Current Status & Prospects of PV Power Generation in Malaysia

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1 Current Status & Prospects of PV Power Generation in Malaysia Ir. Ahmad Hadri Haris Malaysia Energy Centre (PTM) PVSEC th November 2009, Jeju Korea

2 Malaysia Population: 27 million (Malay, Chinese, Indian, others) Land size: 330,000 km2 Peninsular Malaysia Borneo: Sabah & Sarawak 2

3 Status of PV Power Generation Solar hybrid: 8 MW for rural electrification & island applications Solar grid-connected PV and BIPV: 1.5 MW urban applications 3

4 Solar Hybrid Systems 4

5 Grid-Connected PV and BIPV 5

6 Prospect of PV Power Generation 12,000 10,000 Solar PV Solid Waste Mini Hydro Cumulative RE Installed Capacity 2050: 11.5 GW (34%) 25.6 TWh (13%) PV: >8.8GW MW 8,000 6,000 Biogas Biomass 2020: 2,065 MW (10%) 11.2 TWh (9%) PV: 175MW 300MW 2030: 3,484 MW (13%) 16.5 TWh (10%) PV: 855MW 1.2GW 4, : 975 MW (6%) 5.4 TWh (5%) PV: 55MW 100MW 2, Year 6

7 Malaysia: Renewable Energy policy 8 th Malaysia Plan ( ) RE as the 5th fuel Implied 5% RE in energy mix 9 th Malaysia Plan ( ) 300 MW in Peninsular Malaysia 50 MW in Sabah 10 th Malaysia Plan ( ) & beyond New RE Policy & Action Plan 7

8 Strategic Thrusts of New RE Policy Conducive Business Environment RE Policy & Goals Human Capital Development Foundation: RE Law Advocacy Programme RE R&D Action Plan Thrust 1: RE Law Feed-in Tariff (FiT) & degression for each RE technology; RE Fund for the incremental cost of FiT & the Fund Manager; Responsibilities and obligations of power utilities and RE developers; FiT implementing agency for effective implementation. 8

9 Why FiT: Effectiveness Indicator FiTs are more effective and cost-efficient Historically observed efficiency of support for onshore wind: Effectiveness indicator compared to the expected profit for the year 2006 Source: European Commission (2008): The support of electricity from renewable sources 9

10 FiT Funding Mechanism (Incremental Cost) Cost Breakdown for Average Domestic Electricity Tariff Subsidized Fuel for Power Generation Generation Cost Transmission & Distribution Cost FiT Fee Customer Service Charge 19% 2% 14% 44% 21% 10

11 RE Fund for FiT: Mechanism Residential sector Commercial sector Industrial sector Electricity bills 100% Power Utilities {Revenue 98%} {RE Fund 2%} {(FiT displaced cost) +fee} RE Fund Manager FiT Implementing Agency {FiT payments} Solar BIPV buildings SREP developers 11

12 Determining FiT Rates Biomass Solid waste Solar PV Capex (investment cost) Loan: rates, period Fuel: requirement (250,000 t/yr), prices, transport charges Costs: O&M, depreciation, insurance Revenue: FiT rates, duration (16 yrs), capacity factor (70%), other revenue Annual cost increment (3%): fuel, transport, O&M, insurance IRR, SPB, cash-flow Capex (investment cost) Loan: rates, period Fuel: requirement (1,000 t/day), prices, transport charges Costs: O&M, depreciation, insurance Revenue: FiT rates, duration (21 yrs), capacity factor (70%), other revenue (tipping fee, recycling) Annual cost increment (4%): fuel, transport, O&M, insurance IRR, SPB, cash-flow Capex (investment cost) Loan: rates, period Costs: O&M, depreciation, insurance Revenue: FiT rates, duration (21 yrs), capacity factor (13%) Annual cost increment (3%): O&M, insurance SPB, (IRR), cash-flow 12

13 FiT Rates & Contributions: Comparison FiT Rates RE Technologies Germany 2007 Italy 2009 Thailand 2008 Malaysia 2009/2010 Retail Electricity Tariff (average) 0.28 US$/kWh 0.24 US$/kWh 0.09 US$/kWh 0.08 US$/kWh (Subsidised) Solar PV 2.4 x retail 2.7 x retail 4.2* x retail 4.8 x retail; 6%fl Wind 0.4 x retail 1.7 x retail 1.8 x retail 0.9 x retail; 1%fl Biomas 0.5 x retail 1.2 x retail 1.1 x retail 1.0 x retail; 0.2%fl Biogas 0.4 x retail 1.0 x retail 1.1 x retail 1.0 x retail; 0.2%fl Mini-hydro 0.5 x retail 1.2 x retail 1.1 x retail 0.7 x retail; 0%fl Cost to consumers (% of retail tariff) 4.8% 7.3% Yes 2% (proposed) Source: BMU, GSE, ERCT 13

14 RE Fund vs FiT: Positive Cash-Flow Year Average Retail Electricity Tariff sen/kwh sen/kwh sen/kwh sen/kwh sen/kwh sen/kwh sen/kwh sen/kwh sen/kwh sen/kwh Annual Electricity Sales (TNB) TOTAL RM 27 Billion RM 31 Billion RM 106 Billion RM 124 Billion RM 144 Billion RM 162 Billion RM 176 Billion RM 185 Billion RM 194 Billion RM 204 Billion Annual 2% Contribution Fee Cumulative Size of RE Fund Cumulative FiT Cost (less Displaced Electricity Cost, borne by TNB) Annual RE Fund Balance (less FiT Cost & Fees) RM 0 RM 0 RM 0 RM 0 RM 594 million RM 750 million RM 965 million RM 1.2 RM 1.7 RM 594 million RM 3.3 RM 7.6 RM 13.2 RM 20.7 RM 0 - RM 0 - RM 0 - RM 0 - RM 20.7 RM 163 million RM 2 RM 6.9 RM 12.3 RM 16.1 RM 18.2 RM 19.2 RM 19.6 RM 19.7 RM 19.7 RM 423 million RM 1.2 RM 350 million RM 230 million RM 3.8 RM 1.6 RM 536 million RM 121 million RM 43 million N/a 14

15 Installation Procedures & Quality Standard 15

16 Competency Training ISPQ accredited training 10 days: theory, practical, exam 16

17 Quality Control Centres UTM: inverter; IKRAM: mounting structure 17

18 Approved PV Service Providers: Ratings 18

19 PV Performance Monitoring 19

20 PV Performance Data Energy yield (Malaysia): kwh/kwp/year 20

21 System Prices Data (GCPV) Unit Cost Grid Connected PV System [RM/kWp] 40,000 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 Unit Cost of Grid Connected PV System in Malaysia 31,410 31,410 31,096 30,782 30,154 (Baseline) 30,593 29,525 29,167 29,230 28,583 27,641 26,942 26,876 26,044 26,139 25,720 25,518 24,970 23,191 22,182 Target Actual Lowest RM/kWp Highest RM/kWp 26,384 25,128 (Target) 20,000 Dec 05 Jun 06 Dec 06 June 07 Dec 07 Jun 08 Month-Year Dec 08 Jun 09 Dec 09 Jun 10 Systems: 3 kwp 92 kwp 30/6/09: RM25/Wp 21

22 22

23 GCPV & BIPV Installations 23

24 Information, Resources & Quality Assurance 24

25 Media Relations 25

26 Malaysia values PVPS Exchange of knowledge & lessons learned Accelerate learning process & minimise mistake Network & Friendship! 26

27 Thank you MBIPV Project Pusat Tenaga Malaysia No.2 Jalan 9/10, Persiaran Usahawan, Seksyen Bandar Baru Bangi, Malaysia P: F: E: infopv@mbipv.net.my 27