Renewable energy levy on heavy power users

KUALA LUMPUR: Consumers in Peninsular Malaysia and Sabah,whose monthly electricity bills exceed RM77, will pay an additional one per cent levy to subsidise renewable energy producers, starting September.

Initially, it was thought that consumers would only have to start paying the levy from January next year.

“Those who use more than 300 kilowatt hours or whose monthly bill is more than RM77 will be considered heavy energy users and will be levied,” said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui.

He said the Sustainable Energy Development Authority was tasked with collecting the renewable energy (RE) levy. It will also oversee the implementation of feed-in tariffs (FiT).

Chin said FiT essentially guaranteed green power 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 include that of hydro, solar, biomass and biogas.

The minister said Sarawak was exempted from the RE levy because the state had its own electricity supply laws. The Renewable Energy Act 2010 refers to the Electricity Supply Act under the purview of the Federal Government. “Consumers in Sarawak are not affected because the Renewable Energy Act’s FiT are only applicable to Sabah and Peninsular Malaysia. Also, RE producers using biomass and hydro in Sarawak do not benefit from FiT.”

Since last Saturday, electricity rates in Sabah and Labuan have gone up by 15 per cent. This follows the June 1 electricity and gas tariff hikes nationwide.

Manufacturers, who make up more than 40 per cent of TNB’s clientele, are likely be hit hard by the RE levy.

Chin acknowledged that the largest contributor to the levy would be the industrial sector. “We’ve conducted dialogues with heavy power users, like manufacturers and shopping mall owners. Although some have expressed reservations, they have generally accepted this eventuality. We’re going to apply the Renewable Energy Act. If we renege on it, the renewable energy producers can sue the government.”

“Tenaga Nasional Bhd should be able to collect RM300 million per year on behalf of the government to fund these green power producers,” he said after officiating at a power generation and distribution event here yesterday.

Chin said the RE levy collected that is not used this year would be carried forward to next year. “It all depends on the amount we can collect, which will be disbursed. We don’t want to keep the money.”

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