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Malaysia FIT presentation Dec 2010
 

Malaysia FIT presentation Dec 2010

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Ahmad Hadri Haris, the chief technical advisor to Malaysia's Minister of Energy

Ahmad Hadri Haris, the chief technical advisor to Malaysia's Minister of Energy

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Malaysia FIT presentation Dec 2010 Malaysia FIT presentation Dec 2010 Presentation Transcript

  • Renewable Energy & Feed-in Tariff Ir. Ahmad Hadri Haris hadri(a)mbipv.net.my Chief Technical Advisor RE/MBIPV National Project Team Ministry of Energy, Green Technology & Water 29th December 2010
  • DisclaimerThe information provided is within the context of theNational 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 MechanismsSupport Mechanism Promotion Mechanisms Approvals & licenses  Pilot projects & case studies REPPA: RM/kWh 0.21 (biomass,  Capacity building & lessons biogas); 0.17 (hydro), net-meter (PV)  Financing & policy developments SREP (Small Renewable UNDP-GEF Biomass Power UNDP-GEF Malaysia BuildingEnergy Power) Programme Generation & Demonstration Integrated Photovoltaic (Biogen) Project (MBIPV) Project Launched in 2001 Launched in 2002 Launched in 2005 Objectives: Objectives: To encourage Objectives: To demonstrate biomass production of RE by and biogas grid-connected To reduce unit cost of small power generators power generation projects solar PV technology by (10MW) and allow the 20% and increase capacity sale of generated by 330% via PV electricity to utilities applications in buildings Fiscal incentives: Pioneer Status or Investment Tax Allowance; import duties and sales taxes exemption. 4
  • Renewable Energy Status 8th Malaysia Plan (2001 - 2005) RE as the 5th Fuel Implied 5% RE in energy mix 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 MWOff grid (private palm oil millers & solar hybrids): 440 MW 5
  • Key Issues Affecting RE1. 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) China: RE Law 2006 (FiT in 2010) Chinese-Taipei: RE Law 2009 (FiT) South Korea: Feed-in Tariff 2003 (4th largest PV market worldwide in 2008) India: Feed-in Tariff in some states Japan: Re-initiation of National PV programme, (net feed-in tariff in 2010) Australia: RE Law 2009 (RPS) Feed-in Tariffs: Australian Capital Territory, South Australia, NewSouth East Asia: South Wales, Western Australia, Thailand: VSPP Regulation 2006 (FiT - adder) Queensland, Victoria, Tasmania, Malaysia: SREP & Suria Programmes Northern Territory 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 PolicyApproved by Cabinet on 2nd April 2010Policy 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 EnergyRenewable Energy (RE) is any form of primary energy fromrecurring and non-depleting indigenous resources, such asagricultural produce, hydro-power, solar, wind, solid-waste, etc. 13
  • National RE Resources and Potentials Solar Biomass Biogas Mini-Hydro Solid WasteMW (40% buildings) -Status: Total 39 -Status: Total 4.45 MW under MW under -Status: Total 30.3 -Status: Total 5.5 Construction as of Construction as of MW under MW Commissioned July 09 July 09 Construction as of on 1 August 2009 - Biogen Project - Palm Oil Mill July 09 - waste collected in - Palm Oil waste Effluent (POME), - Run of the river Malaysia (EFB), other Cassava waste, with minimum Approximately agricultural waste livestock, agro, impounding 21,000 tonnes/day (woodchips, paddy industrial waster husks, etc) water Others: Wind, Geothermal, Ocean-thermal, Tidal Wave, etc. 14
  • National RE Policy: Strategic Thrusts (Action Plan) RE Policy & Goals T2: Conducive T3: Human T4: RE R&D  RE Act RE Business Environment Capital Action Plan  Feed-in Tariff (FiT) Development  RE Fund  RE Authority T1 (foundation): Regulatory Framework  Responsibilities and obligations on power utilities and RE T5: Advocacy Programmes developers 15
  • Feed-in Tariff: Government Policy• 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
  • Choices of RE Support MechanismPolicy DescriptionNet 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 costsFeed-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 Mandatory portion of grid-connected RE power in the generation mix.Standard (RPS) 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 MechanismSource: 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 EEG 2009 100,000 ex 1 January 2009 90,000 New EEG 14% RE Hydropower Wind energy 1 August 2004 80,000 Biomass* Photovoltaics Electricity generation [GWh] 70,000 EEG 1 April 2000 60,000 50,000 Amendment to BauGB November 1997 40,000 StrEG 4.8% RE 30,000 1 January 1991 20,000 10,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 *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 figures – national and international development", Internet Update, KI III 1; Version: 15.12.2008; provisional figuresSource: BMU 20
  • Germany’s RESA: Impact to IndustrySource: BMU 21
  • Germany’s RESA: Impact to Industry Total Turnover from Renewable Energy Sources in Germany, 2007 Total: approx. € 25.5 billion Wind energy Geothermal EUR 5,790 mill. energy 1) (22.7 %) EUR 680 mill. (2.7 %) Hydropower EUR 1,270 mill. (5.0 %) Solar energy 2) EUR 7,030 mill. (27.6 %) Biomass EUR 10,700 mill. (42.0 %) 1) Large plants and heat pumps 2) Photovoltaics and solar thermal energy;Source: BMU-Brochure: "Renew able energy sources in figures – national and international development", Internet Update, KI III 1; Version: 15.12.2008; provisional figures 22
  • Germany’s RESA: Employments Employees in the German renewable energy sector 2004, 2006 and 2007 84,300 Wind energy 82,100 63,900 96,100 Biomass 95,400 56,800 50,700 Increase: approx. 55 % Solar energy 40,200 25,100 9,400 249,300 Hydropower 9,400 employees 9,500 235,600 160,500 employees employees 4,500Geothermal energy 4,200 1,800 2004 2006 2007 Public / Non-profit 4,300 Sector Jobs 4,300 nützige Mittel 3,400 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 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 23
  • FiT Implementation & Adaptation: World Wide (2009) 24
  • Critical Factors for Effective FiT MechanismMust 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.• 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.• Implementation by a competent body in a professional manner that includes constant monitoring, progress reporting and transparency. 25
  • Sustainable Energy Development Authority of Malaysia (SEDA Malaysia) Ministry of Energy, Green Technology & Water Energy Green Technology Water RE & EE Green TechnologyElectricity Sector Water & Sewage Sector Sector Sector ST MGTC SPAN JBA JPP SEDA Regulator Implementing Green Technology Regulator Implementing Implementing Authority promoter Department 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
  • Source of Fund for FiT Cost Breakdown for Average Domestic Electricity Tariff RE Fund: 1% in electricity Subsidized Fuel for Power Generation Generation Cost tariff at initiation of RE Act Transmission & Distribution Cost How much is 1%? FiT Levy FiT Cost Customer Service Charge  Eg: 1% of TNB’s FY2010 revenue = RM 303 million  In 2010, equivalent to 0.31 16% sen/kWh 1% 38%  For every RM100 per 20% month, RM1 goes to RE  Will not affect low income consumers (<200 25% kWh/month)  Polluters pay concept  Encourages EE and DSMNote: Additional 1% (for RE target) + 1% (for ETP target) in subsequent tariff reviews 28
  • RE Funding Flow for FiTResidential Commercial sector Industrial sector sector Electricity bills {RE Fund 1%} 100% (after tariff review) RE Fund Power Utilities (SEDA) {Revenue 99%} {(FiT – displaced cost) +fee} SEDA Government sets RE goals and provides {FiT payments} RE Law Solar BIPV SREP developers buildings 29
  • RE Fund (FiT Cost Pass Through): Examples Germany Italy Thailand Malaysia 2007 2009 2008 2009/2010 Retail Electricity 0.28 0.24 0.09 0.09 Tariff (average) US$/kWh US$/kWh US$/kWh US$/kWh FiT cost to 1% Incorporated consumers 4.8% 7.3% + 1% in tariff (% of retail tariff) (+1%) Germany: 2009Source: BMU, GSE, ERCT 30
  • FiT Degression Promotes cost reduction towards grid parity Promotes early commissioning and rewards early birds Point of control for ‘high’ FiT rates 31
  • RE Grid Parity Driver: Environment & Energy Security Electricity Prices ($/kWh) GRID PARITY 2010 2020 YearsSource: BP, REC Europe, USA, Japan Asia 32
  • Feed-in Tariff Rate for Biogas Capacity of renewable energy Feed-In-Tariff Effective Initial annual installation rate (RM-Sen period degression per kWh) rateInstalled capacity up to and including 4 32 16 years 0.50%MWInstalled capacity above 4 MW, and up to 30 16 years 0.50%and including 10 MWInstalled capacity above 10 MW, and up to 28 16 years 0.50%and including 30 MWAdditional for use of gas engine technology +2 16 years 0.50%with electrical efficiency of above 40%Additional for use of locally manufactured +1 16 years 0.50%or assembled gas engine technologyAdditional for use of landfill or sewage gas +8 16 years 1.80%as fuel source 33
  • Feed-in Tariff Rate for Biomass Capacity of renewable energy Feed-In-Tariff Effective Initial annual installation rate (RM-Sen period degression per kWh) rateInstalled capacity up to and including 10 31 16 years 0.50%MWInstalled capacity above 10 MW, and up to 29 16 years 0.50%and including 20 MWInstalled capacity above 20 MW, and up to 27 16 years 0.50%and including 30 MWAdditional for use of gasification technology +2 16 years 0.50%Additional for use of steam-based +1 16 years 0.50%electricity generating systems with overallefficiency of above 14%Additional for use of locally manufactured +1 16 years 0.50%or assembled gasification technologyAdditional for use of municipal solid waste +10 16 years 1.80%as fuel source 34
  • Feed-in Tariff Rate for Mini Hydro Capacity of renewable energy Feed-In-Tariff Effectiv Initial installation rate (RM-Sen e period annual per kWh) degression rateInstalled capacity up to and including 10 24 21 years 0%MWInstalled capacity above 10 MW, and up to 23 21 years 0%and including 30 MW 35
  • Feed-in Tariff Rate for Solar PV Capacity of renewable energy installation Feed-In-Tariff Effective Initial annual rate (RM-Sen period degression per kWh) rateInstalled capacity up to and including 4 kWp 123 21 years 8%Installed capacity above 4 kWp, and up to and 120 21 years 8%including 24 kWpInstalled capacity above 24 kWp, and up to and 118 21 years 8%including 72 kWpInstalled capacity above 72 kWp, and up to and 114 21 years 8%including 1 MWpInstalled capacity above 1 MWp, and up to and 95 21 years 8%including 10 MWpInstalled capacity above 10 MWp, and up to 85 21 years 8%and including 30 MWpAdditional for installation in buildings or building +26 21 years 8%structuresAdditional for use as building materials +25 21 years 8%Additional for use of locally manufactured or +3 21 years 8%assembled solar photovoltaic modulesAdditional for use of locally manufactured or +1 21 years 8%assembled solar inverters 36
  • Basis of Determining FiT Rates: Economic Viability of RE ProjectsFactors Biomass Solid Waste Solar PVIRR (based on typical rates for 6% - 13% 6% - 15% 3% - 12%power generation sector)Simple Payback Period (SPB) < 7 years < 7 years < 12 yearsPositive cash-flow (financing period) Yes Yes Yes (or neutral)Factors to calculate IRR Biomass Solid Waste Solar PVCapital expenditure 6-9.6 RM/W 15-19 RM/W 12-19 RM/WLoan rates & tenure 7-9%, 15 yrs 7-9%, 15 yrs 6-8%, 15 yrsFuel cost & transport RM/tonne N/a N/aO&M cost, depreciation, insurance 11.4% of capex 11.3% of capex 1.4% of capexAnnual cost increment 3% 4% 3%Revenues: FiT duration 16 yrs 16 yrs 21 yrsCapacity factor 70% 70% 13-16%%Other revenue N/a Yes N/a 37
  • FiT Rates = Empirical Value Conducive FiT rates 38
  • FiT Rate Comparison 39
  • FiT Implementation: Accounts & Payments 2 separate accounts with TNB: PV Generator • 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 = Inverter generated. ~ • Thus, 2 separate contracts with TNB. kWh Meter Generation 365.8 RM1.75/kWhLoad kWh RM0.31/kWh 417.2 Meter Consumption Public Grid 40
  • Case Study for Solar PV: Financial Returns from FiT BIPV System PV Rooftop (Residential) (Commercial)System capacity (kW) 4.00 1,000System price (RM) 72,000 13,500,000Down payment/ equity (RM) 7,200 3,375,000Loan amount 64,800 10,125,000Total loan repayment - 15 years (RM) 95,904 15,957,000Insurance, O&M - 21 years (RM) 23,907 6,041,204Total cost of ownership - 21 years (RM) 119,865 21,998,204FiT rates - 2011 (RM) 1.74 1.44Energy yield (kWh/kWp/year) 990 1,093Total revenues - 21 years (RM) 144,698 33,037,200IRR 5.4% 7.6%Simple payback period (years) 11.3 9.3 41
  • Case Study for Other RE: Financial Returns from FiT Biomass Solid WasteSystem capacity 10 MW 10 MWSystem price (RM) 90 mil 192 milDown payment/ equity (RM) 18 mil 38 milLoan amount 72 mil 154 milTotal loan repayment - 15 years (RM) 123 mil 262 milInsurance, O&M – 16 years (RM) 188 mil 483 milTotal cost of ownership – 16 years (RM) 310 mil 744 milFiT rates - 2011 (RM) 0.34 0.44Capacity Factor (%) 70% 70% 817 milTotal revenues - 16 years (RM) 366.9 mil (475 mil + 342 mil)IRR 10.6% 9.2%Simple payback period (years) 4.3 7 42
  • RE Learning Curves & Cost Reduction 43
  • Global Energy R&D Expenditures in USD-million (1974-2007) 44
  • FiT Degression: Towards Grid Parity 1.80 RE-FiT Rate vs Average Retail Electricity Tariff & Displaced Cost 1.70 1.60 1.50 Retail Tariff 1.40 Displaced Cost 1.30 FiT Biomas 1.20 FiT Biogas 1.10 FiT Mini Hydro 1.00 FiT Solid WasteRM/kWh 0.90 FiT Solar PV 0.80 Grid Parity 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 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 45
  • Balancing Act: RE Fund VS FiT Transaction Cost Annual RE Fund vs Annual FiT Transaction Cost 1,400 Final RE Fund Annual RE Fund Collection Annual FIT Cost (2030) 1,200 RE Fund The quota (MW) allocated for start each RE technology for each 1,000 RE Fund year is based on the: increment • Availability of RE FundRM-million 800 • Cash flow management of RE Fund. 2048 600 Last REPPA (FiT) (21 years) 400 200 First REPPA (FiT) (21 years) - 2017 2039 2011 2012 2013 2014 2015 2016 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 46
  • Annual RE Capacity Target (Quota, MW/Year) [RE Policy + EPP10] Biogas- Biomass- SmallYear Biogas Biomass Solar PV Solar PP TOTAL Sewage Waste Hydro2011 20 5 90 15 60 9 20 2192012 15 10 50 20 50 11 35 1912013 15 10 60 30 60 13 50 2382014 25 10 60 40 60 15 80 2902015 25 10 70 50 60 17 110 3422016 25 10 80 30 60 19 130 3542017 30 10 90 30 50 21 145 3762018 30 10 100 20 40 24 155 3792019 30 10 100 20 30 28 165 3832020 25 10 100 10 20 33 170 3682021 25 - 90 6 37 30 1882022 25 - 90 5 41 80 2412023 20 4 80 47 130 2812024 20 3 70 60 250 4032025 20 60 80 250 4102026 20 50 105 250 4252027 20 50 135 250 4552028 20 50 175 250 4952029 220 250 4702030 280 300 580 47
  • RE Policy & Action Plan: Goals [Exclude EPP10] 25,000 Cumulative RE Installed Capacity (& Ratio to Peak Demand) 2050: 2050 21.4 GW (73%) Solar PV 2030 11.5 GW GWh (24%) 44.2 20,000 Solid Waste 3.5 GW 2020 Mini Hydro 2.1 GW 15,000 Biogas BiomassMW RE (RE Policy & Action Plan) RE (Business as Usual) 10,000 2030: 4,000 MW (17%) 2020: 17.2 GWh (12%) 2,080 MW (11%) 2015: 11.3 GWh (9%) 5,000 985 MW (6%) 5.4 GWh (5%) - 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 2050 Year 48
  • Comparison of RE Targets 11% capacity, 9% energy by 2020 49
  • Displaced Cost of Electricity Displaced Electricity Cost* RE Technologies/ Resources (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* 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. Annual Electricity Sales Avg Retail Tariff Year Displaced Cost (RM/kWh) (RM-million/ year) (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 50
  • Comparison to Fossil Fuel Generation CostTNB’s “Marginal” Generation Cost (Ir Lalchand – 2005) Value of NG Subsidy in sen/kWh (at Share of Rate equivalent oil price of US$ per Assumed IPP Generation barrel) GWh (sen/kWh) 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 CostSummary 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 87.99 sen/kWh* Berhad’s supply (inclusive of gas subsidy) Inferred energy-only average cost of peak electricity to TNB 119.14 sen/kWh* (inclusive of gas subsidy) Inferred peak energy-only wholesale price of Telok Gong Power 239.69 sen/kWh* Station’s supply (inclusive of gas subsidy)* Inferred peak energy-only wholesale prices are valid at the time of peaking which may onlybe over a half-hour duration. 52
  • External Cost: Expected Carbon Price in IEA BLUE Map Scenario Grid System Carbon Emission Factor What does this mean? [t-CO2/MWh] Peninsular Malaysia 0.63 Peninsular Malaysia Sarawak 1.12 (2009) = 82.3 TWh x 0.63 t-CO2/MWh West of Sabah 0.65 = 51.8 mt-CO2 East of Sabah 0.80 x USD10/t-CO2 Malaysia (average) 0.69 = USD 518.3 million = RM 1.6 billion 53
  • FiT Transaction Cost & RE Capacity (RE Policy only) Cumulative Cost of FiT Payment (excludes displaced cost)Year Solid Biomass Biogas Mini-Hydro Solar PV Total Waste2020 RM 2.4 bil RM 0.7 bil RM 22.4 mil RM 0.8 bil RM 2.3 bil RM 6.2 bil2030 RM 5.5 bil RM 1.6 bil RM 22.4 mil RM 2.6 bil RM 5.4 bil RM 15.1 bil2050 RM 5.7 bil RM 1.7 bil RM 22.4 mil RM 3.8 bil RM 6.6 bil RM 17.8 bil Cumulative RE Capacity Year 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 54
  • 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). 55
  • Paradigm Shift...? Centralised VS Centralised + Decentralised Power 100%300% kWhkWh outputinput • Large power plants • Small-scale technologies • Unidirectional power flows • Bi-directional power flows • Monopolistic vertically integrated • Opportunities for all structure 56
  • Thank YouMore info on feed-in tariff is available from www.mbipv.net.my