Delays on signing of power purchase agreements for feed-in tariff (FiT) resolved

• TNB senior management can now sign REPPAs; previously only the CEO could do so
• Solar PV overshadowing other renewable sources

Sustainable Energy Development Authority (SEDA) Malaysia has allayed market concerns over delays in the signing of the Renewable Energy Power Purchase Agreements (REPPAs) between successful feed-in tariff (FiT) applicants and Malaysia’s power utility company, Tenaga Nasional Berhad (TNB). 

SEDA Malaysia chief executive officer Badriyah Abdul Malek says the delays were caused by two issues: firstly, each applicant has unique circumstances, and there was considerable due process to follow; and secondly, TNB itself needed to change its approval process to empower its management staff with the authority to sign REPPAs. 

SEDA Malaysia, in a statement to Green Prospects Asia, says TNB will soon be able to comply with the time frame to ink REPPAs – four weeks for installations of less than 1 MW and eight weeks for larger installations, having delegated signatory powers to its senior management.

Prior to this, only TNB’s chief executive officer (CEO) could sign a REPPA. Now, however, the vice-president for distribution and senior general manager for customer service are also empowered to do so.

Delays by TNB in signing REPPAs was one of the issues raised at the Malakoff Community Partnerships 4th Energy Expert series last month. Badriyah was the expert speaker at the event. She spoke candidly about how her team frantically finalised the technical regulations for FiT even as the deadline loomed, how the authority miscalculated the popularity of solar photovoltaic (PV), and how it was still trying to manage emerging issues.

Malaysia launched the FiT in December 2011 as an incentive for the generation of renewable energy. It aims to have a renewable energy mix of 5.5% by 2015.

Changes in SEDA Malaysia’s FiT application processes are expected to facilitate stronger uptake of quotas for renewable sources besides solar PV (photo credit: GPA Photo)

Response to the FiT was overwhelming for solar PV. Badriyah shared with the audience that she had spoken to the minister in charge of energy about how solar PV should not overshadow the other three sources, notably biomass. Other renewable energy sources allowed for FiT are biogas and small hydro. 

Badriyah is also concerned that the FiT for solar is too lucrative, given the global drop in solar PV prices. She says the government may need to review solar PV’s degression rate. 

When asked why the uptake for small hydro was slow, Badriyah says federal-state jurisdictional issues still need to be ironed out. Quotas for solar PV (industry category) up to 2014 have been fully subscribed, while the quota for small hydro is still available for the first half of 2012. Badriyah says water comes under state authority, and at its worst, state bureaucratic red tape could require up to 33 signatures from different agencies before the applicant has the documentation to proceed. 

To speed up this process, SEDA Malaysia will engage state and local authorities through dialogues on renewable energy and FiT. Badriyah says by facilitating renewable energy projects, state governments will both earn revenue and create jobs. A workshop on small hydro is planned this year so state-level decision makers understand better the impact of small hydro power on water resources and the environment, and are able to make informed decisions.

One of the biggest stumbling blocks right now is in the e-FiT application process. Many applicants, in their haste to book limited quotas, make mistakes filling up the forms on the e-FiT system. Ali Askar, SEDA Malaysia chief operating officer, says the authority has been lenient in allowing changes to applications after submission, but that process was time-consuming and costly. SEDA Malaysia is redesigning the e-FiT system to allow applicants to make changes both during the application and after submission.

Apart from these bumps, SEDA Malaysia is also inundated by requests for net metering from homeowners who were unsuccessful in securing the FiT. It is learnt SEDA Malaysia is in talks with TNB regarding net metering facilities where excess energy from PV generation can be exported to TNB and used to offset the energy bought from TNB.