Feed-in-tariff rush seen

Licences to be awarded on first-come, first-served basis

COME Dec 1, there will be a flurry of applications for feed-in-tariff (FiT), judging by the number of applications submitted during the three-day trial held early this month.

One reason for the rush is that once the applications are opened, the FiT will be awarded on first-come, first-served basis. Moreover, there will also be a quota system in place. The FiT also presents applicants with an investment opportunity as they will be rewarded with lucrative rates.

Sustainable Energy Development Authority Malaysia (Seda) had conducted the trial run of the e-FiT online system for the public from Nov 5 to 7. The three-day trial run gave a chance to the public to familiarise themselves with the system before its launch next month.

“Over the three-day gamma testing period, 192 users registered for the testing and 147 FiT applications were submitted by the users. Of the 147 FiT applications, 90% were for solar photovoltaic (PV) and the remaining 10% were spread between biomass, biogas and small hydro,” said Seda chairman Tan Sri Dr Fong Chan Onn at the launch of the authority's office by Energy, Green Technology and Water Minister Datuk Seri Peter Chin in Putrajaya yesterday.
Fielding questions: (from left) Badriyah, Fong and Chin at the launch of Seda’s office.

Before the trial run, Seda had conducted a five-session tutorial over two days where more than 200 people attended.

“The e-FiT online system will go live at the stroke of midnight on Dec 1. In bracing for the Dec 1, I understand there will be a team monitoring the e-FiT online system at Seda's office on the night of Nov 30. I also believe the CEO has ordered a freeflow of expresso so the team can stay vigilant on their night shift,” Fong quipped.

Under the RE Act 2010, individuals or non-individuals can sell electricity generated from renewable energy (RE) resources back to power utility firms at a fixed premium price for a specific time. The four renewal energy resources that are eligible for FiT are biogas, biomass, small hydropower and solar PV.

Malaysia has set a target for 2,080 MW or 11% of all electricity generated nationwide in 2020 to be sourced from environment-friendly RE. Currently, less than 1% of the total electricity is generated from RE versus the Government's target of 5.5% by 2015.

According to Seda, RE players will be required to submit the work plan for their RE installation and plant. Once approval is granted, Seda will closely monitor each RE installation and plant until commencement date is achieved. The close monitoring is to prevent the applicant from “sitting” on their allocated licence and quota.

If a delay occurs, a notice will be sent to the applicant asking for an explanation. If the RE player fails to respond satisfactorily, then the licence will be revoked. The fund and the allocated quota committed to the applicant will be released and returned to the system for other applicants.

Currently, the rate Tenaga Nasional Bhd (TNB) pays to renewable power producers is 21 sen per kWh. Concurrently, the average domestic rate that consumers pay to TNB is 27.6 sen per kWh.

With FiT, consumers can install their own renewable resources such as solar modules at home and will act as a secondary income for consumers.

Under the RE Act 2011, a small-scale solar PV producer, meaning a household, could potentially earn up to RM1.75 per kWh of electricity produced by selling the power to TNB.

Consumers who installed capacity up to and including 4 kWp (kilowatt peak) would be paid a FiT of RM1.23 per kWh. With the bonus criteria such as installation of solar PV in buildings or building structures, they will be paid an additional 26 sen on top of the RM1.23 per kWh.

Consumers who installed solar PV for use as building materials will get an additional 25 sen and they will also get another three sen for using locally manufactured or assembled solar PV modules.

Cypark Resources Bhd, MMC Corp Bhd, Fitters Diversified Bhd, Berjaya Corp Bhd and KUB Malaysia Bhd are among the listed companies that are producing RE or have expressed interest to venture into this area.

With just days to go before the system goes online, chief executive officer Badriyah Abdul Malek said Seda would be gearing up and preparing everything for the rush as applicants submitted their applications.

Technically, once an FiT application is accepted by the e-FiT online system, RE quota will be deducted from the system and allocated to the applicant.

Currently, the applicant is given seven days to submit both payment for their application fee (if applicable) and the (physical) declaration form.

Seda will manually vet all the online documents submitted by the applicant.

If the payment, declaration form and online documents are in order, then an FiT approval will be granted. At present, an applicant is issued a feed-in approval (FiA) certificate and the applicant is technically called a feed-in approval holder.

The timeframe between the acceptance of the FiT application and the issuance of the FiA certificate is 14 days, provided the documents submitted are in order.