Monday, October 18, 2010

Implementing the Feed-in-Tariff mechanism

source : The Star
Implementing the Feed-in-Tariff mechanism

KUALA LUMPUR: Although details are yet to be available, analysts speculate consumers may pay more for their electricity bills with the implementation of the feed-in-tariff mechanism under the Renewable Energy Act.

The Government announced that it will implement the Feed-in-Tariff mechanism under the Renewable Energy Act, to allow electricity generated from renewable energy by individuals and independent providers to be sold to electricity utility companies.

The Feed-in-Tariff forms part of the Act that is expected be tabled before the Parliament next month. It is part of the Government’s plan to boost renewable energy contribution to Malaysia’s electricity-generation mix from less than 1% in 2009 to around 5.5% by 2015 and to 11% of all electricity generated nationwide in 2020.

“The national utility would be obliged to buy renewable electricity at above-market rates set by the Government over a specific period of time from the day the system is connected to the grid,’’ an analyst said.

‘’The utility would be authorised to pass on this cost to all electricity consumers through their regular electricity bills.’’

OSK Research head Chris Eng said certainly, Tenaga Nasional Bhd (TNB) would not want to pay and the higher tariff would probably be passed on to the consumer. It would probably be cost-neutral to TNB as higher fees collected would be utilised by the national utility company to pay producers who uses renewable energy to produce electricity.

To a question, Eng said consumers may need to pay an additional 1% to 3% more for electricity.

Eng said the excess electricity produced by individuals who had solar panel installed in their homes would flow back into the TNB grid.

He said TNB may have to change the electric meter at individual houses going forward to facilitate such power generating capability.

Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said: “Once the act is passed, we will be setting up a new agency, Sustainable Energy Development Authority (SEDA), to oversee the implementation of renewable energy and then only we can make decision on the Feed-in-Tariff mechanism.”

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