Keen interest in clean energy

Posted on December 3, 2011. Filed under: Energy |

-The Star-

EVEN before the ink on the Renewable Energy Act 2011 dried, companies have already made a beeline towards providing clean energy to the national power grid.

Leading the pack is Cypark Resources Bhd. Listed on Bursa Malaysia in October 2010, it is a specialist in landfills and its job mainly revolves around the rehabilitation of old polluting dumping grounds.

Pola Singh: ‘ We should win over these consumers by turning them into green consumers.’

Another interesting aspect of its work was that it uses the vast open space of the landfill to generate power. It harvests the biogas that is emitted from the biodegrading material in the landfill and it has put in place an array of solar panels on the top of the landfill to generate electricity.

The company aims to generate, in three years, between 30MW and 50MW of power from three sources – solar, biogas and biomass – and its first solar park, measuring 12.14ha, will be in Pajam, Negri Sembilan.

Besides its Pajam project, Cypark has access to 17 landfill more sites in Negri Sembilan, Johor, Pahang, Terengganu and Perlis which may eventually be converted into renewable energy (RE) parks.

AWC Bhd also announce that it expects its 1MW capacity solar farm to start operations by the first quarter of 2012, saying that it is still finalising its agreement with a state government agency.

Berjaya Corp Bhd has also submitted a proposal to the Government to build a 100MW solar power plant in Bukit Tagar, Selangor. Teaming up with South Korean partner Posco Engineering & Construction Co Ltd, the project is projected to cost RM800mil to RM1bil.

However, only 50MW is allocated for 2011/2012 while 100MW quota will be made available in 2013 and 2014. It remains to be seen how these companies will compete to get a slice of this lucrative business given the limited quota for solar power.

The rush for solar energy stems from the higher price it fetches and there is zero issue on feedstock compared with biogas or biomass. Tenaga Nasional Bhd (TNB) will pay up to RM1.40 per kWh of energy produced from solar farms it buys from. Due to the overwhelming response to solar PV, the FiT (Feed-in tariff) applications for solar PV are limited to a maximum 5 MWp rated capacity.

First Solar Malaysia senior director of public affairs for Asia-Pacific Ahmad Hadri Haris says there is tremendous potential for RE in Malaysia, in particular from solar, biomass, biogas and hydro.

“Earlier studies conducted by the Malaysia Building Integrated Photovoltaic Project in 2009 identified a market potential of 3GW by 2020 and can it can grow to 7GW by 2030. In reality more MW from RE can be derived provided the market conditions are conducive and supportive,” he says.

He says there are other RE potential sources of energy such as wind and geothermal but this may need to be further assessed to find the suitability of applications.

“The solar potential can come from buildings and rooftops. Thus, there is no need for land use and this method can also improve the delivery of electricity to the urban areas.

“For biomass or biogas, most of the feedstock would come from the palm oil industry. But the resource can also come from other agriculture, wood and waste treatment industries which have not been considered until now,” he says.

Before the FiT system, the rate TNB pays to renewable power producers is 21 sen per kWh, while the average domestic rate that consumers pay to TNB is 27.6 sen per kWh.

Sime Darby Bhd and Felda Global Group have also joined the biomass and biogas to energy bandwagon.

Felda Global is a leader in RE projects with 56 biogas plants, two power plants, six compost plants, two mini gasifier plants and one fuel pellet plant all utilising biomass waste and palm oil mill effluent as feedstock.

Sime and Felda are also in the final stages of discussions with a special-purpose vehicle, Mybiomass Sdn Bhd that will facilitate a sustainable supply of biomass through co-ordinated collection and aggregation for the use in the downstream biotechnology industry.

Fitters Diversified Bhd is also venturing into the RE business to diversify its earnings stream.

It has leased a palm oil mill in Kedah to process empty fresh fruit bunches from oil palm trees and wastes from palm oil mills, converting them into dried long fibres. It will also produce biofuel pellets from dried short fibres and palm kernel shell.

Biomass boiler manufacturer Boilermech Holdings Bhd stands to benefit from its exposure to the RE sector in Malaysia, coupled with growing demand for boilers in Indonesia, Sri Lanka, Thailand and the Solomon Islands.

As a 35% associate company of food and agriculture group QL Resources Bhd, Boilermech has been supplying boilers to QL’s marine product and palm oil divisions. It also services Wilmar International Ltd and Sime.

According to the Sustainable Energy Development Authority (Seda), RE players will be required to submit the work plan of their RE installation and plant. Once approval is granted, Seda will closely monitor each RE installation and plant until the commencement date. The monitoring is to prevent the applicant from “sitting” on their allocated licence and quota.

A notice will be sent to the applicant for an explanation in the event of delay. If the RE player failed to explain satisfactorily, the licence would be revoked. The fund and the allocated quota committed to the applicant would be released and returned to the system for other applicants.

Funding for the FiT scheme is not an issue as consumers would pay a 1% levy to cover the costs associated with the FiT scheme. It has also received a soft loan of RM300mil to kick-start its operations.

“Malaysia is unique in the sense that this is the first time that the Government does not have to fork out any money or provide subsidies for this project to take off. The key contributors will be the electricity consumers,” says Seda board member Pola Singh.

He says electricity consumers are key to the success of the RE business. “Their understanding is very important. This heightening of the awareness of the paying public’ should be given due emphasis. Without their contribution, the RE industry wouldn’t be possible. We should win over these consumers by turning them into green’ consumers,” he says.

The question now is how the authorities would implement the RE strategies taking into account some companies who are eager to make a quick buck by riding on the country’s vision to go green.

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