high crude palm oil prices and that connecting to the grid will probably give them a big headache,” she said.
Meanwhile, Badriyah said the FiT in Sabah has been suspended except for Small Renewable Energy Power Programme projects which reached commercial operation date by Dec 31, 2011.
She said currently only consumers in Peninsular was contributing a 1% to the RE fund.