Renewable Energy Bill & Subsidiary Legislations

Ir. Ahmad Hadri Haris

hadri(a)mbipv.net.my

Chief Technical Advisor RE/MBIPV National Project Team Ministry of Energy, Green Technology & Water 21st April 2011

Context: National Renewable Energy Policy

Approved by Cabinet on 2nd April 2010
Policy Statement: Enhancing the utilisation of indigenous renewable energy resources to contribute towards national electricity supply security and sustainable socio-economic development. Strategic Thrusts (RE Action Plans): 1. Introduce appropriate regulatory framework. 2. Provide conducive environments for RE businesses. 3. Intensify human capital development. 4. Enhance RE research and development. 5. Design and implement an RE advocacy programme.
HH/200411

- RE Bill RE Bill: an Act to provide for the establishment and implementation of a special tariff system to catalyse the generation of renewable energy and to provide for related matters.
HH/200411

Part I: Preliminary Part II: FiT System Part III: Connection, Purchase and Distribution of RE Part IV: Feed-in Tariff Part V: Renewable Energy Fund Part VI: Information Gathering Powers Part VII: Enforcement Part VIII: General Part IX: Savings and Transitional
3

Initial Subsidiary Legislations (SS) under RE Act

SS1 SS2 SS3 SS4 SS5 SS7 FIAH eligibility criteria and conditions Technical and operational requirements RE sources criteria Allocation to RE Fund (from TNB tariff) FiT rates criteria and eligibility Recovery of moneys (by DL) Displaced cost (LV, MV) Administration fees (to DL and SEDA) REPPAs: Biogas 12MW Biogas > 12MW to 30MW Biomass 12MW Biomass > 12MW to 30MW Small hydro 12MW Small hydro > 12MW to 30MW Solar PV 1MW Solar PV > 1MW to 30MW
4

SS8

HH/200411

RE Bill - Part I: Key Interpretation

renewable energy means electricity generated or produced from renewable resources. renewable resources means the recurring and non-depleting indigenous resources or technology as set out in the first column of the Schedule of the RE Bill; renewable energy installation means an installation which generates renewable energy and includes any technical facility of that installation which converts mechanical, chemical, thermal or electromagnetic energy directly into electricity;

feed-in approval holder means a person who holds a feed-in approval;

distribution licensee means the holder of a license to distribute issued by the Commission under section 9 of the Electricity Supply Act 1990; Authority means the Sustainable Energy Development Authority of Malaysia established under the Sustainable Energy Development Authority Act 2010; displaced cost means the average cost of generating and supplying one kilowatt hour of electricity from resources other than the renewable resources through the supply line up to the point of interconnection with the renewable energy installation;

grid parity means, in relation to a particular renewable energy installation, the time at which the feed-in tariff rate applicable to that renewable energy installation is equal to or cheaper than the displaced cost.
5

HH/200411

Critical Factors for Effective FiT Mechanism

Must be guaranteed via the RE Act, whereby:
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.
S12, S13, S14

Part II, S15 S16, Schedule S16, Schedule S17, S18, Schedule S23, S24, S25, S19

FiT rates must be high enough to produce a ROI plus reasonable profit (not excessively) to act as an incentive.
FiT rates will be fixed for a period (typically 20 years) to give certainty and provide businesses with clear investment environment. Adequate "degression" for the FiT rates to promote cost reduction to achieve grid parity Adequate fund is created to pay for the FiT rates (incremental cost) and guarantee the payment for the whole FiT contract period. The design of the FiT must be customized to suit contextual conditions of the country. Implementation by a competent body in a professional manner that includes constant monitoring, progress reporting and transparency.
HH/200411

REA

SEDA, S28, S56

6

Part II S.3: Feed-in Tariff System

Establishment of FiT System

Biomass Biogas

Small Hydro

Solar PV

Feed-in Tariff (FiT) system provides: Connection to supply line by RE installations Priority of purchase and distribution by DL Payment by DL to FIAH according to FiT rates

HH/200411

FiT Application Steps (SEDA) RE & 72kW Solar

Step 1 Interest party check/comply with (check at www.seda.gov.my): SS1: FIAH Eligibility SS3: RE sources criteria SS5: FiT rates criteria and eligibility SEDA: RE quota (application based on SCOD) Step 3 Step 4 Secure sites/intent from site owner Design RE system (technical specs/details & performance, fuel requirements) - SEDA to prescribe competency (human) and quality (equipment) requirements Contact DL & conduct Power System Study (PSS) Check statutory/authority requirements Contact financier & obtain financing offer letter(s) Prepare work plan & milestones

Step 2

Apply for FiT (SEDA to prescribe method online) Pay FiT application fee (SEDA to prescribe method RM1/kW for >72kW)

Step 5

Sign REPPA (SEDA to prescribe time period 2 to 8 weeks) - Register signed REPPA with SEDA key milestone - Apply RE connection to DL (SEDA to prescribe time period)
8

HH/200411

FiT Application Steps (SEDA) RE & 72kW Solar

Step 6 Step 7 Step 8 Step 8 Submit ST license form directly to ST - ST issue provisional license key milestone FIAH issue notice to proceed to EPC Payment to EPC key milestone Complete/satisfy authority requirements, site access/ownership, fuels Submit ST license form directly to ST - ST issue license

Sign financing agreement key milestone

Step 9 Step 10

Meter installation (SS2: T&O) key milestone IOD (SS2: T&O) key milestone - Acceptance test (SEDA to prescribe/REPPA) - Reliability run (SEDA to prescribe/REPPA) - Verification report by IE (SEDA to prescribe IE requirement) COD (SS2: T&O) key milestone - Commissioning - Start of FiT duration 1st FiT payment within 30 days after meter reading

Step 11

HH/200411

Schedule: Biogas

HH/200411

10

Schedule: Biomass

HH/200411

11

Schedule: Small Hydropower

HH/200411

12

Schedule: Renewable Resources, FiT Rates

Schedule: Solar PV

HH/200411

13

RE Half-Year Quota for FiT Application: 30MW www.seda.gov.my

Year

Biogas

BiogasSewage/ Landfill

Biomass

BiomassSolid Waste

Small Hydro

Solar PV 1MW Domestic

Solar PV 1MW Non-Domestic

Solar PP >1MW

2011 H2 2012 H1

10 10 10 10 10

5 5 5 5 5

70 30 30 35 35

10 10 10 15 15

30 30 30 40 40

4.5 2.25 2.25 3.25 3.25

4.5 2.25 2.25 3.25 3.25

20 17.5 17.5 25 25

2012 H2
2013 H1 2013 H2

HH/200411

14

Annual RE Capacity Target (Quota, MW/Year) - 30MW

[RE Policy + ETP-EPP10]
Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 HH/200411 Biogas 10 20 20 25 25 25 30 30 30 25 25 25 20 20 20 20 20 20

BiogasSewage 5 10 10 10 10 10 10 10 10 10 4 3

Biomass 70 60 70 60 70 80 90 100 100 100 90 90 80 70 60 50 50 50

BiomassWaste 10 20 30 40 50 35 30 20 20 10 6 5

Small Hydro 30 60 80 60 60 60 50 40 30 20

Solar PV 1MW 9 11 13 15 17 19 21 24 28 33 37 41 47 60 80 105 135 175 220 280

Solar PP >1MW 20 35 50 80 110 130 145 155 165 170 30 80 130 250 250 250 250 250 250 300

Quota MW/Year 154 216 273 290 342 359 376 379 383 368 188 241 281 403 410 425 455 495 470 580

Cum. MW 154 370 643 933 1,275 1,634 2,010 2,389 2,772 3,140 3,328 3,569 3,850 4,253 4,663 5,088 5,543 6,038 6,508 7,088 15

Opportunity for Households

Year Unit 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
HH/200411

Annual Solar Quota <1MW MW 9 11 13 15 17 19 21 24 28 33 37 41 47 60 80

Annual Solar Quota for Residential MW 4.5 5.5 6.5 7.5 8.5 9.5 10.5 12.0 14.0 16.5 18.5 20.5 23.5 30.0 40.0

No. of Homes per Annum (eg 5kW/home) Unit of Homes 900 1,100 1,300 1,500 1,700 1,900 2,100 2,400 2,800 3,300 3,700 4,100 4,700 6,000 8,000

Cumulative No. of Homes Unit of Homes 900 2,000 3,300 4,800 6,500 8,400 10,500 12,900 15,700 19,000 22,700 26,800 31,500 37,500 45,500
16

Part II S.4 & SS1: FiT Eligibility

Application to SEDA RE 30MW Subsidiary Legislation 1: Renewable Energy (Feed-In Approval) Rules 2011 1) Individuals ( 21 years)
Malaysians Foreign individuals: limited to solar 72 kWp Direct ownership

2) Companies (ROC)
All legally registered companies and businesses Direct ownership Shareholding limitations: 1) DL: 49% within its distribution area 2) Foreign companies: 49%

3) Other entities
HH/200411

17

SS1: Renewable Energy (Feed-In Approval) Rules 2011

Eligibility of other entities 5. The following other persons shall be eligible to apply for a feed-in approval: a) local authority as defined in the Local Government Act 1976 [Act 171]; b) a body corporate constituted or established under any written law, including a Joint Management Body established under section 4 of the Building and Common Property (Maintenance and Management) Act 2007 [Act 663], but excluding the Authority; c) a registered society as defined in the Societies Act 1966 [Act 335]; d) a co-operative society as defined in the Co-operative Societies Act 1993 [Act 502]; e) a firm as defined in section 6 of the Partnership Act 1961 [Act 135]; and f) such other persons or classes of persons as may be decided by the Authority from time to time.

18

SS1: Renewable Energy (Feed-In Approval) Rules 2011

Application for feed-in approval Grant of feed-in approval Duration of feed-in approval Change in particulars of feed-in approval holder Replacement of feed-in approval Application to assign or transfer feed-in approval Standard conditions of feed-in approvals Application fees Extension of time Giving false or misleading information or document: Fine RM300K / 3 years jail

19

SS3: Renewable Energy (Criteria For Renewable Resources) Regulations 2011

Biogas a gas produced by the anaerobic digestion or fermentation of indigenous organic matter under anaerobic conditions including but not limited to manure, sewage sludge, municipal solid waste and biodegradable waste originating from non-fossilised and biodegradable organic material originating from indigenous plants, animals and microorganisms including but not limited to products, byproducts, residues and waste from agriculture, industrial and municipal wastes originating from

Biomass

Small hydropower
Solar photovoltaic
HH/200411

the production of electricity by harnessing the power of flowing water

a technology involving the direct conversion of sunlight energy into electrical energy via a photoelectric process
20

SS5: Renewable Energy (Eligibility Criteria for Feed-in Tariff Rate) Rules 2011
Selected interpretation:

buildings means roofed building structures which can be independently used and entered into by human beings and are primarily designed for the purpose of protecting human beings, animals or objects;
use as building material means, in relation to a renewable energy installation utilising solar photovoltaic technology as its renewable resource, the use of the relevant component of the installation serving the function of a principal building material with no secondary building material beneath such component serving the same function. qualified engineer means a Professional Engineer or an Engineering consultancy practice, as the case may be, possessing such other qualifications as may be determined by the Authority from time to time pursuant to administrative guidelines; testing and commissioning report means a report from a qualified engineer setting out the outcome of the testing and commissioning of a renewable energy installation, in such form as may be determined by the Authority from time to time pursuant to administrative guidelines;
HH/200411

21

SS5: Eligibility Criteria for Feed-in Tariff Rate

Basic Rate: based on installed capacity and renewable resources. If combined multiple renewable resources via same meter: apply lowest basic FiT rate & combined installed capacity & shortest effective period. If uses multiple renewable resources with separate meters: separate FiT rates & installed capacity & effective period. If installed capacity to increase via same meter after FiT approval: shall apply for new FiT for new total installed capacity. Shall surrender existing FiT. New basic FiT rate is calculated based on lowest rate if multiple renewable resources used & total combined installed capacity & shortest new effective period Bonus FiT rate: Eligible if apply to entire RE installation. If not entire RE installation but with separate meter: each is addressed as separate application Giving false or misleading information or document: Fine: RM300K / 3 years jail
HH/200411

22

Biogas
(a) Use of gas (i) At the time of the application for feed-in approval: Relevant manufacturers specifications as tested engine according to international standards by certified testing bodies as may be recognised by the technology Authority from time to time pursuant to administrative guidelines. with electrical (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the efficiency of equipment specified in the manufacturers specifications referred to in subparagraph (i) was installed above 40% in the renewable energy installation. (b) Use of locally (i) At the time of the application for feed-in approval, either manufactured (aa) a certified copy of the manufacturers licence issued under the Industrial Co-ordination Act 1975 or assembled [Act 156]; gas engine (bb) a certificate of factory acceptance test or its equivalent; or technology (cc)a certificate from the manufacturer. (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the gas engine technology equipment from the manufacturer specified in the relevant document referred to in subparagraph (i) was installed in the renewable energy installation. (c) Use of landfill (i) At the time of the application for feed-in approval: or sewage gas (aa) either written evidence of the applicants ownership of a landfill or sewage system, or a certified as fuel source copy of a conditional or unconditional letter or agreement from or with the relevant municipal council or other entity agreeing to supply the applicant with the relevant fuel source; and (bb) written documentation from a qualified engineer setting out the design of the renewable energy installation utilising the relevant fuel source including the relevant equipment for the combustion process of the fuel source, the calculation of the indicative quantity of fuel source required and the calculation of the indicative quantity of renewable energy to be generated from the installation. (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the applicable requirements of the Renewable Energy (Technical and Operational Requirements) Rules 2011 relating to the commissioning of the renewable energy installation have been successfully met utilising the fuel source substantially in the manner described in sub-subparagraph (i)(bb).
HH/200411

23

Biomass
(a) Use of gasification technology (i) At the time of the application for feed-in approval: Relevant manufacturers specifications and data sheet tested according to international standards by certified testing bodies as may be recognised by the Authority from time to time pursuant to administrative guidelines, providing for the conversion of biomass to gasification through gasification or plasma technology. (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the applicable requirements of the Renewable Energy (Technical and Operational Requirements) Rules 2011 relating to the commissioning of the renewable energy installation have been successfully met utilising the technology referred to in subparagraph (i).

(b)Use of steam(i) At the time of the application for feed-in approval: Written confirmation by a qualified engineer verifying that the based electricity criteria will be met based on the design efficiency of the renewable energy installation, accompanied by the relevant generating calculations. systems with (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the criteria was overall efficiency successfully met during the commissioning of renewable energy installation in accordance with the applicable of above 14% requirements of the Renewable Energy (Technical and Operational Requirements) Rules 2011.

(c) Use of locally (i) At the time of the application for feed-in approval, either manufactured or (aa) a certified copy of the manufacturers licence issued under the Industrial Co-ordination Act 1975 [Act 156]; assembled (bb) a certificate of factory acceptance test or its equivalent; or gasification (cc) a certificate from the manufacturer. technology (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the gasification technology equipment from the manufacturer specified in the relevant document referred to in subparagraph (i) was installed in the renewable energy installation.
(d)Use of municipal (i) At the time of the application for feed-in approval: solid waste as (aa) either written evidence of the applicants ownership of a landfill, or a certified copy of a conditional or fuel source unconditional letter or agreement from or with the relevant municipal council or other entity agreeing to supply the applicant with the fuel source; and (bb) written documentation from a qualified engineer setting out the design of the renewable energy installation utilising the fuel source including the relevant equipment for the combustion process of the fuel source, the calculation of the indicative quantity of fuel source required and the calculation of the indicative quantity of renewable energy to be generated from the installation. (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the applicable requirements of the Renewable Energy (Technical and Operational Requirements) Rules 2011 relating to the commissioning of the renewable energy installation have been successfully met utilising the fuel source substantially in the manner described in sub-subparagraph (i)(bb). 24 HH/200411

Solar Photovoltaic
(a) Use as (i) At the time of the application for feed-in approval: Design drawings accompanied by the installation in written confirmation by a qualified engineer that the criteria will be met based on such design buildings drawings. (ii) Prior to the feed-in tariff commencement date: Testing and commissioning report . (b) Use as building material (i) At the time of the application for feed-in approval: Design drawings accompanied by the written confirmation by a qualified engineer that the criteria will be met based on such design drawings. (ii) Prior to the feed-in tariff commencement date: Testing and commissioning report . At the time of the application for feed-in approval, either (aa) a certified copy of the manufacturers licence issued under the Industrial Co-ordination Act 1975 [Act 156]; (bb) a certificate of factory acceptance test or its equivalent; or (cc) a certificate from the manufacturer. Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the solar photovoltaic modules from the manufacturer specified in the relevant document referred to in subparagraph (i) was installed in the renewable energy installation.

(c) Use of locally (i) manufactured or assembled solar photovoltaic modules (ii)

(d) Use of locally (i) At the time of the application for feed-in approval, either manufactured (aa) a certified copy of the manufacturers licence issued under the Industrial Co-ordination or assembled Act 1975 [Act 156]; solar inverters (bb) a certificate of factory acceptance test or its equivalent; or (cc) a certificate from the manufacturer. (ii) Prior to the feed-in tariff commencement date: Written confirmation by a qualified engineer that the solar inverters from the manufacturer specified in the relevant document referred to in subparagraph (i) was installed in the renewable energy installation.
HH/200411

25

Part III: Connection, Purchase & Distribution (& Subsidiary Legislations)

High Voltage

LV Connection

MV Biomass Power Plant Connection

MV Connection

MV Connection
Solar Power Plant

Solar BIPV LV Connection

HH/200411

26

SS2: Power System Study (PSS)

PSS conducted by DL, but paid by FIA RE installations:
0kW to 24kW single phase LV: not required >24kW to 180kW 3 phase LV: not required >180kW connected to MV: required

PSS standardized fees (cost to FIA) to DL:

HH/200411

Up to 1MW RE: RM20K to complete within 30 days >1MW to 10MW: RM40K to complete within 30 days >10MW to 30MW: RM60K to complete within 40 days Additional for Insulation Coordination Studies (if required): RM20K within 10 days Technical feasibility Point of connection Cost for connecting RE Any remedial action by DL to accept RE
27

PSS to provide factual and transparent results

PSS result cannot be used by DL to refuse RE connection [S.13(2) REA]

SS2: Technical & Operational Requirements

1. 2. 3. 4. 5. 6. 7. Interpretation Planning Connection Metering Commissioning Operation & Control Billing

28

SS2: Planning & Connection Issues

Determine nearest connection point Shallow connection charging method
Capex up to connection point by FIAH Capex after connection point by DL

Plant/apparatus ownership:
determined by boundary of ownership meters and cables: handed-over to DL

Rights of way Info to submit Requirements: connection, protection and control, operational, power factor, standby supply, etc. Competent person, P.E.
29

SS2: Nearest Connection Point & Max Limit

PMU 132kV / 33kV HV / MV RE (45MW) / 30MW PPU 33kV / 11kV MV RE 30MW / 1MW PE 11kV / 0.4kV MV / LV RE 1MW / 180kW Feeder Pillar 0.4kV / 0.23kV LV RE 180kW

30

SS2: Connection Point, Ownership Boundary, Metering

PMU 132kV / 33kV
DL A

PPU 33kV / 11kV

PE 11kV / 0.4kV
Direct Feed

Feeder Pillar 0.4kV / 0.23kV

DL A

DL A
Ownership Boundary DL Meter

PPU 33kV / 11kV

1MW
But meter within OB is not handed-over

DL B

Direct Feed to DL B
DL Meter FiT Meter
HH/200411

Direct Feed

Indirect Feed (Single consumer & LV only)

31

SS2: Connection Point, Ownership Boundary, Metering

PMU 132kV / 33kV
DL A

PPU 33kV / 11kV

Direct Feed DL A

PE 11kV / 0.4kV
Direct Feed

Feeder Pillar 0.4kV / 0.23kV

DL A
Ownership Boundary

PPU 33kV / 11kV

Direct Feed to DL A

1MW

DL B
1MW limit to PE, next RE have to go to next nearest CP

1MW

32

SS2: Connection Point, Ownership Boundary, Metering

PMU 132kV / 33kV
DL A Direct Feed

PPU 33kV / 11kV

Direct Feed DL A DL A

PE 11kV / 0.4kV
Direct Feed

Feeder Pillar 0.4kV / 0.23kV

DL A
Ownership Boundary

PPU 33kV / 11kV

But Indirect Feed to DL A is OK for single consumer & LV only (not a DL)

1MW

DL B

Indirect Feed to DL A

30MW limit to PPU, next RE have to go to next nearest CP

1MW

29MW
33

SS2: Metering Issues

Location of revenue meter closest to connection point determined by DL Metering signals => remote reading by DL for LPC (MV connection) Meter procurements:
By FIAH and comply to (i) Specs & Accuracy, (ii) Test Requirements MV meter: remote signal capable Indirect Feed: FiT revenue meter + change DL meter to import/export type

Meter readings:
Direct Feed: LV (OPC) and MV (LPC) directly by DL (not join reading but FIAH can request to check if in doubt) Indirect Feed: only for LV (OPC), read by FIAH via web based (TNB only?); to read FiT reading, import & export readings

Meter maintenance: by DL (except for indirect feed FiT meter)

34

Commissioning
Competent, P.E. Report and evidence Declaration

HH/200411

35

Operation & Control

Upon application: submit estimated annual energy yield (DAA) for each year of entire effective period. For > 12MW installed capacity: penalty for <70% DAA. No penalty for >DAA, but the following year DAA will be adjusted according to incremental % of actual yield if >110% of DAA (Or limit actual yield to 130% of DAA for FiT?). Requirements for forecast and despatch, outages, maintenance, communication facilities: for >12MW or >3MW? (Peninsular, Sabah?)

HH/200411

36

REPPA: Meter readings & FiT Payments

Connection Voltage Meter Reading
Payment by DL to FIAH
Or Payment Advice to be issued with payment?

Recovery by DL from SEDA Payment by Data in electronic SEDA to DL

form for each REPPA format?

LV Direct Feed

By DL: to issue Payment Advice to FIAH upon meter reading in Month 2, for RE generation of Month 1 By FIAH: to submit meter readings (RE, import, export) to DL via web based system by the 7th of Month 2, for RE generation and electricity consumption (import & export) of Month 1. DL to issue payment advice within 7 days of readings. By DL: to issue Payment Advice to FIAH upon meter reading in Month 2, for RE generation of Month 1

Before the 7th of Month 3

By the 7th of Month 3

By the end of Month 3

LV Indirect Feed

Within 30 days of submission, but not later than the 7th of Month 3)

By the 7th of Month 3

By the end of Month 3

MV Direct Feed
HH/200411

Before the 7th of Month 3

By the 7th of Month 3

By the end of Month 3

37

Part IV S.16: FiT Payment & Duration

SS2: FiT payment is calculated based on actual kWh reading by the revenue meter * (new kWh reading minus last kWh reading) x FiT rate ] RE installations RE installed capacity [A] RE generation/month [B] FiT rate [C] FiT duration [D] FiT payment by TNB to FIAH per month = [C x B] Capex Biogas 4 MW Biomass 10 MW Small Hydro 10 MW Solar PV 6 kW

2,044 5,110 4,166.67 600 MWh/month MWh/month MWh/month kWh/month RM 0.34 per kWh 16 years RM 694,960 per month RM 0.33 per kWh 16 years RM 1,686,300 per month RM 0.24 per kWh 21 years RM 1,000,000 per month RM 1.46 per kWh 21 years RM 876 per month

RM 40 mil
4.8

RM 90 mil
4.5

RM 90 mil
7.5

RM 90,000
8.6
38

Simple Payback Period

HH/200411

Part IV S.19: Recovery of Moneys & S.20: Admin Fees

S = [ ( FiTn DCn ) x kWhn ]
RE Fund (SEDA) Grid Connection Point Medium voltage 1kV (2.2kV, 6.6kV, 11kV, 33kV) Low voltage <1kV (0.23kV, 0.4kV) Displaced Cost (Subsid) 0.2047 0.3131

(U)

(S)
SEDA

(A)

(U) Distribution Licensee

(S)

(F) (D) (S) (D)

FiT payment Displaced Cost

IV - S.16 + REPPA IV - S.19 + Subsid

(S) = (F) - (D)

(F) FIAH

Recovery of Money

IV - S.19 + Subsid
IV - S.20 + Subsid IV - 20 + Subsid
39

(U) = 2% x (S) Admin fee to DL (A) = 3% x (S) Admin fee to SEDA

Displaced Cost Calculation

displaced cost means the average cost of generating and supplying one kilowatt hour of electricity from resources other than the renewable resources through the supply line up to the point of interconnection with the renewable energy installation The displaced cost will increase/decrease proportionally to incremental/reduction rate of electricity tariff. PDC = DC x (1 TRR)
PDC: prevailing displaced cost; TRR: rate of tariff revision in %

Year
2005

Tariff Revision
-

LV Displaced Cost (RM/ kWh)

0.2322

MV Displaced Cost (RM/kWh)

0.1518

2006
2008 2009 2011
HH/200411

+ 12% (1st June 2006)

+ 25% avg (1st July 2008) - 3.7% (1st March 2009) -

0.2600
0.3250 0.3131 0.3131

0.1700
0.2125 0.2047 0.2047
40

Part IV S.16: Payment, S.19: Recovery, S.20: Admin Fees

RE installations RE installed capacity [A] Biogas 4 MW 2,044 MWh/month RM 0.34 /kWh 16 years Biomass 10 MW 5,110 MWh/month RM 0.33 /kWh 16 years Small Hydro 10 MW 4,166.67 MWh/month RM 0.24 /kWh 21 years Solar PV 6 kW

RE generation/month [B]
FiT rate [C] FiT duration Displaced cost [D] FiT payment by TNB to FIAH [E] = [C x B] Simple Payback Period Recovery of money by TNB from RE Fund via SEDA [F] = [(C D) x B] Value of 2% Admin Fee paid to TNB [G] = [2% x F] SEDA payment to TNB = [F + G] Value of 3% Admin Fee paid to SEDA [I] = [3% x F] Total cost to RE Fund (per month) = [F + G + I] Ratio of TNBs cost against FiT payment = [D / C]

600 kWh/month
RM 1.46 /kWh 21 years

RM 0.2047 /kWh RM 0.2047 /kWh RM 0.2047 /kWh RM 0.3131 /kWh RM 694,960 4.8 years RM 276,553.20 RM 5,531.06 RM 282,084.26 RM 8,296.60 RM 290,380.86 60.2% RM 1,686,300 4.5 years RM 640,283.00 RM 12,805.66 RM 653,088.66 RM 19,208.49 RM 672,297.15 62.0% RM 1,000,000 7.5 years RM 147,083.33 RM 2,941.67 RM 150,025.00 RM 4,412.50 RM 154,437.50 85.3% RM 876 8.6 years RM 688.14 RM 13.76 RM 701.90 RM 20.64 RM 722.55 21.4%
41

HH/200411

Part IV S.17: FiT Degression

Degression rate to commence on 1st January every year Revision: at least once every 3 years
42

HH/200411

1.80

Part IV S.21: Grid Parity

Upon grid parity: FIAH will be paid prevailing DC rate. DL cannot claim from RE Fund (SEDA)

1.70
1.60 1.50 1.40 1.30 1.20 1.10

Displaced Cost (LV) Displaced Cost (MV) FiT Biogas FiT Biogas-Waste FiT Biomas FiT Biomass-Waste FiT Small Hydro FiT Solar PV FiT Solar PP

RM/kWh

1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00

Grid Parity

2015

2026

2041

2011

2012

2013

2014

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2042

2043

2044

2045

2046

2047

2048

2049

HH/200411

2050

43

Part V S.24: Allocation from Tariff & SS4

2. (1) TNB shall allocate and pay into the Fund a sum equivalent to one per centum of the tariffs levied by it under subsection 26(1) of the Electricity Supply Act 1990 in respect of the supply and sale of electricity in Peninsular Malaysia after the date of coming into operation of this Order, in the manner set out in subparagraph (2). (2) The payment referred to in subparagraph (1) shall be made monthly in arrears in the following manner:
a) the said payment shall be calculated based on one per centum of Tenaga Nasional Berhads electricity sales revenue as invoiced to its consumers in Peninsular Malaysia after the date of coming into operation of this Order; the first payment shall be deposited by Tenaga Nasional Berhad into the Fund within three calendar months from the date of coming into operation of this Order; and each subsequent monthly payment shall be deposited by Tenaga Nasional Berhad into the Fund on or before the first day of each month thereafter.

b) c)

Reconciliation of payments 3. (1) The Authority shall annually reconcile

(a) all payments made by Tenaga Nasional Berhad under paragraph 2; and (b) one per centum of its electricity sales revenue as invoiced to its consumers in Peninsular Malaysia after the date of coming into operation of this Order and reflected in its audited financial statements 44 HH/200411

Part V S.24: Allocation from Tariff & SS4

Example:
Year Unit 2010 2011 2012 2013 2014 2015 TNB (P.M.) Electricity Sales GWh 100,000 100,000 100,000 100,000 100,000 100,000 Avg. Tariff RM/kWh 0.3131 0.3131 0.3505 0.3505 0.3680 0.3680 Example Tariff Increment % 0% 0% 11% + 1% 0% 5% 0% TNB Electricity Sales Revenue RM-mil 31,310 31,310 35,045 35,045 36,797 36,797 RE Fund % of TNB Sales Revenue % 0% 0% 1% 1% 1% 1% Annual RE Fund Collection RM-mil 0.00 189.00 350.45 350.45 367.97 367.97

Procedures (dates are indicative only):

Jan Tariff increment to TNB 1st Jan
HH/200411

Feb 1st billing to TNB consumers of new tariff By 1st Feb

Mar 1st payment of new tariff by consumers to TNB By 1st Mar 1st

Apr payment by TNB to SEDA 2nd

May payment by TNB to SEDA

N month Nth payment by TNB to SEDA

End of FY Reconcile based on audited financial statement 1% of electricity sales revenue (of tariff affected due to SS4) Within 30 days of report
45

By 1st Apr

By 1st May

By 1st of N

Part V S.24: Allocation from Tariff (& Subsid)

Cost Breakdown for Average Domestic Electricity Tariff
Subsidized Fuel for Power Generation Generation Cost Transmission & Distribution Cost FiT Levy FiTCost Customer Service Charge

16% 1% 20% 25% 38%

Note (subject to decision): For 2011, PEMANDU has provided RM189 mil for RE Fund. Thus, 1% tariff increment is only required by Jan 2012. 1% of electricity sales revenue (tariffs levied as per ESA S.26). In subsequent tariff reviews: - Additional +1% (for RE target) by Jan 2013; - Additional +1% (for ETP target) by Jan 2014. Thus, total = 2% + 1% by Jan 2014. In 2014, 3% RM0.01/kWh.
46

HH/200411

Part V S.24: Allocation from Tariff Possible Impact to Consumers

Sectors Annual Electricity Sales (2009) RM -mil 11,028.60 % RE Fund Cost Annual 1% No. of per Contribution Consumers Consumer to RE Fund per Annum RM-mil 110.29 28,502 1,229,261 RM 3,869.41 RM 89.92 RE Fund Cost per Consumer per Month

Industrial Commercial

41% 41%

RM 322.45 RM 7.49 34%: RM 1.92

(RM 0 if 200 kWh)

RM-mil 11,053.20 RM-mil 4,924.90 RM-mil 27,006.70

RM-mil 110.53 RM-mil 49.25 RM-mil 270.07

Domestic

18%

6,283,166
(34% = 2.14 mil)

34%: RM 23.05

Total
HH/200411

100 %

7,540,929

Average

Average
47

Part V S.23: RE Fund

3,000

Annual RE Fund Collection vs RE Fund Expenditures

Annual RE Fund Collection Annual RE & FIT Cost Final RE Fund Collection: 2030

2,500

2,000

RE Fund start

RM-million

1,500

RE Fund increment
Cumulated RE Fund is adequate to honour FiT commitment 2046
2044 2045 2046 2047 2048 2049

1,000

500

First REPPA (FiT) (21 years)

-

2020

2029

2042

2011

2012

2013

2014

2015

2016

2017

2018

2019

2021

2022

2023

2024

2025

2026

2027

2028

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2043

HH/200411

2050

48

Penalty
RE Bill 8(3) 12(9) 13(4) 14(3) 22(1) 24(2) 32(2) 35 39(7) Offender FIAH DL DL DL FIAH DL Any person Any person Any person Offence Fail to comply with feed-in approval condition Fail to sign REPPA within prescribed period Fail to connect RE within prescribed period Fail to purchase and distribute RE as a priority Dishonest RE generation Fail to allocate and pay to RE Fund Fail to to provide access to records Fail to comply to order from Authority Break/tamper/damage seal Penalty RM500K / 3 yrs jail RM1M RM1M RM1M RM1M / 5 yrs jail RM1M RM200K RM50K / 6 mths jail RM50K / 6 mths jail

51
58(11)
HH/200411

Any person
Any person

Obstruction towards auhtorized officer

Fail to comply to directions by the Authority

RM200K / 2 yrs jail

RM200K / 2 yrs jail
49

Others
S.56. (1) The Authority shall monitor all significant matters relating to the implementation and performance of the feed-in tariff system and submit a report thereof to the Minister after the end of each financial year of the Authority. S.60. The Minister may make regulations for all or any of the following purposes:

S.61. The Authority may make such rules for all or any of the following matters
S.63. The Minister may, by order published in the Gazette, amend the Schedule.
To be read together with: S.18. (1) The Authority shall review the degression rates in respect of any category of renewable energy installation at least once every three years after the date this Act comes into operation for the purposes of improving the overall performance of the feed-in tariff system to better achieve the objective of this Act.
HH/200411

50

Others
Existing renewable energy generators S.64. (1) An eligible producer who has executed an agreement for the sale and purchase of electricity with a distribution licensee prior to the coming into operation of this Act shall have the option of either a) applying to participate in the feed-in-tariff system, terminating any such prior agreement with the distribution licensee with the consent of the distribution licensee and entering into a renewable energy power purchase agreement prescribed under this Act; or b) continuing under his or its existing agreement with the distribution licensee and not participating in the feed-in tariff system. (3) ..the effective period applicable to such feed-in approval holder shall be reduced by a period equivalent to the period during which his or its renewable energy installation had generated electricity for commercial sale to the distribution licensee prior to the grant of the feed-in approval.
S.65. Existing licences: no change
HH/200411

51

RE Policy & Action Plan: Goals

[Exclude EPP10]
25,000

Cumulative RE Installed Capacity

Solar PV Solid Waste Mini Hydro
15,000

20,000

2020 2.1 GW

2030 3.5 GW

2050: 2050 21.4 GW 11.5GW (73%) 44.2 GWh/Yr (24%) Cum. 629.2 mil T-CO2

Biogas Biomass RE (RE Policy & Action Plan) RE (Business as Usual)

MW

10,000

5,000

2015: 985 MW (6%) 5.4 GWh/Yr (5%) Cum. 11.7 mil T-CO2

2020: 2,080 MW (11%) 11.3 GWh/Yr (9%) Cum. 45.7 mil T-CO2

2030: 4,000 MW (17%) 17.2 GWh/Yr (12%) Cum. 163.2 mil T-CO2

2038

2047

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2039

2040

2041

2042

2043

2044

2045

2046

2048

2049

HH/200411

Year

2050

52

RE Goals (RE Policy + EPP-10)

30,000

Cumulative RE Installed Capacity

Solar PP

25,000

Solar PV
Small Hydro Biomass-Waste

20,000

Biomass Biogas-Waste Biogas

2020 2.1 GW

2030 3.5 GW

2050: 26.3 2050GW (74%) 42.6 GWh/Yr (19%) 11.5 GW mil T-CO2 Cum. 597.2

15,000

2030: 7,088 MW (25%) 21.0 GWh/Yr (12%) Cum. 165.7 mil T-CO2 2020: 3,140 MW (14%) 12.6 GWh/Yr (9%) Cum. 45.6 mil T-CO2

MW

10,000

5,000

2015: 1,275 MW (7%) 5.7 GWh/Yr (5%) Cum. 11.3 mil T-CO2

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050

HH/200411

Year

53

- SEDA Bill SEDA Bill: an Act to provide for the establishment of the Sustainable Energy Development Authority of Malaysia and to provide for its functions and powers and for related matters. Part I: Preliminary Part II: The Authority Part III: Functions and Powers of the Authority Part IV: Employee of the Authority Part V: Finance Part VI: General

sustainable energy means energy which, in its generation, provision and use, is such that it meets the needs of the present without compromising the ability of future generations to meet their needs, and includes renewable energy.
HH/200411

54

Sustainable Energy Development Authority of Malaysia (SEDA Malaysia)

Ministry of Energy, Green Technology & Water
Energy RE (& EE) Sector Green Technology
Green Technology Sector MGTC SPAN Regulator

Water

Electricity Sector

Water & Sewage Sector JBA Implementing Department JPP Implementing Department

ST

SEDA
Regulator Implementing Authority Green Technology Promoter

HH/200411

55

Part II S.5: Membership of Authority

1 Chairman; 2 to 4 representatives of Federal Government; 3 to 5 other members 1 Chief Executive Officer

Part IV - S.22:

Shall be persons who have experience and shown capacity and professionalism in matters relating to sustainable energy, finance, engineering, business or administration, or are otherwise suitable for appointment because of their special knowledge, experience or academic qualifications.

Office term: 2 years, and eligible for reappointment for maximum 3 consecutive terms.

(1) The Minister shall appoint a Chief Executive Officer on such terms and conditions, and who shall be paid such remuneration and allowances, as he thinks desirable.

(2) The person appointed as the Chief Executive Officer under subsection (1) shall be a person who, in the opinion of the Minister, has experience and shown capacity and professionalism in matters relating to sustainable energy, finance, engineering, business or administration, or are otherwise suitable for appointment because of their special knowledge, experience or academic qualifications.
(3) The Chief Executive Officer shall be responsible for the overall administration and management of the functions and the day-to-day affairs of the Authority. (6) In discharging his duties, the Chief Executive Officer shall act under the general authority and direction of the Authority.
HH/200411

(7) The Chief Executive Officer shall be an employee of the Authority.

56

Part III S.15: Functions of SEDA Malaysia

a) b) c) d)

e)
f) g)

h)
i) j) k) l)
HH/200411

Advise the Minister & Government entities on all matters relating to sustainable energy; Promote & implement national policy objectives for renewable energy; Promote, stimulate, facilitate & develop sustainable energy; Implement, manage, monitor & review the Feed-In Tariff system; Implement sustainable energy laws including the Renewable Energy Act & recommend reforms; Promote private sector investment in sustainable energy sector; Carry out / arrange research, advisory services & disseminate information; Conduct, promote & support sustainable energy researches & innovations; Conduct, promote & support sustainable energy training and human capacity development; Implement measures to improve public awareness; Act as focal point to assist the Minister on matters relating to sustainable energy & climate change matters relating to energy; Other function under sustainable energy law.
57

SEDA: Immediate Functions (Initial Setup: 2011)

Division Renewable Energy Deputy Chief Executive Officer / COO Feed In Tariff Functions
RE Act & regulations, RE Fund, RE policy & action plan FiT procedures, management, administration, enhancements RE targets, statistics, impact assessments, performance monitoring NKEA EPP10, Clinton Initiative National budget incentives and assessments RE technologies systems, operations, market development RE industry development, service providers, SME support RE financing, services RE R&D, centres of excellence, standards, codes & quality RE interconnection, enforcements, T&Cs Tax exemption assessment Suria programme, Green Schools, technical support

RE Industry

Chief Executive Officer

External Services

RE & EE: media/public relations, advocacy, communication, publication ISPQ trainings, capacity development, education programmes International cooperation, CDM FiT ICT system, website
KPIs, Internal audits, SEDA fund, budget, opex, invoices, payments Internal procedures, terms and conditions, HRMS, trainings, utilities Internal ICT hardwares, softwares, systems, intranet, internet, emails NKEA EPP9, co-generation, EE Masterplan Statistics, data collection & analysis, impact assessments NKEA EPP9: appliances rebates, buildings insulations, Government/ commercial sectors, industrial sector

Support

Finance Administration ICT

Energy Efficiency (NKEA-ETP Project)

HH/200411

Strategic Planning Strategic Initiatives

58

Thank You
More info on feed-in tariff is available from www.mbipv.net.my