Malaysia’s Ministry of Energy and Natural Resources (‘
KETSA’), together with the Sustainable Energy Development Authority (‘
SEDA’) as the implementing agency, have announced a new 187MW quota for the nation’s Feed-In Tariff programme
1. The said 187MW quota comprises the following:
These new Feed-In Tariff projects are expected to commence generation between 2025 and 2027.
Introduced as part of the 10
th Malaysia Plan and pursuant to the Renewable Energy Act 2011, the Feed-In Tariff programme is designed for the development of small power production projects (30MW and below) utilising renewable energy (‘
RE’) resources
2. Distribution licensees are then obliged to purchase electricity from feed-in approval holders at a stipulated, favourable tariff rate for a specific duration. The Feed-In Tariff programme is ultimately aimed at achieving grid parity, as well as encouraging the participation of local players in the RE industry in Malaysia. Since its inception, it has been proven to be an effective contributor towards the development and use of RE in Malaysia, with a total quota of 1,440MW involving 10,485 RE projects having been approved. The launch of the new 187MW Feed-In Tariff quota is therefore no surprise, given the nation’s ambitious target of achieving 31% renewable energy installed capacity by year 2025.
Aside from its role in the achievement of Malaysia’s RE targets, KETSA has stated that this new Feed-In Tariff quota is projected to generate investments amounting to RM1.8 billion as well as create at least 550 job opportunities in the RE industry. This forms part of the Malaysian Government’s efforts to revive the growth of the nation’s economy in the aftermath of the COVID-19 pandemic.
Parties interested in obtaining a Feed-In Tariff quota must submit their bids online via SEDA’s online portal. Bidding for small hydropower resources will open on 2 August 2022 whereas bidding for biogas and biomass resources will open on 9 August 2022.
Alert by Rachel Chiah (Senior Associate) of the Projects and Infrastructure practice of Skrine.
1 The full text of KETSA’s announcement is available
here.
2 Note that the renewable resources that may be utilised for the Feed-In Tariff programme are small hydropower, biogas, and biomass. Previously, solar photovoltaic was allowed, but has been discontinued following the introduction of the Net Energy Metering programme for rooftop solar installations.