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Malaysia Adopts Sophisticated System of Feed-in Tariffs

Joining several other Asian countries, Malaysia's parliament has approved a sophisticated system of feed-in tariffs to develop its renewable energy resources.

 

On April 5th, Malaysia adopted a system of Advanced Renewable Tariffs and renewable energy targets differentiated by technology.

Malaysia joins Thailand and Taiwan in implementing such a policy. The Philippines has been delaying launch of a similar program for the past year. Japan has a much more limited program that only applies to solar photovoltaics (solar PV) and only pays for excess generation.

Ahmad Hadri Haris, the chief technical advisor to Malaysia's Minister of Energy, announced that the Dewan Rakyat (Malaysian House of Representatives) passed both the Renewable Energy Bill creating the feed-in tariff policy and the Bill for the Sustainable Energy Development Authority. Haris says that the legislation will be officially published in May and will likely go into effect in mid summer.

Like a growing list of countries that implement systems of Advanced Renewable Tariffs, such as Uganda, Malaysia's policy includes specific targets for each technology by year. For example, in 2011 Malaysia's quota for solar PV is 29 MW and in 2012 the target is an additional 46 MW. Approximately, one-third of the solar PV capacity is set aside for projects less than 1 MW in size.

In contrast to the Philippines, where its Renewable Energy Act was passed as early as 2008, Malaysia made steady progress from public consultation through passage of legislation, to expected implementation this summer.

By 2020, Malaysia expects to have installed more than 3,000 MW of new renewables of which about one-third (1,250 MW) will be from solar PV, and another one-third from biomass (1,065 MW).

Like sophisticated programs in Ontario, Canada, and Germany, Malaysia's feed-in tariffs are divided into multiple tranches. As in Ontario, solar PV is divided into six tranches, not including Malaysia's four separate bonus tranches for locally manufactured components.

 

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