Seda wants Sabah to chip in

PUTRAJAYA: SUSTAINABLE Energy Development Authority (Seda) is persuading the Sabah government to contribute to the Renewable Energy (RE) Fund as heavy power users in the state are not contributing to the fund.

"We're in talks with the Sabah Government to contribute to the RE Fund. We cannot always expect heavy power users in Peninsular Malaysia to pay for the Feed-in Tariff (FiT) benefits enjoyed by eligible green power producers in Sabah," said Seda chief executive officer Badriyah Abdul Malek.

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

Currently, electricity consumers in Peninsular Malaysia, who use more than 350 kilowatt per hour (kWh) or whose monthly bills exceed RM77, pay an additional one per cent RE levy. Manufacturers, which make up more than 40 per cent of TNB's clientele, are the ones hit hardest by the RE levy. Tenaga Nasional Bhd (TNB) started collecting this money from 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.

"It would be justifiable for the Sabah Government to contribute to the RE Fund, following the suspension of FiT implementation there," she told Business Times in an interview.

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 include that of oil palm biomass, biogas, small hydro and solar.

In a separate interview, Energy, Green Technology and Water Minister Datuk Seri Peter Chin confirmed that not all oil palm biomass plant operators in Sabah get to enjoy the 32 sen per kWh under the FiT.

"Only five green power producers are eligible because they are already operating commercially, as of December 2011. Collectively, they generate 36.5MW. If we do not accord FiT to these five existing producers, Sabah will face critical power shortage," he said.

Among the five green power producers in Sabah eligible for FiT are TSH Bio-Energy Sdn Bhd (in Tawau), Kinabio Power Sdn Bhd and Seguntor Power (in Sandakan). There is also Esajadi Power Sdn Bhd which operates two mini-hydropower plants along two rivers at Kota Belud and Kota Marudu.

When asked to confirm that other biomass and biogas plant operators in Sabah are not eligible for FiT, Chin nodded solemnly. "If other green power producers in Sabah still want to hook up to the national grid, they will only be paid the rates accorded under TNB's Small Renewable Energy Projects," he said.

This means aspiring oil palm biomass plant operators there will have to contend with 21 sen per kWh instead of the promised 32 sen per kWh under FiT.

"This is a politically sensitive decision. Sabah and Labuan had just experienced a 15 per cent tariff hike to 29.25 sen per kWh, in July 2011. The Sabah government appealed for a delay in RE Fund collection as it would be too taxing on consumers there," Chin explained.

Seda had started to use a RM300 million government grant to kickstart the FiT. Asked if the five green power producers in Sabah received payment under the FiT rates, Badriyah replied, "they have not signed the renewable energy power purchase agreements (Reppas)". 

"We can only make FiT payments to eligible green power producers who have successfully bid for the quotas via the Internet, signed the Reppas and already commercially operating their plants as of December 2011," she said.

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