Malaysia’s Ministry of Energy Transition and Water Transformation (‘
Ministry’) recently announced the implementation of several enhancements to the Corporate Renewable Energy Supply Scheme (‘
CRESS’).
1 These enhancements will take effect from
1 March 2025.
EXISTING CONSUMERS ELIGIBLE TO PARTICIPATE IN CRESS
Under the initial framework of CRESS which was announced in September 2024
2, consumers were only eligible to participate in CRESS if they were either new consumers or existing consumers seeking to increase their electricity supply load by 100MW. The Ministry now intends to open CRESS to all existing consumers.
This change will certainly be welcome news to existing consumers, particularly corporations looking to utilise green energy solutions and reduce their carbon footprint.
SYSTEM ACCESS CHARGE TO BE FIXED AT CURRENT RATES FOR THREE YEARS
The renewable energy developer participating in CRESS is required to pay a system access charge (‘
SAC’) to the Single Buyer in order to deliver electricity to the consumer. The purpose of the SAC is to recover the cost of the network infrastructure and other charges incurred during such delivery. Currently, the SAC is set at 25 sen/kWh for firm output and 45/kWh for non-firm output.
The Ministry has now announced that the SAC will be fixed at the current rates for the next three years. The rates will subsequently be reviewed every three years, in line with the regulatory period for the Incentive Based Regulation.
3 It is envisaged that this initiative will provide a certain amount of predictability of the costs involved, which should make participation in CRESS more attractive to potential investors.
CAPPING OF REVISION OF SYSTEM ACCESS CHARGE RATES
In addition to the SAC rates being fixed for a three-year period, the revision of such rates will be capped to a maximum of fifteen percent (15%). This gives potential investors better visibility on the long-term cost of participating in CRESS.
INCREASED ACCESSIBILITY TO GREEN ENERGY
The underlying concept of CRESS is to allow third party access to the grid, thus providing consumers the option to source electricity directly from different parties as well as drive the liberalisation of the electricity market. With the abovementioned enhancements to CRESS, consumers will enjoy increased accessibility to green energy and, ideally, competitive prices for the same. It is envisaged that these enhancements will generate more interest in CRESS and result in an uptick in participation.
For enquiries on CRESS, please contact Richard Khoo and Rachel Chiah, Partners of the Energy Practice of Skrine.