SEDA Malaysia announced new degression and bonus rates for Biomass, Biogas and Solar PV

During the 2nd International Sustainable Energy Summit (ISES) 2014 last week, SEDA Malaysia was expected to announce the renewable energy (RE) quota for this year.

It was deferred, but there was an equally interesting announcement, which touches on the new rates of bonus and degression for three RE sources - Biomass, Biogas and Solar PV. This is to encourage take-up rate of biomass and biogas which has seen slow response.


Table1: Biogas and Biomass, effective January 1, 2014



Table 2: Solar PV effective March 15, 2014



Key changes: Biomass and Biogas

• Degression rates for both biomass and biogas have been reduced from 0.5% to 0%
• Increase of bonus rate for use of locally manufactured or assembled gas engine technology (biogas) and use of locally manufactured or assembled boiler or gasifier (biomass) from RM0.01 per kWh to RM0.05 per kWh for both technologies. 

Note: These new degression and bonus rates are effective from 1st January 2014.


Key changes: Solar Photovoltaic (PV)

• Degression rates adjusted to 10% across the entire Schedule, except for the bonus criteria of locally manufactured or assembled solar PV modules and solar inverters. 
• For the two bonus criteria, degression rates are retained at 0% and their bonus rates adjusted from RM0.03 per kWh (solar PV modules) and RM0.01 per kWh (solar inverters) to RM0.05 per kWh for each of them. 

Note: The new degression and bonus rates for solar PV are effective from 15th March 2014.


For complete reading of the press release, visit here.

2014 FiT quota release announcement delayed

This is one conference I've really wanted to attend. Unfortunately the dates clashed with another pertinent event in Kuala Lumpur, the Asia Water 2014 Conference which is currently ongoing - 19th to 21st March 2014.


The Deputy Minister of KeTTHA and SEDA officials at the 2^nd International Sustainable Energy Summit 2014 in Petaling Jaya.


Earlier this month, SEDA Malaysia announced in its portal that the new quota for its Feed-in Tariff (FiT) for 2014 would be announced during the 2nd International Sustainable Energy Summit, held in Petaling Jaya Selangor few days ago.


Delayed to refine FiT proposal

The announcement of the 2014 quota for its FiT programme for renewable energy would now be expected to be in April, at the earliest. Energy, Green Technology and Water ministry said this is to make some administrative adjustments.

The Malaysian Reserve reported that  a government official said the release of quotas for 12kW and below may be made as early as April but for larger projects exceeding 12kW, these may now be included in the 2015 quota. One reason why quotas for larger projects may be delayed is the amount of time it will take for some amendments to the Renewable Energy (RE) Act 2011 to be gazetted.

New legislation is needed because the threshold defining larger commercial non-individual photovoltaic (PV) projects has been brought down from 72kW to 12kW. These larger projects would need to go through a power system connectivity check by Tenaga Nasional Bhd, that would take at least 6 weeks, which can only be started once the legislation is gazetted.

Solar PV installations under 12kW do not need to undergo the connectivity test.

Some of the amendments proposed for Renewable Energy Acts 2011 are:

• sections that involved the terms and operational requirements
• FiT approval and FiT rates
• recovery of money
• redefining large commercial solar PV projects to include those beyond 12kW
• regulating the solar PV service providers
• inclusion of geothermal sources as a new RE source in the FiT programme

The Green Mechanics' two cents:

Since gazetted in 2011, the Renewable Energy Act has been revised almost annually to accommodate changing needs of the industry, which is good as we are only at an early stage of the implementation of green technology projects.

With the delay in announcement, it is fair to request that this year's roll-out be spread or extended to 2015 to give individuals and non-individual commercial holders of FiT approval sufficient time to complete their projects.

Energy Ministry to help rural community produce Biomass Products

If what the Ministry of Energy, Green Technology and Water stated yesterday is to become reality, smallholders and farmers in this country will have better opportunity to take part in green and renewable energy projects - in a small way.

In a statement, the ministry said it will provide the rural community comprising smallholders, landowners and farmers with guidance and advice on using green technology to develop high-value products from biomass, including energy.


Rice farmers and palm oil smallholders can become suppliers to the biomass industry.


Rural Community Gets Helping Hands
Bernama, Oct 18.

The Ministry of Energy, Green Technology and Water will help the rural community to promote sustainable developments and facilitate the green economy by showing how it can contribute to economic growth.

With huge amount of talent and resources, coupled with their hardworking traits, the rural communities just need transformation in their mindset i.e., to be more entrepreneurial bent, and organise themselves accordingly to capitalise on new opportunities.

This year, Prime Minister Najib announced an allocation increase of RM2 billion, for the Green Technology Financing Scheme (GTFS), which makes the total allocation now to RM3.5 billion.

This is meant as an incentive to small and medium industries and enterprises (SMI & SMEs) to increase the creation of green tech-based products and services.

He also said the government launched the 1Malaysia Biomass Alternative Strategy Initiative (1MBAS) last year to benefit Malaysians, especially smallholders and farmers..


"We have target the production of 800 MW of renewable energy by 2020. This requires 6-9 million tonnes of biomass (and) this amount would translate into about RM9 billion in Gross national Income (GNI).
- Deputy Minister Mahdzir Khalid, Malaysia Ministry of Energy, Green Technology and Water


The ministry reckon that the implementation of the National Biomass Strategy is expected to create up to 66,000 new jobs by 2020, a variety of skills, from manual labor to areas of research and development and engineering.

Of this, the biomass pellet industry alone is expected to contribute 12,300 direct and indirect jobs.


TheGreenMechanics: This would directly benefit the large number of palm oil smallholders in Sabah. Great opportunity!

US firm to invest in Renewable Energy sector in POIC Lahad Datu, Sabah

If they benefit the people and at the same time save the environment from being further damaged, efforts to bring in investments into the state should be encouraged.

In fact, we should always be on the lookout for opportunities such as one that's created by POIC Sabah Sdn Bhd (Palm oil industrial cluster).

Yesterday, POIC Sabah Sdn signed a memorandum of understanding with Evolution Energy LLC of the United States that could translate into a RM500 million (about US$156 mil) investment to produce gasoline, diesel, aviation fuel and clean burning coal from oil palm fronds and trunks by  2015.


POIC is located in Lahad Datu in the east coast of Sabah.


RM500 million investment to produce gasoline, diesel, aviation fuel and clean burning coal

MOU worth RM500 million was signed between POIC Sabah and Evolution Energy, whereby Evolution Energy is expected to acquire some 50 hectares of land at POIC Lahad Datu for 5 plants -- three for the production of liquid biofuels and two for manufacturing the environment-friendly Nucoal, a solid biofuel. These plants are estimated to require up to one million tonnes of biomass, mainly fronds and trunks, annually.

Though fronds and trunks are targeted as the main raw materials, it said the facilities were designed to also process empty fruit bunches (EFB - from palm oil mills) and wood wastes from the state's timber industry.

Evolution Energy's entry into Sabah came in the wake of the launch last June of the Biomass Joint-Venture (JV) Cluster concept of aggregating EFB from most of the 130 palm oil mills across Sabah.

From its 1.4 million hectares of oil palm plantations, Sabah produces about 26 million tonnes of oil palm biomass comprising fronds, trunks, EFB, palm kernel shells and mesocarp fibres.


Getting around the 'biomass supply' issue

Failure in earlier attempts at securing long-term biomass supply had kept investors at bay. The JV Cluster approach circumvents issues of pricing and supply tenure by bringing in the biomass owners whose capital injections into the proposed downstream JV companies will be in the form of biomass.

Evolution Energy is based in North Carolina, US. According to its official handout, 'it pioneers new and innovative energy technologies that address the growing global demand for green power producing facilities'.

One of its businesses is the manufacturing of Nucoal, a coal substitute made from biomass that does not threaten the environment.

Source

Mill wastes used to generate renewable energy: Sarawak

According to Sarawak Timber Industry Development Corp (STIDC), major plywood mills in Sarawak are increasingly using wood residues to generate energy for their operations.

That's cool!



There are now 14 biomass plants in Sarawak, which supplied energy for use in the mills. In fact, major timber groups such as Shin Yang, Samling, Rimbunan Hijau, Ta Ann Holdings and KTS all owned biomass plants. Last year the volume of wood residues consumed by these biomass plants was about 1.1 million tonnes. - Sourced The StarBiz.

One of Sarawak's major timber mills - Rimbunan Hujau. Photo: arctracer

Ample supply for biomass fuel

Besides using their own wood residues, some of the mills also sourced wood wastes from smaller mills and other wood processing factories to feed their biomass plants. STIDC figures show that there are 45 plywood mills, 171 sawmills, 21 veneer mills and 34 dowel/moulding mills in Sarawak.

Using wood residues to generate electricity was one effective way to manage wastes so that it will not cause harm to the environment. In the early years in Sabah and Sarawak, wood residues were not utilised economically with much disposed of through open burning, burning in incinerators or dumped into the river causing pollution and other environmental problems.


Generating capacity

KTS group deputy MD, Mr. Lau said an average plywood mill with a monthly output of between 7,000 m3 and 8,000 m3 can generate wood residues to produce between 3MW and 5MW of electricity.

A biomass plant with 3MW capacity will cost between RM10mil and RM15mil to build while the capital investment in a 5MW power plant is between RM20mil and RM30mil. The amount of electricity a biomass plant can generate will depend on the type of technology used.

Lau pointed out that biomass plants were not cheap in terms of maintenance whereby plywood mills with their own biomass plants would still have to pay Syarikat SESCO Bhd, which is owned by Sarawak Energy Bhd for standby electricity based on minimum and maximum demand.


Payback period

Although the one-off capital investment in a biomass plants is huge, the long-term economic returns from energy savings would be substantial if plywood mills had to purchase power from the state grid.

A plywood mill manager said his mill could save between RM400,000 and RM500,000 a month in electricity bill by having its own biomass plant. As such, simple payback period for a 3MW plant is between 2 to 3 years.

That is pretty fast if you ask me.