This document discusses Malaysia's Feed-in Tariff (FiT) program, which aims to encourage renewable energy development. The FiT program obligates electricity distributors to purchase renewable energy from producers at set rates over a period of time. This incentivizes renewable energy by making it economically viable. The program is funded by a renewable energy fund collected from electricity consumers. Since its implementation in 2011, Malaysia's FiT program has helped drive significant growth in solar installations. An example project discussed is an 8 MW solar farm that will supply electricity to the national grid for 21 years under the FiT rates.

1. Feed in Tariff: Malaysia Case
Studies
Khadijah bt Mohamad Syayuti
Research Officer, MEng (Mechanical)
Malaysia Japan International Institute of Technology
Universiti Teknologi Malaysia
Email: khadijahsyayuti@gmail.com

2. Climate Change “is the greatest market
failure the world has seen”.
Nicholas Stern – British Climate Economist

3.  This analysis from Nicholas Stern (British Climate
Economist) has stimulated decision makers in many
countries to consider new approaches to energy
policy.
 Energy is the most important factor in human
development, but our present dependence on fossil
fuels is in danger of causing untold harm to future
generations.
 Renewable energy (RE) is the best overall solution to
climate, energy and economic security.

5. Renewable energy for the future
 The big challenge for the renewable energy
industry has been to make the cost of clean
energy competitive with heavily-subsidized
conventional energy.
 Householders or energy companies who wanted
to install wind turbines or solar panels have been
faced with lengthy pay-back times.
 They have been forced to make a choice based
on ethics rather than economics.

6.  Without increased consumer demand
and political measures to facilitate
access to the market, manufacturers for
wind turbines and solar photovoltaic (PV)
panels, cannot produce the unit volumes
needed to bring prices down and drive
technological innovation
 The Feed-In Tariff (FIT) has proven to be
the most effective policy instrument in
overcoming these barriers

7.  A feed-in tariff is a policy mechanism or
government initiative, designed to
encourage rapid development of
renewable energy (energy that comes
from renewable resources such as wind,
sun and water)
 This simple, low-cost mechanism has
turned several European countries into
world leaders in the renewables sector.

8. FiT Mechanism in General

9. Malaysia National RE target
Assumptions:
 Feed in Tariff implemented
Source: KeTTHA, SEDA

10. FiT in Malaysia
3 success factors for FiT Implementation in
Malaysia:
 RE Act 2011
- Enforced 1 December 2011
 RE Fund
- 1% surcharge to electricity consumers
 Implementing agency
- Sustainable Energy Development Authority
Development (SEDA) enforced 1 September 2011

11. FiT implementation in
Malaysia
 Malaysia's Feed-in Tariff (FiT) system obliges
Distribution Licensees (DLs) to buy from Feed-in
Approval Holders (FIAHs) the electricity produced
from renewable resources (renewable energy) and
sets the FiT rate.
 The DLs will pay for renewable energy supplied to
the electricity grid for a specific duration.
 FiT mechanism would ensure that renewable
energy becomes a viable and sound long-term
investment for companies industries and also for
individuals.

12. Source: Sustainability Energy Authority Development (SEDA)

13. The following RE resources will be
eligible for FiT:
• Biomass (including solid waste);
• Biogas (including landfill gas &
sewage);
• Small-hydro; and
• Solar PV.

14. Feed in Tariff rates
Source: Greenpurchasingasia.com, SEDA

15. Renewable Energy Fund
 Established through the enforcement
of the Renewable Energy Act 2011.
 Important part of the FiT mechanism
which has been approved by the
Government to spear head the growth
of the renewable energy in the country

16. RE Fund is currently funded through the
following resources:
a) An initial funding of RM300million from the
Treasury;
b) A 1% surcharge collected from consumers’
electricity bill – except for domestic
consumers with electricity consumption of
less than 300kWh/month or consumers
currently paying electricity bill of less than
RM77 per month. The non-domestic
consumers will contribute to the 1%
regardless of their amount of electricity used
in that month

17. Sample of TNB bills

18. Installed Capacity of Plants
Source: SEDA
Source: SEDA

19. Example of project under FiT
Cypark Integrated Renewable Energy Park
• Biggest grid-connected solar farm in Malaysia to start production
March28th 2012
• It will supply electricity from its 8 MW capacity solar farm to the
national and under a Renewable Energy Power Purchase
Agreement (REPPA) signed with Malaysia utilities giant Tenaga
Nasional Berhad (TNB) at a tariff of 95 sen (US$0.30) per kWh for
the next 21 years
• It is the first utility-scale solar plant in Malaysia to operate since the
country’s feed-in tariff (FiT) scheme was launched on December 1st
2011

20. Location: Pajam, Negeri Sembilan, Malaysia
Ownership: Cypark Resources Berhad (CRB)
Company founded: 1998 by Tan Sri Razali Ismail, KK Siow and Daud
Ahmad
Total investment: RM100 million
Area: 26 ha
Total: 32,000 solar PV panels (phase 1)
Output: 8 MW

21. Conclusion
 FiT is the key for Malaysia to cut dependency on fossil
fuel.
 Supported with policies, projects and programmes
designed to cut carbon emission and manage energy
efficiently to be effective, particularly in sectors
including power generation, transport, urban planning,
water and waste management, and agriculture.
 Critical to cultivate a culture of making informed
decisions to promote efficient energy management to
reduce electricity consumption and indirectly it reduces
our own carbon footprint.

22. Reference
 Feed in Tariff and Renewable Energy Fund in Brief, Parliament of
Malaysia. Oct 2013
 www.seda.com.my
 Feed-In Tariffs – Boosting Energy for our Future: A Guide to one of
the world’s best environmental policies. World Future Council.

23. Thank you!