Malaysia’s 2011 Proposed Solar, Biomass, Biogas, & Hydro Tariffs

In a presentation on July 29th, 2010, Ahmad Hadri Haris, the chief technical advisor to Malaysia’s Minister of Energy, announced proposed feed-in tariffs for solar photovoltaics (PV), biomass, biogas, and minihydro.

Haris’ Industry Briefing on Feed-in Tariff Procedures revealed as sophisticated a program as found anywhere in the world.

Progress on implementing feed-in tariffs in Malaysia has continued at a steady pace. In April, Malaysia’s cabinet approved the introduction of the Renewable Energy Act and the Act for a Feed-in Tariff Implementing Agency which will then be passed to parliament.

On June 10, 2010, the government announced the National Renewable Energy Policy and Action Plan with a goal of increasing renewable energy from 1% to 5.5% of electricity supply by 2015.

Parliament will begin debate on the Renewable Energy Act and the Act for a Feed-in Tariff Implementing Agency in October of this year with the expectation that the program passed into law and launched by the second quarter of 2011.

The legislation will establish the Sustainable Energy Development Authority (SEDA) which will manage the feed-in tariff program.

The new detailed tariffs announced by Haris did not include tariffs for wind or geothermal, two technologies previously included in the proposed program. No explanation was given why they were not included.

The Malaysian program includes some aspects unique to the country. Majority of equity in the project must not be owned by an electric utility or a foreign entity.

Malaysia’s proposal also seems designed to avoid several of the problems encountered with solar PV in Spain, including annual technology caps, and project registration.

The current proposal limits the program to 219 MW in 2011, increasing to nearly 1,000 MW in 2015. The bulk of the new generating capacity to be installed under the program is set aside for biomass and minihydro.

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