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IPPs and utilities should give to RE Fund

PUTRAJAYA: Independent power producers (IPPs) and utility companies should contribute to the Renewable Energy (RE) Fund, a government authority said.

“It would be good to have IPPs and utility companies set aside a percentage of their profits to contribute to the RE Fund,” said Sustainable Energy Development Authority (Seda) chief operating officer Ali Askar Sher Mohamed.

Seda, a government agency under the Energy, Green Technology and Water Ministry, is a one-stop centre that facilitates supply and use of RE in Malaysia. 

When it comes to allocation of RE quota, Ali said Seda is restricted by the amount in the kitty called the RE Fund. “If the fund is higher, the quota can be increased and more RE can be generated,” he told reporters at Malakoff Corp Bhd’s seminar on RE and feed-in tariff (FiT) here yesterday. 

The FiT essentially guarantees RE producers a premium selling price over that generated from depleting and finite sources such as oil, gas and coal.  Power generated from sustainable sources that will benefit from FiT includes that of oil palm biomass, biogas, small hydro and solar.

Also present at the seminar was Seda chief executive officer Badriyah Abdul Malek.

Currently, electricity consumers in Peninsular Malaysia who use more than 350kWh or whose monthly bills exceed RM77 pay an additional one per cent RE levy. Tenaga Nasional Bhd (TNB) started collecting this money since December 2011.

Sarawak is exempted from the RE levy because under the Renewable Energy Act 2010, the FiT is only applicable to Sabah and Peninsular Malaysia.

The one per cent levy was initially expected to rake in about RM300 million a year to facilitate the implementation of FiT. But the situation has changed.

The Sabah state government has appealed to the federal government not to collect the one per cent levy from consumers there as it had only recently raised electricity tariff. 

This means RE producers in Sabah cannot benefit from the FiT until the one per cent is collected by Sabah Electricity Sdn Bhd, a 70 per cent-subsidiary of TNB, from heavy power users in Sabah.

Furthermore, in the first two months of this year, Badriyah said Seda did not receive any money from TNB. She said TNB had justified that not all consumers pay their electricity bills on time and in full amount. TNB, however, had promised Seda that the first monthly payment is due on April 1 2012.

Since the RE levy collection is now narrowed down to heavy power users in Peninsula Malaysia and actual collection by TNB, Seda’s initial estimate of RM300 million a year will now have to be lowered. 

Badriyah said while waiting for the RE levy payment from TNB, Seda had started using a RM300 million grant from the government to kickstart the FiT.

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