Malaysia FIT presentation Dec 2010
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Transcript of Malaysia FIT presentation Dec 2010
Renewable Energy & Feed-in Tariff
Ir. Ahmad Hadri Harishadri(a)mbipv.net.my
Chief Technical AdvisorRE/MBIPV National Project Team
Ministry of Energy, Green Technology & Water
29th December 2010
Disclaimer
The information provided is within the context of the National Renewable Energy Policy and the Renewable
Energy Bill currently tabled in the Parliament.
The information has been compiled in good faith. However, the information may change without prior
notice.
2
Malaysia’s Renewable Energy Initiatives
8th Malaysia Plan (2001 – 2005)
RE as the 5th fuel
Implied 5% RE in energy mix
9th Malaysia Plan (2006 – 2010)
300 MW in Peninsular Malaysia
50 MW in Sabah
3
RE Support & Promotion Mechanisms
SREP (Small Renewable Energy Power) Programme
Launched in 2001
Objectives:To encourage
production of RE by small power generators (10MW) and allow the
sale of generated electricity to utilities
UNDP-GEF Biomass Power Generation & Demonstration
(Biogen) Project
Launched in 2002
Objectives:
To demonstrate biomass and biogas grid-connected power generation projects
UNDP-GEF Malaysia Building Integrated Photovoltaic
(MBIPV) Project
Launched in 2005
Objectives:
To reduce unit cost of solar PV technology by
20% and increase capacity by 330% via PV
applications in buildings
Support Mechanism Approvals & licenses REPPA: RM/kWh 0.21 (biomass,
biogas); 0.17 (hydro), net-meter (PV)
Promotion Mechanisms Pilot projects & case studies Capacity building & lessons Financing & policy developments
Fiscal incentives: Pioneer Status or Investment Tax Allowance; import duties and sales taxes exemption. 4
9th Malaysia Plan (2006 - 2010)
Targeted RE capacity to be connected to power utility grid:300 MW in Peninsular Malaysia, 50 MW in Sabah
Targeted power generation mix:56% NG, 36% coal, 6% hydro, 0.2% oil, 1.8% RE
RE capacity as of 31st December 2009: Connected to power utility grid: 55.5 MW
Off grid (private palm oil millers & solar hybrids): 440 MW
8th Malaysia Plan (2001 - 2005)RE as the 5th Fuel
Implied 5% RE in energy mix
Renewable Energy Status
5
Key Issues Affecting RE
1. Market failure exists:
The RE market “fails” due to misuse of monopsony power and information asymmetries;
the RE market is also constrained by financial and technological factors.
2. Constraints:
Inherent factors that constrain the performance of the market: Economic, Financial,
Technological.
3. Arbitrary price setting:
RE prices set arbitrarily.
4. Tensions and trade-offs:
The predicament of expecting that the utility will bear the higher costs of RE power (due
to the higher RE price).
5. Absence of Regulatory Framework:
Market failure compounded by absence of a proper regulatory framework, which
prevents proper and legal action from being taken.
6. Poor governance:
Poor governance affects the participation of stakeholders and legitimacy of the action.
7. Limited Oversight:
No concerted oversight of implementation problems.
8. Lack of institutional measures:
Lack of proper institutional measures to meet informational and technological needs.
6
‘Renewed’ Renewable Energy Initiative
8th Malaysia Plan (2001 – 2005)
RE as the 5th fuel
Implied 5% RE in energy mix
9th Malaysia Plan (2006 – 2010)
300 MW in Peninsular Malaysia
50 MW in Sabah
10th Malaysia Plan (2011 – 2015) & beyond
New RE Policy & Action Plan
7
RE Policy Development in Asia-Pacific (selected)
South Korea: Feed-in Tariff 2003 (4th largest PV market worldwide in 2008)
Japan: Re-initiation of National PV programme, (net feed-in tariff in 2010)
India: Feed-in Tariff in some states
China: RE Law 2006 (FiT in 2010)
Chinese-Taipei: RE Law 2009 (FiT)
Australia: RE Law 2009 (RPS)
Feed-in Tariffs: Australian Capital Territory, South Australia, New South Wales, Western Australia, Queensland, Victoria, Tasmania, Northern Territory
South East Asia: Thailand: VSPP Regulation 2006 (FiT - adder) Malaysia: SREP & Suria Programmes Singapore: Solar Capability Scheme Philippines: RE Law 2008 (FiT) Indonesia: Energy Law No.30 (RE) 2007
8
Shares of Renewable Energy World-Wide
9
New Power Generation Installed Capacity (EU: 2009)
10
Global Investment in Renewable Energy (2008-2009)
11
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.
Objectives:1. To increase RE contribution in the national power generation
mix;2. To facilitate the growth of the RE industry;3. To ensure reasonable RE generation costs;4. To conserve the environment for future generation;5. To enhance awareness on the role and importance of RE.
12
Definition of Renewable Energy
Renewable Energy (RE) is any form of primary energy from
recurring and non-depleting indigenous resources, such as
agricultural produce, hydro-power, solar, wind, solid-waste, etc.
13
National RE Resources and Potentials
Solar Biomass Biogas Mini-Hydro Solid Waste
Others: Wind, Geothermal, Ocean-thermal, Tidal Wave, etc.
-Status: Total 39 MW under
Construction as of July 09
- Biogen Project- Palm Oil waste
(EFB), other agricultural waste
(woodchips, paddy husks, etc)
-Status: Total 4.45 MW under
Construction as of July 09
- Palm Oil Mill Effluent (POME), Cassava waste, livestock, agro,
industrial waster water
-Status: Total 30.3 MW under
Construction as of July 09
- Run of the river with minimum
impounding
-Status: Total 5.5 MW Commissioned on 1 August 2009
- waste collected in Malaysia
Approximately 21,000 tonnes/day
MW (40% buildings)
14
T5: Advocacy Programmes
T1 (foundation): Regulatory Framework
T2: Conducive RE Business
Environment
T3: Human Capital
Development
T4: RE R&D Action Plan
RE Policy & Goals
RE Act Feed-in Tariff (FiT)
RE Fund
RE Authority
Responsibilities and obligations on power utilities and RE developers
National RE Policy: Strategic Thrusts (Action Plan)
15
• 10th Jun 2010: 10th Malaysia Plan (chapter 6)
• 15th Oct 2010: National Budget 2011 (paragraph 34)
• 25th Oct 2010: Economic Transformation Programme (chapter 6)
16
Feed-in Tariff: Government Policy
Choices of RE Support Mechanism
Policy Description
Net metering Any amount above what is consumed in the building is exported to the
grid. Any amount below what is consumed in the building is imported
from the grid (usually for PV produced electricity in home/building)
Direct capital support Cash rebate on a portion of grid-connected RE system costs
Feed-in tariffs (FIT) Premium price for electricity grid-connected paid to system owners by
utility or regulatory body. Price typically guaranteed for 20 years.
Renewable Portfolio
Standard (RPS)
Mandatory portion of grid-connected RE power in the generation mix.
Tradable certificates represents power that is produced.
Green Pricing Voluntary schemes where consumers pay a premium for grid-connected
power from utility or other electricity retailers.
Tax Incentives Reduction or elimination of tax paid in purchase of RE systems,
deduction of total cost of portion of system cost from business or
personal tax
17
RE Support Mechanism
Source: BSW 18
Verifications of FiT Effectiveness• Stern Review Report:
Sir Nicholas Stern stated that “Comparisons between deployment support through tradable quotas and feed-in tariff price support suggest that feed-in mechanisms achieve larger deployment at lower costs.”
• UNDP-GEF Report: Promotion of Wind Energy - Lessons Learned From International Experience and UNDP-GEF Projects
“Feed-In tariff policies have been very effective in Germany, Spain and Denmark, leading to the world’s first, second and fifth installed wind energy capacities.”
• International Energy Agency: Deploying Renewables - Principles for Effective Policies
“Feed-in Tariffs are more effective and cheaper than quotas for RE”
• Ernst & Young Report: Renewable Energy Country Attractiveness Indices:
“Feed-in Tariffs are cheaper than Trading System”
• Traditional RPS country/state moving towards Feed-in Tariff:
Japan started by 1st Nov 2009, UK implemented Feed-in tariff in 2010. Feed-in Tariff in USA: Gainesville (2009), Vermont (2009), SMUD (2010). South Africa implemented Feed-in Tariff in 2009.
19
FiT: Proven Effectiveness (Germany)
Development of electricity generation from renewable energies
in Germany, 1990 - 2007
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Ele
ctr
icit
y g
en
era
tio
n [
GW
h]
Hydropower Wind energy
Biomass* Photovoltaics
*Solid, liquid, gaseous biomass, biogenic share of w aste, landfill and sew age gas;
StrEG: Act on the Sale of Electricity to the Grid; BauGB: Constuction Code; EEG:Renew able Energy Sources Act;
Electricity from geothermal energy is not presented due to the negligible quantities of electricity produced;
Source: BMU-Brochure: "Renew able energy sources in f igures – national and international development", Internet Update, KI III 1; Version: 15.12.2008; provisional f igures
EEG
1 April 2000
New EEG
1 August 2004
StrEG
1 January 1991
Amendment to BauGB
November 1997
EEG 2009
ex 1 January 2009
4.8% RE
14% RE
Source: BMU 20
Source: BMU
Germany’s RESA: Impact to Industry
21
Total Turnover from Renewable Energy Sources
in Germany, 2007
Geothermal
energy 1)
EUR 680 mill.
(2.7 %)
Wind energy
EUR 5,790 mill.
(22.7 %)
Hydropower
EUR 1,270 mill.
(5.0 %)
Solar energy 2)
EUR 7,030 mill.
(27.6 %)
Biomass
EUR 10,700 mill.
(42.0 %)
Total: approx. € 25.5 billion
1) Large plants and heat pumps2) Photovoltaics and solar thermal energy;
Source: BMU-Brochure: "Renew able energy sources in f igures – national and international development", Internet Update, KI III 1; Version: 15.12.2008; provisional f igures
Germany’s RESA: Impact to Industry
22
Employees in the German renewable energy sector
2004, 2006 and 2007
3,400
9,500
4,300
9,400
95,400
82,100
4,300
4,500
9,400
50,700
96,100
84,300
63,900
56,800
25,100
1,800
40,200
4,200
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000
Geothermal energy
Hydropower
Solar energy
Biomass
Wind energy
Figures for 2006 and 2007 are provesional estimate
Source: BMU Projekt "Kurz- und langfristige Auswirkungen des Ausbaus der erneuerbaren Energien auf den deutschen Arbeitsmarkt", KI III 1; interim report March 2008
Public / Non-profit
Sector Jobs
nützige Mittel
Increase: approx. 55 %
2004 2006 2007
160,500
employees
235,600
employees
249,300
employees
Germany’s RESA: Employments
23
FiT Implementation & Adaptation: World Wide (2009)
24
Must be guaranteed via the RE Act, whereby:
• Access to the grid is guaranteed – utilities legally obliged to accept allelectricity generated by RE private producers.
• Local approval procedures are streamlined and clear.
• 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 andprovide businesses with clear investment environment.
• Adequate "degression" for the FiT rates to promote cost reduction toachieve “grid parity”
• Adequate fund is created to pay for the FiT rates (incremental cost) andguarantee the payment for the whole FiT contract period.
• Implementation by a competent body in a professional manner thatincludes constant monitoring, progress reporting and transparency.
Critical Factors for Effective FiT Mechanism
25
Sustainable Energy Development Authority of Malaysia (SEDA Malaysia)
Ministry of Energy, Green Technology & Water
Energy Green Technology Water
Electricity Sector
ST
Regulator
SEDAImplementing
Authority
MGTC
Green Technology promoter
RE & EE Sector
Green Technology Sector
Water & Sewage Sector
SPAN
Regulator
JBA
Implementing Department
JPP
Implementing Department
26
Functions of SEDA Malaysia
• 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• 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
27
38%
25%
20%
1%16%
Cost Breakdown for Average Domestic Electricity Tariff
Subsidized Fuel for Power Generation
Generation Cost
Transmission & Distribution Cost
FiT Levy
Customer Service Charge
Source of Fund for FiT
RE Fund: 1% in electricity tariff at initiation of RE Act
How much is 1%? Eg: 1% of TNB’s FY2010
revenue = RM 303 million In 2010, equivalent to 0.31
sen/kWh For every RM100 per
month, RM1 goes to RE Will not affect low income
consumers (<200 kWh/month)
Polluters pay concept Encourages EE and DSM
FiT Cost
Note: Additional 1% (for RE target) + 1% (for ETP target) in subsequent tariff reviews 28
{RE Fund 1%}
Residential sector
Electricity bills 100% (after tariff review)
Solar BIPV buildings
Commercial sector
{FiT payments}
{(FiT – displaced cost) +fee}
Industrial sector
Power UtilitiesRE Fund (SEDA)
SEDA
SREP developers
{Revenue 99%}
RE Funding Flow for FiT
Government sets RE goals and provides
RE Law
29
RE Fund (FiT Cost Pass Through): Examples
30
Germany2007
Italy2009
Thailand2008
Malaysia2009/2010
Retail Electricity Tariff (average)
0.28 US$/kWh
0.24 US$/kWh
0.09 US$/kWh
0.09 US$/kWh
FiT cost to consumers
(% of retail tariff)
4.8% 7.3%Incorporated
in tariff
1% + 1% (+1%)
Source: BMU, GSE, ERCT
Germany: 2009
FiT Degression
Promotes cost reduction towards grid parity Promotes early commissioning and rewards early birds Point of control for ‘high’ FiT rates
31
Driver: Environment & Energy Security
Years
Ele
ctri
city
Pri
ces
($/k
Wh
)
GRID PARITY
Source: BP, RECEurope, USA, Japan Asia
2010 2020
RE Grid Parity
32
Capacity of renewable energy
installation
Feed-In-Tariff
rate (RM-Sen
per kWh)
Effective
period
Initial annual
degression
rate
Installed capacity up to and including 4
MW
32 16 years 0.50%
Installed capacity above 4 MW, and up to
and including 10 MW
30 16 years 0.50%
Installed capacity above 10 MW, and up to
and including 30 MW
28 16 years 0.50%
Additional for use of gas engine technology
with electrical efficiency of above 40%
+2 16 years 0.50%
Additional for use of locally manufactured
or assembled gas engine technology
+1 16 years 0.50%
Additional for use of landfill or sewage gas
as fuel source
+8 16 years 1.80%
Feed-in Tariff Rate for Biogas
33
Feed-in Tariff Rate for BiomassCapacity of renewable energy
installation
Feed-In-Tariff
rate (RM-Sen
per kWh)
Effective
period
Initial annual
degression
rate
Installed capacity up to and including 10
MW
31 16 years 0.50%
Installed capacity above 10 MW, and up to
and including 20 MW
29 16 years 0.50%
Installed capacity above 20 MW, and up to
and including 30 MW
27 16 years 0.50%
Additional for use of gasification technology +2 16 years 0.50%
Additional for use of steam-based
electricity generating systems with overall
efficiency of above 14%
+1 16 years 0.50%
Additional for use of locally manufactured
or assembled gasification technology
+1 16 years 0.50%
Additional for use of municipal solid waste
as fuel source
+10 16 years 1.80%
34
Feed-in Tariff Rate for Mini Hydro
Capacity of renewable energy
installation
Feed-In-Tariff
rate (RM-Sen
per kWh)
Effectiv
e period
Initial
annual
degression
rate
Installed capacity up to and including 10
MW
24 21 years 0%
Installed capacity above 10 MW, and up to
and including 30 MW
23 21 years 0%
35
Feed-in Tariff Rate for Solar PVCapacity of renewable energy installation Feed-In-Tariff
rate (RM-Sen
per kWh)
Effective
period
Initial annual
degression
rate
Installed capacity up to and including 4 kWp 123 21 years 8%
Installed capacity above 4 kWp, and up to and
including 24 kWp
120 21 years 8%
Installed capacity above 24 kWp, and up to and
including 72 kWp
118 21 years 8%
Installed capacity above 72 kWp, and up to and
including 1 MWp
114 21 years 8%
Installed capacity above 1 MWp, and up to and
including 10 MWp
95 21 years 8%
Installed capacity above 10 MWp, and up to
and including 30 MWp
85 21 years 8%
Additional for installation in buildings or building
structures
+26 21 years 8%
Additional for use as building materials +25 21 years 8%
Additional for use of locally manufactured or
assembled solar photovoltaic modules
+3 21 years 8%
Additional for use of locally manufactured or
assembled solar inverters
+1 21 years 8%
36
Basis of Determining FiT Rates:Economic Viability of RE Projects
Factors Biomass Solid Waste Solar PV
IRR (based on typical rates for power generation sector)
6% - 13% 6% - 15% 3% - 12%
Simple Payback Period (SPB) < 7 years < 7 years < 12 years
Positive cash-flow (financing period) Yes Yes Yes (or neutral)
Factors to calculate IRR Biomass Solid Waste Solar PV
Capital expenditure 6-9.6 RM/W 15-19 RM/W 12-19 RM/W
Loan rates & tenure 7-9%, 15 yrs 7-9%, 15 yrs 6-8%, 15 yrs
Fuel cost & transport RM/tonne N/a N/a
O&M cost, depreciation, insurance 11.4% of capex 11.3% of capex 1.4% of capex
Annual cost increment 3% 4% 3%
Revenues: FiT duration 16 yrs 16 yrs 21 yrs
Capacity factor 70% 70% 13-16%%
Other revenue N/a Yes N/a37
FiT Rates = Empirical Value
Conducive FiT rates
38
FiT Rate Comparison
39
=~
kWh
365.8
kWh
417.2
Inverter
PV
Generator
Meter Consumption
Meter Generation
Load
Public Grid
=~
kWh
365.8
kWh
365.8
kWh
417.2
kWh
417.2
Inverter
PV
Generator
Meter Consumption
Meter Generation
Load
Public Grid
RM1.75/kWh
RM0.31/kWh
FiT Implementation: Accounts & Payments
2 separate accounts with TNB:
• Electricity consumption bill (Consumption Meter): consumer pays to TNB for kWh electricity consumed.
• FiT bill (Generation Meter): TNB pays to consumer for gross kWh electricity generated.
• Thus, 2 separate contracts with TNB.
40
Case Study for Solar PV:Financial Returns from FiT
BIPV System (Residential)
PV Rooftop (Commercial)
System capacity (kW) 4.00 1,000
System price (RM) 72,000 13,500,000
Down payment/ equity (RM) 7,200 3,375,000
Loan amount 64,800 10,125,000
Total loan repayment - 15 years (RM) 95,904 15,957,000
Insurance, O&M - 21 years (RM) 23,907 6,041,204
Total cost of ownership - 21 years (RM) 119,865 21,998,204
FiT rates - 2011 (RM) 1.74 1.44
Energy yield (kWh/kWp/year) 990 1,093
Total revenues - 21 years (RM) 144,698 33,037,200
IRR 5.4% 7.6%
Simple payback period (years) 11.3 9.3
41
Case Study for Other RE:Financial Returns from FiT
Biomass Solid Waste
System capacity 10 MW 10 MW
System price (RM) 90 mil 192 mil
Down payment/ equity (RM) 18 mil 38 mil
Loan amount 72 mil 154 mil
Total loan repayment - 15 years (RM) 123 mil 262 mil
Insurance, O&M – 16 years (RM) 188 mil 483 mil
Total cost of ownership – 16 years (RM) 310 mil 744 mil
FiT rates - 2011 (RM) 0.34 0.44
Capacity Factor (%) 70% 70%
Total revenues - 16 years (RM) 366.9 mil817 mil
(475 mil + 342 mil)
IRR 10.6% 9.2%
Simple payback period (years) 4.3 742
RE Learning Curves & Cost Reduction
43
Global Energy R&D Expenditures in USD-million (1974-2007)
44
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
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
RM
/kW
h
RE-FiT Rate vs Average Retail Electricity Tariff & Displaced Cost
Retail Tariff
Displaced Cost
FiT Biomas
FiT Biogas
FiT Mini Hydro
FiT Solid Waste
FiT Solar PV
FiT Degression: Towards Grid Parity
Grid Parity
45
-
200
400
600
800
1,000
1,200
1,400
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
20
47
20
48
20
49
20
50
RM
-mill
ion
Annual RE Fund vs Annual FiT Transaction Cost
Annual RE Fund
Annual FIT Cost
Final RE Fund Collection
(2030)
Last REPPA (FiT) (21 years)
First REPPA (FiT) (21 years)
RE Fund start
RE Fund increment
20
48
The quota (MW) allocated for each RE technology for each year is based on the:
• Availability of RE Fund
• Cash flow management of RE Fund.
Balancing Act: RE Fund VS FiT Transaction Cost
46
Annual RE Capacity Target (Quota, MW/Year)[RE Policy + EPP10]
47
Year BiogasBiogas-
SewageBiomass
Biomass-
Waste
Small
HydroSolar PV Solar PP TOTAL
2011 20 5 90 15 60 9 20 219
2012 15 10 50 20 50 11 35 191
2013 15 10 60 30 60 13 50 238
2014 25 10 60 40 60 15 80 290
2015 25 10 70 50 60 17 110 342
2016 25 10 80 30 60 19 130 354
2017 30 10 90 30 50 21 145 376
2018 30 10 100 20 40 24 155 379
2019 30 10 100 20 30 28 165 383
2020 25 10 100 10 20 33 170 368
2021 25 - 90 6 37 30 188
2022 25 - 90 5 41 80 241
2023 20 4 80 47 130 281
2024 20 3 70 60 250 403
2025 20 60 80 250 410
2026 20 50 105 250 425
2027 20 50 135 250 455
2028 20 50 175 250 495
2029 220 250 470
2030 280 300 580
-
5,000
10,000
15,000
20,000
25,000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
20
47
20
48
20
49
20
50
MW
Year
Solar PV
Solid Waste
Mini Hydro
Biogas
Biomass
-
5,000
10,000
15,000
20,000
25,000
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
20
47
20
48
20
49
20
50
MW
Year
Cumulative RE Installed Capacity (& Ratio to Peak Demand)
RE (RE Policy & Action Plan)
RE (Business as Usual)
2030 3.5 GW
2020 2.1 GW
2050 11.5 GW
2020:2,080 MW (11%)11.3 GWh (9%)
2030:4,000 MW (17%)17.2 GWh (12%)
2050:21.4 GW (73%)44.2 GWh (24%)
2015:985 MW (6%)5.4 GWh (5%)
RE Policy & Action Plan: Goals[Exclude EPP10]
48
49
Comparison of RE Targets
11% capacity, 9% energy by 2020
Displaced Cost of Electricity
* The displaced cost is the average cost of generating and supplyingelectricity through the utility’s supply line and up to the point ofinterconnection with the renewable energy systems. The displaced costwill increase proportionally to incremental rate of electricity tariff.
RE Technologies/ ResourcesDisplaced Electricity Cost*
(RM/kWh)
Biomass – MV 0.2047
Biogas – MV 0.2047
Small Hydro – MV 0.2047
Solar Power Plant – MV 0.2047
Solar PV – LV 0.3131
50
YearAnnual Electricity Sales
(RM-million/ year)Avg Retail Tariff
(RM/ kWh)Displaced Cost (RM/kWh)
2007 20,690 0.26 0.17
2009 25,924 0.3131* 0.2047*
* Due to average 25% tariff increment in 2008 and 3.7% tariff reduction in 2009
Comparison to Fossil Fuel Generation Cost
TNB’s “Marginal” Generation Cost (Ir Lalchand – 2005)
Assumed IPP GenerationShare of
GWhRate
(sen/kWh)
Value of NG Subsidy in sen/kWh (at equivalent oil price of US$ per
barrel)
At US$40 At US$60
• Combined cycle 1 40% 15 12.1 20.5
• Combined cycle 2 30% 16 12.1 20.5
• Coal 15% 18 0 0
• Steam (Gas) 10% 15 13.6 23.1
• Open Cycle Gas Turbine 1 2.5% 30 18.1 30.8
• Open Cycle Gas Turbine 2 2% 99 18.1 30.8
• Hydro 0.5% 12 0 0
Average 17.78
51
Comparison to Peak (Fossil Fuel) Generation Cost
Summary of Inferred Peak (Wholesale) Energy Price (First Principle - 2006)With different orders of despatch, the following rates were derived:
Inferred peak energy-only wholesale price of Port Dickson Power Berhad’s supply (inclusive of gas subsidy)
87.99 sen/kWh*
Inferred energy-only average cost of peak electricity to TNB (inclusive of gas subsidy)
119.14 sen/kWh*
Inferred peak energy-only wholesale price of Telok Gong Power Station’s supply (inclusive of gas subsidy)
239.69 sen/kWh*
* Inferred peak energy-only wholesale prices are valid at the time of peaking which may onlybe over a half-hour duration.
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External Cost: Expected Carbon Price in IEA BLUE Map Scenario
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Grid System Carbon Emission Factor [t-CO2/MWh]
What does this mean?
Peninsular Malaysia 0.63 Peninsular Malaysia (2009) = 82.3 TWhx 0.63 t-CO2/MWh
= 51.8 mt-CO2x USD10/t-CO2
= USD 518.3 million= RM 1.6 billion
Sarawak 1.12
West of Sabah 0.65
East of Sabah 0.80
Malaysia (average) 0.69
Year
Cumulative Cost of FiT Payment (excludes displaced cost)
Biomass Biogas Mini-Hydro Solar PVSolid
WasteTotal
2020 RM 2.4 bil RM 0.7 bil RM 22.4 mil RM 0.8 bil RM 2.3 bil RM 6.2 bil
2030 RM 5.5 bil RM 1.6 bil RM 22.4 mil RM 2.6 bil RM 5.4 bil RM 15.1 bil
2050 RM 5.7 bil RM 1.7 bil RM 22.4 mil RM 3.8 bil RM 6.6 bil RM 17.8 bil
Year
Cumulative RE Capacity
Biomass Biogas Mini-Hydro Solar PV Solid Waste Total
2020 800 MW 240 MW 490 MW 190 MW 360 MW 2,080 MW
2030 1,340 MW 410 MW 490 MW 1,370 MW 390 MW 4,000 MW
2050 1,340 MW 410 MW 490 MW 18,700 MW 430 MW 21,370 MW
FiT Transaction Cost & RE Capacity (RE Policy only)
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Potential Impact of National RE Policy by Year 2020
• Minimum RM 2.1 billion savings of external cost to mitigate CO2 emissions (total 42 million tonnes avoided from 2011 to 2020, on the basis of RM 50 per tonne of external cost);
• Minimum RM 19 billion of loan values for RE projects, which will provide local banks with new sources of revenues (at 80% debt financing for RE projects);
• Minimum RM 70 billion of RE business revenues generated from RE power plants operation, which can generate tax income of minimum RM 1.75 billion to Government (on basis of 10% profit value where income tax is 25% on profit);
• Minimum 52,000 jobs created to construct, operate and maintain RE power plants (on the basis of 15-30 job per MW).
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Paradigm Shift...?
• Large power plants
• Unidirectional power flows
• Monopolistic vertically integrated structure
• Small-scale technologies
• Bi-directional power flows
• Opportunities for all
Centralised VS Centralised + Decentralised Power
300% kWh input
100% kWh output
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Thank You
More info on feed-in tariff is available from www.mbipv.net.my