Tag: Feed-in tariff

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Renewable energy alternative

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by Gan Pei Ling / 24 February 2012 © Selangor Times

Malaysia has been slow to adopt renewable energy options  compared to regional counterparts Thailand and the Philippines.

Putrajaya only implemented the feed-in-tariff system last December in a bid to boost the renewable energy industries in Malaysia.

Pioneered in  Germany, the feed-in tariff scheme allows individuals and companies to sell energy produced from renewable sources such as solar photovoltaic, biogas, biomass and mini-hydro at a higher rate to Tenaga Nasional Bhd (TNB).

Currently, renewable energy sources contribute less than one per cent to our energy mix, with only 62.3MW capacity in 2010.

Malaysia targets to increase renewable energy sources’ contribution to 5.5 per cent in 2015, 11 per cent in 2020 and 25 per cent by 2050.

However by 2050, advanced countries like Denmark and Germany are aiming to source energy mostly, if not entirely, from renewable sources.

A recent report published in international journal Energy Policy claimed that the world can achieve 100 per cent renewable energy by 2030 if proper measures are taken.

Australian environmental expert Dr Mark Diesendorf, speaking at a public forum in Kuala Lumpur last Thursday, pointed out that Malaysia has huge potential to develop renewable energy.

“You receive more sunlight than Germany (where solar photovoltaic contributes to 3.5 per cent of its electricity production),” observed the associate professor and deputy director of the Institute of Environmental Studies, University of New South Wales.

He said Malaysia should hire independent energy experts to conduct a comprehensive study on the country’s renewable energy potential.

TNB chief executive officer Datuk Seri Che Khalib Mohamad Noh had told the 200-odd audience earlier that renewable energy options have limitations in Malaysia.

He cited cloud cover and high capital costs for solar energy, sparse location of palm oil mills for biomass, high installation cost for biogas, and remote locations for mini-hydro.

In addition, the energy supply from these sources fluctuates. Therefore, nuclear power is needed to produce stable and constant base-load electricity.

New way of thinking

But Indian activist and author Praful Bidwai argues that the world needs to move away from the model of a centralised electricity production system.

“We need a much more flexible, de-centralised power production system that can adapt according to changing demand,” said Bidwai.

He added that it was more efficient to install independent solar panels or micro-hydro system to supply electricity to remote areas, compared to connecting them to the national grid to receive power produced miles away at a power plant.

His remark was echoed by Diesendorf, who described the concept of base-load power plants as “redundant”.

He said a combination of renewable energy sources can be used to meet electricity demand by the hour, with higher production during the day and lower production at night.

In addition, Diesendorf highlighted that Malaysia could explore its geothermal potential if it wants a base-load power provider to support its renewable energy systems.

Meanwhile, Dr Feroz Kabir Kazi from the University of Nottingham Malaysia also highlighted our country’s biomass potential via his case study.

Our country produces around 18 million tonnes of palm oil per year and oil palm plantations cover 15 per cent of our land – 4.7 million hectares. The empty fruit bunches, tree fronds, trunks, fibres and shell can be burned to generate power.

His 10MW case study showed that biomass is profitable in the long-term with the introduction of the feed-in tariff system.

“Demo projects are essential. Renewable energy has a bright future in Malaysia and its growth provides opportunities for local employment,” said the Associate Professor from the Chemical and Environmental Engineering Department.

Finally, Diesendorf also commented that Malaysia should strengthen its electricity conservation and energy efficiency programmes.

With the use of efficient electrical appliance and mindful consumption habit, Malaysians can reduce our demand for electricity.

TNB’s Che Khalib noted that Malaysians usually take their electricity for granted as it is still subsidised and cheap, for now, but the country must find a way to stabilise power demand as the cost of power production is likely to rise in future.

Related post: Going nuclear: An option?

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Going solar and renewable

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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.

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Green issues: Top 10 in 2010

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by Gan Pei Ling / 24 January 2011 © The Nut Graph

WHAT were the environmental highlights and low points of 2010? Do we stand a chance in conserving Malaysia’s amazing biodiversity and rich natural resources?

With the help of several “greenie” friends, I made a list of 10 major environmental happenings in Malaysia in 2010. These events give us an indication not only of how the environment continues to be under threat in Malaysia, but also how efforts are being made to combat that threat.

What stood out for you environmentally in 2010? What appalled, encouraged or enlightened you? List them down so that we may have a better picture about how we Malaysians are caring for our environment.

Power

1. Nuclear power plants

(Pic by merlin1075 / sxc.hu)

The federal government decided to go nuclear, announcing in May 2010 that Malaysia would build a nuclear power plant by 2021. Serious concerns were raised regarding safety and feasibility, considering the disastrous effects of accidents and shoddy radioactive waste management. Activists also questioned whether the government had exhausted renewable energy options, especially solar and biomass.

Despite this, Energy, Green Technology and Water Minister Peter Chin announced in December 2010 that Malaysia intended to build two plants, the second expected to be ready a year after the first.

To date, the government has not made public its nuclear waste management plan or emergency plan detailing what steps it would take in the event of a radioactive leak or natural disaster.

2. Sabah coal plant

Meanwhile, the federal government is planning to build a 300-megawatt coal plant on Sabah’s pristine east coast. Environmental coalition Green Surf and other activists have been campaigning tirelessly against the plant, reminding the government to consider cleaner alternatives like biomass and geothermal.

The plant’s detailed environmental impact assessment was rejected by the Environment Department. However, Chin said last December the proposed coal plant would go ahead, claiming it was the best option to ensure uninterrupted power supply.

3. Bakun Dam

The flooding of the Bakun Dam began in October 2010. The flooding of the 69,000ha area, roughly the size of Singapore, to the top of the Bakun Dam wall, about half the height of the Petronas Twin Towers, is expected to take over seven months.

Disputes over compensation for the approximately 10,000 indigenous peoples displaced from their land remain unresolved. The construction of the Bakun Dam began in 1996, and its cost was reported to have ballooned from RM4.5bil to RM7.5bil due to cost overrun and compensation for delays.

Despite that, Bakun is just the beginning. The 944-megawatt Murum dam is currently being constructed, and it was announced in February last year that five more dams with a combined capacity of 3,000-megawatts are in the pipeline.

4. Renewable energy bill

(Pic by ronaldo/sxc.hu)

The long-awaited Renewable Energy Act was finally tabled in Parliament in December 2010. Once passed, the Act will enable the public to sell electricity generated from renewable energy, most likely solar, to the power grid through the feed-in tariff scheme. Tenaga Nasional Bhd (TNB) will buy user-generated electricity at above-market rates. Concerns, however, are that TNB might pass on the cost to consumers by raising general electricity tariffs.

Other than the feed-in-tariff, it is unclear how the government intends to fulfill its target of generating 11% electricity from renewable energy by 2020.

Rivers

5. Rejang river logjam

This bizarre incident last October involved Malaysia’s longest river, the Rejang. Logs and debris choked the mighty river for 50km, making many places inaccessible by boat.

The Sarawak government tried to pass off the incident as a “natural” disaster due to floods. A BBC report, however, quoted the blog Hornbill Unleashed, which blamed poor infrastructure and excessive logging for the logjam.

Animals

6. Capture and trial of wildlife trafficker Anson Wong

In August 2010, Wong was caught with 95 boa constrictors in his bag at the Kuala Lumpur International Airport. I, personally, was delighted when the High Court substituted a Sessions Court sentence of six months’ jail and a RM190,000 fine with a five-year jail term. The heavier sentence will be more likely to serve as an effective deterrent.

In addition, Parliament passed a tougher Wildlife Conservation Act, which came into force in December 2010. Punishments include fines of up to RM500,000. and up to five years’ jail for smugglers of protected species like tigers and rhinos.

7. GM mosquitoes

(Illustration by Nick Choo)

Dengue, carried by the Aedes mosquito, has been endemic in Malaysia for years. Genetically modified (GM) mosquitoes have been proposed as a solution to curb its spread. The mutant male mosquitoes do not produce any offspring and help lower the mosquito population.

Great fears, however, have been expressed over this experiment as experts say removing the mosquito from the ecosystem could wreak havoc on other species, and ultimately, the environment.

Despite these concerns, the Health Ministry intended to release GM mosquitoes in Bentong, Pahang and Alor Gajah, Malacca. Protests from local and international groups resulted in a cancellation of the programme.

Forests

8. Selangor State Park

The federal government intends to build the Kuala Lumpur Outer Ring Road (KLORR) through the Selangor State Park to ease traffic congestion. This is in spite of the park being categorised as an Environmentally Sensitive Area (Rank 1) under the National Physical Plan-2. It serves as an important water catchment area, and as such, no development, except for eco-tourism, research and education purposes, should occur there.

The highway was originally designed to cut through the park and a potential Unesco World Heritage site,  the Klang Gates Quartz Ridge. The Selangor government convinced the developer to dig a tunnel to avoid damaging the quartz ridge last November. But it remains to be seen whether they can persuade the developer to re-route KLORR away from the state park, too.

Public outcry, not just from environmental groups but also concerned residents, continue. It remains to be seen whether the federal government will scrap its plans.

9.  Kuala Langat South peat swamp forest

Wong (front) visiting the Kuala Langat South peat swamp forest in December 2010.

The Selangor Agricultural Development Corporation proposed in 2010 to convert the 7,000ha Kuala Langat forest reserve into oil palm plantations. The clearing of the forest could reportedly generate RM1bil in timber revenue.

Selangor executive councillor for the environment Elizabeth Wong has led opposition to this proposal. A biodiversity audit, done with the assistance of environmental groups, found tapirs, sun bears, white-handed gibbons and rare trees.

The audit report has yet to be presented to the menteri besar, but I’m hopeful he will make the right decision. After all, the Pakatan Rakyat-led government promised to ban logging for 25 years when it came into power in 2008.

Reduce, Reuse, Recycle

10. No plastic bag day

The no plastic bags campaign, pioneered in Penang in 2009, is now nationwide. Plastic bags are no longer free on Saturdays except in Penang, where they’re not free every day.

Plastics manufacturers’ indignant reactions amuse me. Although the campaign may reduce our reliance on plastic bags, it is mainly symbolic. The campaign helps us rethink the impact of our use-and-throwaway consumption on the environment, but is unlikely to eliminate all use of plastics bags, or plastics, in our lives. Perhaps the manufacturers need to start listening and evolve in accordance with consumer demand for more sustainable products.

Although I initially found the above list a bit depressing, I realised that the story of public resistance against potential ecological destruction echoed throughout. And there are many more environmental heroes that did not make it into the list. A rural Kelantan community that successfully solved the human-elephant conflict in their village, for example. Or the Bukit Koman community that continues their attempts to protect their village from pollution from a gold mine.

And I’m sure there are many, many more such stories.

Again, Gan Pei Ling finds herself more inspired by grassroots communities and individuals than governments in 2010.