Tuesday, December 24, 2013

SEDA responded to concerns raised on the revised 1.6% surcharge

This is an excerpt of the press statement by Sustainable Energy Development Authority (SEDA) Malaysia in respond to the concerns raised by YB Mr. Lim Guan Eng, the Chief Minister of Penang and YB Dr Ong Kian Ming, a Member of Parliament for Serdang, on the achievements by SEDA Malaysia to justify the revision of the surcharge on electricity bills for renewable energy (RE) fund from 1.0% to 1.6%.

Beginning January 1 next year, consumers in Peninsula Malaysia, Sabah and Labuan will be levied with 1.6% surcharge in their electricity bills.

Effective date of the revised rate

The revised surcharge is effective from 1st January 2014 and affects electricity consumers of Tenaga Nasional Berhad (TNB) and Sabah Electricity Sdn Bhd (SESB); however domestic consumers with 300 kWh and less of electricity usage per month are exempted from such contribution.

Achievement and milestones

According to the CEO of SEDA Malaysia Datin Badriyah Abdul Malek, since the Feed-in Tariff (FiT) mechanism was implemented on the 1st December 2011, 2,686 applications have been approved out of which 89.1% of the applications were for solar photovoltaic (PV) for the individuals, 8.9% for solar PV for non-individuals and 2% collectively for biomass, biogas, and small hydro.

SEDA Malaysia has approved RE capacity of 482 MW (expected to achieve commercial operation by 2015), comprising:

Solar PV      - 40.2%
Biomass      - 27.7%
Small hydro  - 27.2%
Biogas         - 4.9%

Under the previous Small Renewable Energy Power (SREP) programme which was launched on 11th May 2001, only 61.2 MW of RE capacity was connected to the grid as at the end of 2010. Hence, the FiT mechanism which has been operational for only 2 years has achieved more RE capacity than the previous SREP which spanned nearly a decade.


By 2014, the projected job creation for the RE industry under the FiT programme is 11,412 whilst the total investment on the approved RE capacity is estimated to be RM 7.3 billion. Citing the solar PV industry as an example, in 2006, there were only 8 PV service providers in the country providing grid connected PV services. Today, more than 100 PV service providers have emerged in Peninsular Malaysia alone. With the opening of the FiT to Sabah and FT Labuan, SEDA expects the solar PV service providers to grow in numbers in the coming years.

The RE targets meted out under the National RE Policy and Action Plan was on the basis of collection of 2% surcharge imposed on electricity bills. SEDA said that for the past 2 years, only 1% surcharge was collected and without a revision of the surcharge, the RE industry and market growth in the country under the FiT will come to a grinding halt.

The Green Mechanics' 2 cents:

So, the RE targets in the National RE Policy was based on collection of 2% surcharge imposed on electricity bills? Why then the consumers alone are made to shoulder the burden? I have said my piece of mind before and I will say it again:-

The current 1% surcharge is correct and sufficient. The government just need to top it up with another 1% to make the endeavour a joint participation by both the government and the public. If SEDA revise the rate to 1.6%, the government should match it with 1.6%.

Furthermore, SEDA was not transparent (or perhaps overlooked) in giving out facts and figures in its press statement, especially the revolving fund size and the the projected amount it needed to keep the RE industry going. If I was asked to donate to certain organisation, I'd need to know where my money is going, and how much money is already in the organisation's coffer.

Would you not ask questions if your brother asks for certain amount of money, even if you could afford it?

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