Govt looks at additional 1% levy for renewable energy

PETALING JAYA: An additional 1% levy to cover cost associated with the feed-in tariff (FiT) scheme for renewable energy (RE) will be suggested next year on top of the 1% levy to be implemented from Sept 1, says Energy, Green Technology and Water Ministry (KeTTHA) deputy secretary-general Badaruddin Mahyuddin.

“The 1% levy on consumers using above 300kWh (kilowatt-hour) per month starting Sept 1 is for the RE fund.

“Another 1% will be suggested to be a levy on the same group of consumers to help funding for solar energy next year,” Badaruddin said when contacted yesterday.

On Tuesday, Badaruddin said the ministry had proposed to the Cabinet the introduction of another 1% levy for solar power generation. However, he said KeTTHA would have to “go back to the Cabinet next year” to present the additional 1% levy as it was not on an automatically approved basis.

The Government had earlier announced an average electricity tariff hike by 7.12% from June. The increase comprised a 5.12% hike to reflect the upward revision of natural gas price to the power sector, and a 2% rise in base tariff for Tenaga Nasional Bhd to partly recover from the higher of cost of power supply since June 2006.

Badaruddin said households consuming 200kWh or less a month would not be affected by the RE levy. In total, 4.4 million households or 75% of Malaysians will not be affected.

Asked if the levy of 1% to be implemented in Sept 1 was part of the 7.12% hike or an additional 1% on top of the hike, Badaruddin said: “Yes, the 1% for RE fund will be additional, to be levied on consumers using 301kWh and above per month, come Sept 1.”

“The tariff increase is 7.12%, the 1% is considered as a levy to help boost our country's RE programme,” he said.

Badaruddin said the ministry was currently working for the Sustainable Energy Development Authority (Seda) to be set up so that the governing body could implement RE measures by Sept 1.

Seda will be responsible to manage the FiT mechanism for RE in the country as well as to award licences to renewable energy players for the production of RE.

Badaruddin said although the Government had announced a tariff hike recently, the 1% levy for RE had not been incorporated into consumers' bills.

“Seda will only get the 1% levy from September. However, to kickstart the RE, the Government will allocate RM189mil to finance the higher rates that TNB will be paying for RE,” he said.