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Visionary Projects in the future ‐
Energy and Security, what can we expect
Solar Photovoltaic & Way Forward for RE in Malaysia
Wei‐nee ChenTechnical AdvisorMBIPV Project
4th
October 2010ASEAN Conference on Energy 2010
Energy Security & Energy Autonomy
2
Achieve Energy Security
Establish Energy Autonomy
• Each country is blessed with indigenous supply of renewable energies
• The use of RE reduces reliance on import of fuel source
• Avoid cartel pricing of fuel source
• When a country achieves energy autonomy, the economy is more resilient against fluctuation of prices of foreign fuel source => truly sustainable economy
3
Visionary Projects in the future should be based on Renewable Energy
Resources…
Source: TNB
Importance of Renewable Energies
Source: International Energy Agency, Energy Technology Perspectives, 2008, www.iea.org 4
5
Why solar?
Solar yield in one year
*15,000 times the world energy consumption in a year
Over 4.5 billion years in operation => additional 4.5 billion years
Fossil resources are diminishing
* Solar Economy, Dr Hermann Scheer
coal oil uranium gas annual energy demand world wide
6
Electricity from PV: Technical Potential
Suitable building roof surfaces* >65 million m2 x 100 Wp/m2 = >6,500 MWp* 2.5 million houses (40%) + 40,000 commercial buildings (5%)
PV covering 0.6% (786 km2) land of Peninsular Malaysia can provide enough electricity supplied by TNB in 2007 (86.5 TWh)
7
PV Applications in Malaysia
PV (stand alone) applications started in early 1980s
Rural systems
Communication towers
Oil & gas
Consumer products
Off‐grid PV capacity (as at end of 2009) estimated 10 MWp
Rural electrification programme:
Coverage: 93% (2005) 95% (2010), 100% (2020)
99% Peninsular;
81% Sabah; Source: IBC Solar, Kerapak Spak Project, Sarawak, 2010
8
Grid Connected PV
Grid connected PV applications:1st system in August 1998: roof‐top 3.15 kWp
468 kWp between 1998 to 2004: 418 kWp by Government
32.5 kWp for R&D
17.5 kWp by private
Locations:Residential homes
Commercial building
Universities and school
9
Status Quo of PV in Malaysia
Grid-connect PV Systems: Visionary Projects with some huge challenges
Lessons learnt from Off‐Grid PV installations
10
Lack of market competition causes arbitrary price setting & this raises PV price to exorbitant levels – signals misleading message that PV system is very expensive
Lack of competency in design, installation and maintenance which causes high failure rates – signals misleading message that PV system is not reliable
Lack of proper PV performance monitoring and transparency in disclosure of performance
Lack of study in cost effectiveness of PV implementations
Off‐grid PV applications which are nearly 100% funded by Government is not sustainable in the long run – it creates an artificial market for very few customers.
Adverse perception generated from off‐grid PV systems:
Lack of awareness and understanding about feasibility of using PV for urban applications
Relative high capital cost for grid‐connected PV systems
RM 31,000 kWp ± 25% (imported + overpriced local cost)
No market demand: In 2005 total grid‐connected PV capacity is 468 kWp
Chicken and Egg Situation: Market vs price
Grid Connected PV: The Challenges in Malaysia
11
MBIPV Project (2005 - 2010)Objective: To reduce GHG emission by reducing long-term cost of BIPV technology via development of a sustainable BIPV market
Component 1: BIPV information
services, awareness and
capacity building programme
Component 4: BIPV industry
development and technology localisation programme
Component 2:BIPV market
enhancement & infrastructure development programme
Component 3: BIPV policies and
financing mechanisms programme
Targets:330% increased of BIPV capacity against baseline
20% reduction of BIPV unit cost from baseline BIPV Programme in 10th Malaysia Plan (10MP)
Post MBIPV Project: Sustainable & widespread BIPV applications, National BIPV programme with 30% annual BIPV growth and further cost reduction
12
Pre‐MBIPV Project
MBIPV Project
Proven Case (Malaysia): Market Development Reduces RE Cost
15
2007 Lowest Prices:• Japan: RM18.4/W• Germany: RM20.2/W• USA: 18.8/W• South Korea: 29.7/W
2008 Lowest Prices:• Japan: RM17.3/W• Germany: RM17.9/W• USA: 21.6/W• South Korea: 20.3/W
Energy Commission HQ, 71.5 kWp
16
BIPV: Solar Enclave, Setia
Eco Park 25 units @ ~ 5.25 kWp
each
17
MBIPV: Promotes Quality Systems
18
19
MBIPV Project is the first in ASEAN to obtain ISPQ
accreditation in grid‐connected PV training
10 day Theory + Practical + 4‐hr Exam
www.mbipv.net.my
Grid‐connected PV Training (since Feb 2008)
Off‐Grid PV Training (since June 2009)
20
Off‐Grid PV Training is also ISPQ accredited
Joint effort with Universiti Teknologi MARA
10 day Theory + Practical + 4‐hr Exam
www.mbipv.net.my
Approved PV Service Provider Scheme
License valid for 1 year with annual review.
Only for companies.
Staff passed ISPQ‐accredited PV training.
Use certified electrician.
Company shall be financially sound.
Company shall have workers insurance and public liability insurance.
Company shall follow APVSP Industry Best Practice Guidelines.
Company shall abide by the APVSP Code of Conduct.
21
Complemented by Quality Assurance Scheme
27 APVSPs
listed (Sep 2010)
22
Performance monitored via PVMC
23http://pvmc.uitm.edu.my/pvmc2010/
PV Monitoring Centre
24
First Solar (Up to 1,337 MW: 2008-2011)
Q-Cells (600 MW: 2009)
Tokuyama (3,000 tonnes: 2012)
EQ Solar (50 – 200 MW: 2010-2012)
Sunpower (1,000 MW: 2011)
PV FDIs
in Malaysia (June 2010)
25
STX Energy
Sun Bear Solar (PV Glass 2012)
MEMC (2011)
Malaysia: Major PV Producer by 2009
26
China, 3800
Germany, 2456Japan, 1487
Taiwan , 1400
Malaysia, 780
USA, 770
Philippines, 400
Korea, 231
Norway , 180 India, 120Others, 200
Source: IEA PVPS Trends Report 2009
27
Way Forward for Malaysia
Way Forward for Renewable Energies in Malaysia
28
9th Malaysia Plan (2006 - 2010)Targeted RE capacity to be connected to power utility grid:
300 MW in Peninsular Malaysia, 50 MW in SabahTargeted power generation mix:
56% NG, 36% coal, 6% hydro, 0.2% oil, 1.8% RE
RE capacity as of 31st
December 2009: Connected to power utility grid: 55.5 MW
Off grid (private palm oil millers & solar hybrids): 440 MW
8th Malaysia Plan (2001 - 2005)RE as the 5th
FuelImplied 5% RE in energy mix
National Renewable Energy Status
29
Key Issues Affecting RE
1. Market failure exists: The RE market “fails” due to misuse of monopsony power and information asymmetries; the RE market is also constrained by financial and technological factors
2. Constraints: Inherent factors that constrain the performance of the market: Economic, Financial, Technological.
3. Arbitrary price setting: RE prices set arbitrarily.
4. Tensions and trade-offs:The predicament of expecting that the utility will bear the higher costs of RE power (due to the higher RE price).
5. Absence of Regulatory Framework:Market failure compounded by absence of a proper regulatory framework, which prevents proper and legal action from being taken.
6. Poor governance:Poor governance affects the participation of stakeholders and legitimacy of the action.
7. Limited Oversight:No concerted oversight of implementation problems.
8. Lack of institutional measures:Lack of proper institutional measures to meet informational and technological needs.
30
31
10th
Malaysia Plan: Under NationalRE Policy and Action Plan
{RE Fund 1%}
Residential sector
Electricity bills 100%
Solar BIPV buildings
Commercial sector
{FiT payments}
{(FiT – displaced cost) +fee}
Industrial sector
Power UtilitiesRE Fund
(SEDA)
SREP developers
{Revenue 99%}
RE Funding Flow for FiT
32
Government sets RE goals and
provides RE Law
Capacity of renewable energy installation
Feed-In-Tariff rate (RM-Sen
per kWh)
Effective period
Annual degression
rateInstalled capacity up to and including 4 MW
32 16 years 0.50 %
Installed capacity above 4 MW, and up to and including 10 MW
30 16 years 0.50 %
Installed capacity above 10 MW, and up to and including 30 MW
28 16 years 0.50 %
Additional for use of gas engine technology with electrical efficiency of above 40%
+2 16 years 0.50 %
Additional for use of locally manufactured or assembled gas engine technology
+1 16 years 0.50 %
Additional for use of landfill or sewage gas as fuel source
+8 16 years 1.80 %
Feed-in Tariff Rate for Biogas
Feed-in Tariff Rate for BiomassCapacity of renewable energy
installationFeed-In-Tariff rate (RM-Sen
per kWh)
Effective period
Annual degression
rateInstalled capacity up to and including 10 MW
31 16 years 0.50 %
Installed capacity above 10 MW, and up to and including 20 MW
29 16 years 0.50 %
Installed capacity above 20 MW, and up to and including 30 MW
27 16 years 0.50 %
Additional for use of gasification technology +2 16 years 0.50 %
Additional for use of steam-based electricity generating systems with overall efficiency of above 14%
+1 16 years 0.50 %
Additional for use of locally manufactured or assembled gasification technology
+1 16 years 0.50 %
Additional for use of municipal solid waste as fuel source
+10 16 years 1.80 %
Feed-in Tariff Rate for Mini Hydro
Capacity of renewable energy installation
Feed-In-Tariff rate (RM-Sen
per kWh)
Effectiv e period
Annual degression
rateInstalled capacity up to and including 10 MW
24 21 years 0 %
Installed capacity above 10 MW, and up to and including 30 MW
23 21 years 0 %
Feed-in Tariff Rate for Solar PVCapacity of renewable energy installation Feed-In-Tariff
rate (RM-Sen per kWh)
Effective period
Annual degression
rateInstalled capacity up to and including 4 kWp 123 21 years 8 %Installed capacity above 4 kWp, and up to and including 24 kWp
120 21 years 8 %
Installed capacity above 24 kWp, and up to and including 72 kWp
118 21 years 8 %
Installed capacity above 72 kWp, and up to and including 1 MWp
114 21 years 8 %
Installed capacity above 1 MWp, and up to and including 10 MWp
95 21 years 8 %
Installed capacity above 10 MWp, and up to and including 30 MWp
85 21 years 8 %
Additional for installation in buildings or building structures
+26 21 years 8 %
Additional for use as building materials +25 21 years 8 %Additional for use of locally manufactured or assembled solar photovoltaic modules
+3 21 years 8 %
Additional for use of locally manufactured or assembled solar inverters
+1 21 years 8 %
Annual Quota on RE Capacity (MW)
Year Biomass Biogas Mini‐Hydro Solar PV Solid WasteTotal per
Annum2011 110 20 60 9 20 2192012 40 15 50 11 30 1462013 50 15 60 13 40 1782014 60 25 60 15 50 2102015 70 25 60 17 60 2322016 80 25 60 19 40 2242017 90 30 50 21 40 2312018 100 30 40 24 30 2242019 100 30 30 28 30 2182020 100 25 20 33 20 198: : : :
2030 280 2 282: : : :
2040 850 2 852: : : :
2050 1,350 2 1,352
Cumulative Quota on RE Capacity (MW)Year Biomass Biogas Mini‐Hydro Solar PV Solid Waste Total2011 110 20 60 9 20 219 2012 150 35 110 20 50 365 2013 200 50 170 33 90 543 2014 260 75 230 48 140 753 2015 330 100 290 65 200 985 2016 410 125 350 84 240 1,209 2017 500 155 400 105 280 1,440 2018 600 185 440 129 310 1,664 2019 700 215 470 157 340 1,882 2020 800 240 490 190 360 2,080 : : : : : : :
2025 1,190 350 490 455 380 2,865 : : : : : : :
2030 1,340 410 490 1,370 390 4,000 : : : : : : :
2040 1,340 410 490 7,450 410 10,100 : : : : : : :
2050 1,340 410 490 18,700 430 21,370
Drivers: Environment, Energy Security & Autonomy
Years
Elec
tric
ity P
rices
($/k
Wh)
GRID PARITY
Cost of electricity from RE
Cost of electricity from fossil fuels & nuclear
Source: BP, REC Europe, USA, Japan Asia
2010 2020
Grid Parity: FiT Scheme Ends –
occurs when the cost of electricity generation by RE is
comparable to fossil fuel
39
2020:2,080 MW (11%)
2030:4,000 MW (17%)
2050:21.4 GW (73%)
2015:985 MW (5.5%)
40
2030 3.5 GW
BAU
2050: < 2,000 MW
2050 11.5 GW
1090% increase of BAU
RE Policy & Action Plan: Goals
So what can we expect? Potential Impact of National RE Policy by Year 2020
Minimum RM 2.1 billion savings of external cost to mitigate CO2 emissions (total 42 million tonnes avoided from 2011 to 2020, onthe basis of RM 50 per tonne of external cost);
Minimum RM 19 billion of loan values for RE projects, which will provide local banks with new sources of revenues (at 80% debt financing for RE projects);
Minimum RM 70 billion of RE business revenues generated from RE power plants operation, which can generate tax income of minimum RM 1.75 billion to Government (on basis of 10% profit value where income tax is 25% on profit);
Minimum 52,000 jobs created to construct, operate and maintain RE power plants (on the basis of 15‐30 job per MW).
42
MBIPV ProjectTOI-U07 & U08, 1st Floor
Danau PointNo. 5, Jalan P16,
Precinct 1662150 Putrajaya
MALAYSIA
Tel: +603-8888 5411Fax: +603-8888 5423
Thank you from the MBIPV team