Going solar and renewable

by Gan Pei Ling / 18 April 2011 © The Nut Graph

Have you ever wanted to install solar panels at your home, but couldn’t afford the capital cost? Once the Renewable Energy Act comes into force, this dream could become a reality.

Passed by the Dewan Rakyat on 4 April 2011, the Act will allow individuals to sell electricity produced from renewable sources like solar photovoltaic at a higher rate than traditional power producers to Tenaga Nasional Berhad (TNB).

This incentive is expected to boost renewable energy industries and its current electricity generation share in the country from under one percent to 11% by 2020. But how will this work? Where will the funds come from? And will home-owning Malaysians be willing to be part of the new system?

Feed-in-tariff

Following the footsteps of pioneering country Germany and our neighbours Thailand and the Philippines, Malaysia will be implementing the feed-in-tariff (FIT) system.

Solar panels (© Raebo | Wiki Commons)

Electricity produced from four types of sources — solar panels, small hydro, biogas and biomass — will benefit from the FIT mechanism under the Renewable Energy Act.

Among these four, residential homes would benefit most from solar photovoltaic as a renewable energy source.

The other three sources — small hydro, biogas and biomass, would be more suitable for implementation by businesses as the capital expenditure could amount to millions. The table below demonstrates the different costs involved in setting up the different sources.

Solar PV Small Hydro Biomass Biogas
Installed capacity 6kW 10MW 10MW 4MW
Expenditure RM90,000 RM90mil RM90mil RM40mil

Source: Adopted from Malaysia Building Integrated Photovoltaic Technology Application Project leader Ahmad Hadri Haris’s March 2011 presentation

 

Going solar at home

Breaking down the numbers: How your 4kW system will pay for itself in around 15 years.

A normal household would usually need about 4kW capacity worth of solar panels, which would cost around RM72,000 to install. That’s about the price of a brand new Toyota Vios.

Too expensive to go green? Think again. Your Toyota Vios’s commercial value will be depreciating at a rate of about 10% a year, but not the income that you would be receiving from installing solar panels on your roof.

Under the FIT system, TNB will sign a 21-year agreement with households and pay at least RM1.49 per kWh electricity generated. Assuming production of 400kWh per month, this would amount to a payout of RM596 per month.

If a household’s electricity bill is RM200 a month, there would still be a steady monthly income of RM396 for the next 21 years, which could be used to repay the loan taken to install the solar panels. The 4kW system would pay for itself and start turning a profit within 15 years.

It is also worth highlighting that one will get paid more under the FIT mechanism if locally-manufactured or assembly solar inverters or photovoltaic modules are used, and/or used as part of building materials.

Granted, the scheme doesn’t bring about huge profits all at once, but I think most middle-class families would now be able to afford to install solar panels should they wish to.

However, it should also be noted that there will be an annual degression rate of 8% for the solar photovoltaic system. In other words, the later one joins the FIT scheme, the lower the FIT rate one will receive. This is based on the assumption that the cost of solar panels would go down once more people adopt it.

The degression rate will be reviewed every three years by the soon-to-be-established Sustainable Energy Development Authority to ensure the rates remain reasonable.

Making renewable energy commercially-viable

Residential homes aside, commercial renewable energy producers are the ones who are set to benefit the most from the FIT mechanism and who seem most excited about the new scheme.

Prior to the Act, TNB paid the same rate of RM0.21per kWh for energy whether or not it was produced from environmentally-friendly resources or from fossil fuel.

Under the FIT scheme, biogas and biomass electricity producers will finally be rewarded for their pioneering efforts and get paid at least 28% more than fossil fuel producers, as shown in the table below.

Biogas Basic FIT rate (RM) Biomass Basic FIT rate (RM)
Up to 4MW 0.32 Up to 10MW 0.31
Up to 10MW 0.30 Up to 20MW 0.29
Up to 30MW 0.28 Up to 30MW 0.27

Source: Renewable Energy Bill

They will be signing a 16-year contract with TNB and enjoy the same competitive rates throughout the period.

In addition, those who use locally-manufactured or assembled gas engine or gastification technology will enjoy a bonus of one sen on top of their basic FIT rate.

Biogas electricity producers who use landfill or sewage gas as a fuel source will further enjoy a bonus of eight sen. Biomass players will enjoy an additional 10 sen for using municipal solid waste as their fuel source.

Already, a 26ha renewable energy park is being built on a remediated landfill in Pajam, Nilai, which would consist of a 2MW biogas plant and 8MW solar power facility, and is expected to generate RM12mil gross national income in 2020.

Meanwhile, small hydro producers enjoy less incentive at RM0.23 to RM0.24 per kWh but their contract with TNB will last for 21 years under the FIT mechanism.

Renewable Energy Fund

The government or TNB will not be forking out its own money to pay the higher FIT rates. The funds will come from consumers. There will be a one percent hike in the current electricity tariff, expected in 2012, the revenue of which will be used to finance the Renewable Energy Fund needed to finance the FIT scheme.

In other words, if your electricity bill is RM200, you will be paying an additional RM2 and that amount will go into the Renewable Energy Fund.

However, the FIT mechanism is not meant to last forever.

It is expected that the cost of producing renewable energy will eventually be cheaper than electricity currently produced by fossil fuel producers. This is also given the fact that current energy prices do not reflect the true cost of production due to subsidies for natural gas and the government-controlled electricity tariff.  Once the cost of renewable energy drops below fossil fuel energy, the Renewable Energy Fund will cease to exist.

At that point, TNB would be able to directly purchase power from renewable energy producers as it would be cheaper than electricity produced from fossil fuel like gas and coal.

(© Indymedia | Wiki Commons)

In the meantime, for the FIT mechanism to be implemented successfully, the government will need to widely publicise the new scheme to home owners and commercial producers and for many to participate in it. Only then will Malaysia be able to increase its renewable energy production to meet and hopefully, surpass its target of 11% by 2020. If Malaysia can push its renewable energy industries forward and make them cost-effective, not only would we be reducing our reliance on fossil fuel and carbon emission, we could even drop the idea of going nuclear, too.


Gan Pei Ling is looking forward to installing solar panels in her own home.

Greater transparency with Selangor’s sunshine law

by Gan Pei Ling / 15 April 2011 © Selangor Times

Selangor made history when it became the first state in Malaysia to pass the Freedom of Information (FOI) Enactment at its state assembly on April 1.

The state now joins more than 90 countries, including our neighbours Thailand and Indonesia, with an FOI law that recognises citizens’ right to information.

The Centre for Independent Journalism (CIJ) has hailed the passing of this law as a “breakthrough” amid an entrenched culture of secrecy among our government bodies backed by the Official Secrets Act (OSA).

Compared to its original draft tabled last July that was heavily criticised by civil societies, the FOI Enactment passed last Friday has seen several improvements.

Greater transparency and accountability

Firstly, civil servants can now be fined up to RM50,000 or sentenced to five years’ jail, or both, if they are convicted of intentionally giving false or misleading information.

It is also considered an offence if civil servants intentionally restrict or deny public access to information, unless that information is specifically exempted under the law. Civil servants were not liable to such a penalty in the original draft of the FOI Bill.

Secondly, the FOI Enactment now covers not only state departments, but local councils and all state-owned or state-controlled bodies as well.

Thirdly, the Appeals Board has been replaced by a more independent State Information Board to review appeals from applicants whose requests for information have been rejected.

Under the law, the State Information Board must be led by former legal practitioners and independent members not holding any political office or position in any political party.

CIJ also pointed out other improvements in the law, such as a narrower list of exemptions and a 20-year time limit for keeping exempted information confidential.

In addition, information officers and civil servants who disclose information in good faith are protected from prosecution, sanctions and suits.

Impact on general public

When asked by Selangor Times how the FOI Enactment would benefit the people, CIJ executive officer Masjaliza Hamzah said the law had far-reaching impacts in very practical ways.

“If there’s a landslide and the state sets up a committee to inquire into it, under the FOI Enactment, one could argue that the public should have access to reports about the proceedings, including statements recorded from those who testify.

“In other words, we don’t have to wait for the Menteri Besar to declassify it,” said Masjaliza.

“If the playground near your house is in a bad state, you can ask the local council for the amount spent on maintenance and find out who built it.

“Of course, all these are just scenarios; the law will need to be tested,” she said.

FOI select committee chairperson Saari Sungib (Hulu Kelang) had told Selangor Times previously that the state expects tremendous requests for information at local councils and land offices once the law is enforced.

One can anticipate concerned residents requesting information on the state and local councils’ expenditure, tenders awarded and land transactions, to name just a few.

Despite that, it should be noted that filing an application and pursuing it would still take time and energy.

Limitations of the FOI Enactment

Nevertheless, Selangor’s FOI Enactment has certain limitations.

Information classified as official secrets under the OSA is beyond the state law’s jurisdiction.

Individuals’ private information or trade secrets obtained by the state in confidence, as well as information that would “severely jeopardise” the state’s policy implementation or development, can also be kept confidential.

However, such information can be disclosed if there is an overriding public interest or if it is for the investigation of an offence or misconduct.

Besides that, a good FOI law should keep the application fees low, but this was not stated in the enactment.

“Costs should be kept low. Otherwise, it can become an administrative obstacle that denies the public affordable access to information,” CIJ pointed out in its April 1 statement.

CIJ also highlighted that the enactment did not specify the appointment process of the State Information Board.

“This must be an open and transparent process where the public can nominate candidates and the shortlist is published. This will strengthen the independence of the board,” CIJ added.

The law also does not mandate the periodic publication of information to make information more accessible to the public.

“Routine publication will help to reduce the administrative burden on information officers and increase transparency across all public bodies,” said CIJ in response to the shortcomings in the law.

The state’s FOI taskforce chief, Elizabeth Wong, said the FOI Enactment is a “dynamic, living legislation” and the legislature can improve the enactment from time to time.

“This is only the beginning of our journey to introduce a culture of openness and transparency in public administration,” said Wong.

Related post: Freedom of Information FAQ

Freedom of Information FAQ

Compiled by Gan Pei Ling / 15 April 2011 © Selangor Times

What is Freedom of Information (FOI) and why do we need laws to ensure it?

As tax- and ratepayers, the public has a right to know how governments use and manage public funds. FOI laws empower the public with access to information, and allow inspection of files and scrutiny of government administration.

In other words, a good FOI law helps promote transparency, accountability and reduce graft.

Does Malaysia has a FOI law?

We do not have a FOI law at the national level, but Selangor passed the FOI Enactment in its state assembly on April 1. It is the first state to do so.

Following Selangor’s footsteps, Penang also tabled its FOI bill in November 2010, but the draft has came under fire from civil societies as lacking in substance.

The Selangor FOI bill also came under severe criticism when it was first tabled in July 2010. However, the legislature appointed a select committee to consult civil societies and civil servants to improve the bill.

An amended version was tabled on March 28 and passed without objection on April 1.

When will Selangor’s FOI Enactment come into force?

Elizabeth Wong, who is leading the Selangor’s FOI taskforce, said it would take around six months for the state to enforce the law.

She said they would need to appoint and train information officers in all relevant bodies to handle information applications, draft the application forms, and set up a fee structure.

Selangor also needs to set up the State Information Board, which would review appeals from applicants whose request for information has been rejected.

Wong, who is also the executive councillor on tourism, consumer affairs and environment, estimated that Selangor would need to allocate RM1 million to enforce the FOI law.

Who will give me information? Is there a fee?

An information officer will be trained and appointed in each department to handle public requests for information. The information officer is required to respond in writing to your application within 30 days from the date of acknowledgement of the application.

Illiterate or people with disabilities may make a verbal request to the information officer, who will then make a written application on behalf of the applicant and provide a copy of it to the applicant.

The fee structure has yet to be ironed out by the state.

What is covered under Selangor’s FOI Enactment?

Once the FOI law comes into force, you can request for information from any state department, local council, or any entity owned or fully controlled by the Selangor government. For example, you can request for information on the state and local councils’ expenditure, tenders awarded, and land transactions.

However, information classified under the federal Official Secrets Act, individuals’ private information, and trade secrets obtained by the state in confidence are exempted under the FOI enactment.

Secrets from states or international organisations may also be kept confidential if its disclosure would affect Selangor’s relations with other states or international organisations.

The information officer may also refuse to disclose information that is likely to severely affect Selangor’s development.

Despite that, information must be provided if there is an overriding public interest that outweighs the risks stated above.

The information officer may also allow access to exempted information if it is required for the investigation of an offence or misconduct.

However, all exemptions lapse after 20 years.

What if my application is rejected, or if I’m not satisfied with the information provided?

You can appeal to the State Information Board, made up of former legal practitioners and independent members, within 21 days after you receive the notice from the information officer.

Sources:
FOI Enactment (Selangor)
www.cijmalaysia.org
www.righttoinformation.org

Related post: Greater transparency with Selangor sunshine law