Sabah RE producers set to enjoy FiT rates soon

KUALA LUMPUR: RENEWABLE energy (RE) producers in Sabah, mostly biomass and biogas plant operators at palm oil mills, may soon be able to subscribe to the feed-in tariff (FiT).

Unlike in Peninsular Malaysia, RE producers in Sabah have not been able to enjoy the deserving rate of 32 sen per kilowatt per hour (kWh) under the FiT. They, instead, have to contend with Tenaga Nasional Bhd (TNB)'s Small Renewable Energy Projects rate of 21 sen per kWh.

This is because under the law, RE producers in Sabah will only be eligible for FiT when the one per cent RE levy is collected by Sabah Electricity Sdn Bhd, a 70 per cent subsidiary of TNB, from heavy power users in Sabah.

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 benefits from FiT includes that of oil palm biomass, biogas, small hydro power and solar.

Since December 2011, heavy power users in Peninsular Malaysia using more than 350kWh or whose monthly bills exceed RM77, have been paying the one per cent RE levy to TNB.

The Sabah government, however, had appealed against collection of RE levy, saying it would be too taxing on heavy power users there.

Now that it has been over a year, the federal government indicated that the Sabah government seemed to have come around.

When met yesterday, Energy, Green Technology and Water Ministry secretary general Datuk Loo Took Gee said "the Sabah government has verbally agreed. We met up this week."

She was speaking to reporters after representing Energy, Green Technology and Water Minister Datuk Seri Peter Chin in officiating at the launch of the Eco-B workshop organised by Malaysia Green Building Confederation.

Asked when Sabah Chief Minister Datuk Seri Musa Aman will sign on and allow TNB to collect RE levy from heavy power users in Sabah, Loo replied: "We'll have to wait for the official letter from the Sabah state government".