RM325mil boost for renewable energy fund

PETALING JAYA: The Sustainable Energy Development Authority Malaysia (Seda) will get an additional RM325mil per annum to its renewable energy (RE) fund, following the revised surcharge of 1.6% effective this year from 1% previously.

Seda’s RE fund was created to support the feed-in-tariff (FIT) scheme that was introduced in December 2011 to encourage the supply of RE into the country’s electricity grid.

To recap, last December, the Government revised the surcharge on electricity bills for the RE fund from 1% to 1.6% for Peninsular Malaysia, effective Jan 1, following the review in electricity tariffs.

Sabah consumers, for the first time, will be imposed a surcharge of 1.6% in their electricity bills. (Customers consuming less than 300 kWh of electricity are exempt from contributing to the RE fund.)

Chief executive officer Datin Badriyah Abdul Malek (pic) said the 1% surcharge had given Seda around RM300mil a year. But with the new 1.6% surcharge, Seda should be getting RM625mil per annum from both TNB and Sabah Electricity Sdn Bhd (SESB), an additional RM325mil per annum.

The initial RM300mil fund size has been committed to feed-in approval holders (FiAHs) for the next 21 years.

According to Badriyah, with the additional funds coming in, more RE is expected to be able to connect to the grid.

Badriyah said Seda was in the midst of rationalising its RE quota.

“Although the 1.6% surcharge has been announced, there are key parameters influencing the projection of the RE quota which require confirmation from the Energy, Green Technology and Water Ministry.

“The key parameters include the prevailing displaced cost and the degression rates in the schedule of the RE Act 2011,” Badriyah said, adding that Seda should be able to reveal the new RE quota available within the first quarter of this year.

Displaced cost refers to the average cost of generating and supplying one kWh of electricity from resources other than renewable resources (such as fossil fuels) through the supply line up to the point of interconnection with the RE installation.

Under the RE Act 2011, individuals or non-individuals can sell electricity generated from RE resources to power utility firms like TNB at a fixed premium price for a specified time.

The four RE resources that are eligible for FiT are biogas, biomass, small hydropower and solar photovoltaic.

So far, the total RE fund disbursed to distribution licensees (including administration fee) amounted to RM74.5mil for 1,427 FiAHs.

As at Dec 31, 2013, the total number of approved feed-in-tariff applications is 2,760 and the total approved RE capacity expected to be connected to the grid by June 2015 is 536MW.

Badriyah said Seda had received some RM536.6mil so far from the 1% surcharge collected from TNB, since the tariffs were first introduced in December 2011.

The statutory body received an initial grant of RM300mil and has disbursed some RM70mil to FiAHs.

On top of the 1.6% surcharge, Seda is also looking at other ways of sourcing money for the RE fund.

“Seda is working out a proposal on the other sources of fund to support the 20,000 residential solar rooftop programme. However, this is in the infancy stage and more details will follow once the proposal is approved by the ministry,” Badriyah said.

She said comparatively the Small Renewable Energy Power Programme (SREP), which spanned over a decade, only achieved a total of 61.2MW of RE capacity connected to the grid.

“Within a period of two years, as at the end of December 2013, under the FiT, 148MW of RE capacity has achieved commercial operation and that translates to a total of 1,427 approved FiT applicants.”

Meanwhile, Seda has also considered the inclusion of wind as another renewable resource in the RE scheme. A wind map study has started at the end of 2012 and will take about 24 months to be completed.

“The wind map study will only be completed at the end of 2014 and will be publicly available in the first quarter of 2015. Seda will consider the inclusion of wind as another RE source under the FiT when the due diligence is completed and this new source is approved by the ministry,” Badriyah said.