Salam everyone, how are you doing so far? What about energy efficiency effort and tips that I have told you last month? Did it do any good to your monthly electricity bill? I hope that all of you can reap the benefits, lessen the use of energy at home and therefore save up your pocket money. Today, I would like to write about Feed-in Tariff (FiT) future in Malaysia. I know that some of you are still unclear about FiT and its contribution in making Malaysia a greener and much more energy efficient country.
Today, we can clearly see that Malaysia is all set to join other countries that pay for renewable energy-generated electricity that is fed into the national grid. However, the approach has always been cautious by the implementation of a quota system that controls how much the feed-in tariff scheme taken in every year. This is intended to avoid premature cuts in promised tariff rates and making the public furious about it.
SEDA Malaysia is a statutory body formed under the Sustainable Energy Development Authority Act 2011 [Act 726] and functioned to administer and manage the implementation of the feed-in tariff mechanism which is mandated under the Renewable Energy Act 2011 [Act 725]. SEDA Malaysia’s roles are clearly stated in the SEDA Act 2011, and are also responsible to spearhead the development of RE industry in Malaysia. SEDA Malaysia is the implementer of Feed-in Tariff program for development of renewable energy in Malaysia.
It raises a question of whether Malaysia’s feed-in tariff mechanism is designed well enough to fully unlock the potential of renewable energy abundance in the country. For your information, Malaysia’s Feed-in Tariff system requires the Distribution Licensees (DLs) such as Tenaga Nasional Berhad and NUR Distribution Sdn. Bhd. (NUR) with this year’s addition of Sabah Electricity Sdn. Bhd (SESB) to buy from renewable energy producers the electricity produced by them. FiT rates are set by SEDA Malaysia with approval from KeTTHA to pay for the renewable energy supplied to the electricity grid for a specific duration.
By having access to the grid and setting a favourable price per unit of renewable energy, the FiT mechanism also ensures that renewable energy becomes a viable and sound long-term investment for companies, industries and individuals. This can happen very easily if consumers are registered under SEDA Malaysia as one of the producers of renewable energy through solar panels, small hydro power, biomass and biogas at their homes or private lands.
The Cabinet has also agreed for the surcharge on consumers’ electricity bills that has been gazetted and collected from consumers. 1% surcharge is needed to achieve the target capacity of renewable energy in the long run. As of 2013, 1% surcharge was imposed on all electricity customers and domestic electricity consumers are obliged to contribute to the surcharge only if their monthly electricity consumption exceeds 300 kWh or RM 77 a month.
This money is channelled into the Renewable Energy Fund and administered by SEDA Malaysia to pay the premium Feed-in Tariff rate to those producers who generate electricity from renewable resources at homes or in industrial companies. However, as of January 2014, this surcharge increases by 0.6% to be 1.6 % for current electricity users. This increase will also affect the consumers in Sabah and Wilayah Persekutuan Labuan as they are charged with 1.6% of their electricity bills for the first time. Please refer to www.seda.gov.my for more news and information about this tariff.
Renewable energy and energy efficiency effort promoted by SEDA Malaysia and the Ministry of Energy, Green Technology and Water (KeTTHA) aims to create a host of spin-off benefits including:
-Savings of RM 2.1 billion in external costs to mitigate carbon dioxide emissions
-At least RM 19 billion in loan values for renewable energy projects
-RM 70 billion revenue from renewable energy power
-RM 1.75 billion in tax income to the government and
-52,000 jobs to construct, operate and maintain renewable energy power plants.
(Source: Green Purchasing Asia, June 2011).
Apart from that, producers like you can generate your own income by installing solar panels at homes or office buildings. Corporate sectors can set up small hydro powers, biomass and biogas plants at their land to sell the energy produced to Distribution Licensees and gain money. Companies out there are also gaining benefits such as power producers, solar photovoltaic cells manufacturers, distributors and installers, palm oil plantations set up to make money from empty fruit branches, logistic providers, bankers and insurers, training institutions and trainees, consultants and even higher institutions that conduct research and development effort.
There will always be a bright future for renewable energy and energy efficiency effort in Malaysia, along with improvements and better ways to accommodate both users and providers out there. What is needed right now is for us to take that small but consistent step in making this happen. That is all for today and I will see you in my next blog post, take care and God bless!