1st Meeting of ASEM Green IPPs Network

Bangkok, 24 - 25 October 2002

Small Renewable Energy Power (SREP) Programme for the Promotion of Renewable Energy Power Generation
By Dr. Hassan Ibrahim Chief Executive Officer Pusat Tenaga Malaysia

CONTENTS
Background Introduction RE Strategies in Eight Malaysian Plan Small Renewable Energy Power (SREP) Programme Biomass Energy Potential from Oil Palm Industry Concluding Remarks

(administered by the Ministry of Energy, Communications & Multimedia, Malaysia)

- a non-profit organization

Established in 1998 to fulfill the need for a national energy research centre that co-ordinates various activities, specifically energy planning & research, energy efficiency, and renewable energy. Main functions of PTM :

Agent for public & private energy sectors;

Guardian / repository of a national energy database; Providing policy support through conduct of policy studies;

Promoter of national RE & EE (5th fuel) programmes;

Coordinator and facilitator of energy RD&D projects; National Secretariat on CDM (on energy).

Background
Malaysias Four-Fuel Strategies was adopted since 1979: oil, gas, coal & hydro; In 1999, Fifth-Fuel strategy was announced by Prime Minister: EE & RE; 8th Malaysia Plan (2001-2005) stresses on the development of Fifth-Fuel, with fiscal incentives provided in Budget 2001; Third Outline Perspective Plan (OPP3) (2001-2010) also stresses on the management of RE resources & encouragement of RE utilisation; In 2001 MECM announced its target of achieving gridconnected 500MW RE-powered electricity; Malaysia signed Kyoto Protocol in 1999 and ratified it in 2002.

OPP3 (2001-2010)
Statements on ENERGY SECTOR (infrastructure)

Sustainable development of the energy sector is important in ensuring competitiveness of the economyEfforts will be undertaken to manage both depletable and renewable energy resources to cater for the demand of the economy;
To supplement the conventional supply of energy, new sources such as renewable energy will be encouraged. Of these, biomass resources such as oil palm and wood waste as well as rice husks, will be used on a wider basis mainly for electricity generation. Other potential sources include palm diesel and hydrogen fuel.

RE Strategies in 8th Malaysia Plan

Strategies to intensify development of RE in 8MP (01-05): Promotion of RE resources such as biomass, biogas, municipal waste, solar and mini hydro; In-house biomass-based cogeneration; Demonstration projects; Commercialization of research; Extension of financial and fiscal incentives; Promotion of cooperation between government agencies and private institutions; R&D on palm diesel and usage of alternative sources such as fuel cell, hybrid cell and hydrogen fuel.

RE MILESTONES
Experiments to burn CPO in power plant boiler and palm olein in diesel gensets. The power generated was supplied to the grid; Palm Diesel as an alternative transport fuel; Small Renewable Energy Power (SREP) Programme;first REPA signed between TNB and owner in September 2001; Rice husks and MSW produced as fuel pallets;

Malaysia Biomass-based Power Generation and Cogeneration in the Palm Oil Industry (GEF/UNDPsupported, launched on 18 October)

Fuel Mix in Electricity Generation 1995 2000 (%)

1995
GWh 38,091

2000
63,684

2005
93,649

Oil Coal Gas Hydro Others Peak Demand (MW)

9.2 10.7 70.3 9.6 0.2

3.3 7.8 81.4 7.4 0.1

1.3 32.6 61.0 5.0 0.1

7,212

10,673

16,834

Source: 8th Malaysia Plan 2001 - 2005

SREP Programme and its Present Status

Malaysias SREP Programme

SREP (Small Renewable Energy Power) Programme was launched by Malaysias Minister of Energy, Communications and Multimedia on May 11th 2001; Special Committee on Renewable Energy (SCORE) was established to drive the programme; RE Palm oil residues (esp.), wood-wastes, rice husk & rice stalk biogas, mini hydro, are most potential biomass fuel for this programme; The Government has targeted a generation capacity of 500 MW from SREP Programme in the 8th Malaysia Plan (by end of 2005).

Implementation Procedures for SREP Programme in Malaysia

Applications for new power plants or to rehabilitate and upgrade existing plants according to SREP Guidelines; All existing power plants powered by RE may apply to sell electricity to the utilitys distribution system; The developer is to negotiate with utility (TNB/SESB) based on willing seller and willing buyer basis ; A public license for generation and sale of energy will be issued by the Energy Commission. The license will be valid for 21 years from the date of the beginning of operations.

SREP Criteria as Determined by SCORE

Capacity of generated power is not limited but maximum capacity to be grid-connected is 10 MW; The distance between the generating plant and the location of the interconnection point at the distribution system must be within 10 km, with connection voltage 11 KV to 33 KV; The electricity buyer will decide the load (or whether there is load) at the site of generation; No standby charges. If there is need for energy from utility, the current tariff will be used to calculate charges;

SREP Criteria as Determined by SCORE (contd)

All costs incurred for the interconnection including system reinforcement (if required) such as replacement of cables, switchgears, protection relays and installation of meters will be born by the developer; The existing generating plant must be ready to deliver power to the distribution system within 12 month after the approval of the interconnection; The new plant and the rehabilitated plant must be ready to operate within 24 months after REPPA has been signed; Department of Environment requirements must be complied with; If steam is needed for the mill, cogeneration system is given priority.

FLOW CHART FOR APPLYING FOR CONNECTION TO UTILITYS DISTRIBUTION SYSTEM

RE Developer to provide Commitment Fee * for Utility System Study

-* Commitment fee refundable to -Re Developer upon off-take of power RM15.000 for capacity < 3 MW RM 25,000 for capacity from 3MW 10 MW

Re Developer negotiates And signs REPPA with Utility

-Developer & Utility to submit -Monthly report on progress of negotiation to SREP Centre, EC

RE Developer commits to design and construct the Interconnection Facilities & System Reinforcement (if Any) in accordance to Utility System Study

RE Developer to present finalized Plant design & approval from Utility for Interconnection Facilities design

RE Developer to remit Payment to Utility for all Necessary system Reinforcement work

RE Developer to start Construction of proposed plant And interconnection facilities

RE Developer/ Utility to perform necessary work to reinforce system

RE Developer to submit Protection coordination studies./setting, testing & Commissioning schedule etc

Final verification of design, Testing and commissioning, O & M procedures

Connect to Distribution Grid

Progress of SREP Projects Proposals

1. Number of licenses issued (total capacity ~ 20 MW) No of additional projects approved (licenses pending on signing of REPPA) (Total capacity ~ 90 MW) Additional proposals in pipeline 3

2.

23

3.

28

Biomass Energy Potential from Oil Palm Industry

A study conducted by DANCED in 1999 revealed:
Annual RE potential was estimated at 36.2 MTOE with an equivalent value of more than US$6.8 billion (based on the equivalent average price of US$25 per barrel of oil); 36.2 Mtoe is 20% higher than Malaysias total energy demand in 2000; The gross RE potential is estimated at 823 MTOE for the period between 2000 to 2020;

Biomass Resource Potential (1999)

Sector Quantity kton/yr
424 2,177 17,980 300 31,500 72,962

Rice Mills Wood industry Palm Oil mills Bagasse POME TOTAL

Potential Annual Generation, GWh 263

598 3,197 218 1,587 5,863

Potential Capacity MW
30 68 365 25 177 665

Note: The potential annual electricity production and power generation are calculated assuming all the available biomass resources are utilized. Source: MPOB, SIRIM, FRIM, Forestry Department and Ministry of Agriculture

Additional Remarks/Conclusion
In energy sector, 8MP focuses on renewable energy & energy efficiency as the fifth fuel by expanding four-fuel diversification policy introduced in 1979; Fiscal incentives, policy instruments & institutional mechanism are in place to drive the RE & EE strategies. They need to be improved to achieve national target; Malaysia is targetting 500MW (5% of current electricity demand) of power generation from RE to be grid-connected by end of 8MP (2005); Its only a soft approach; Financing one major barrier in smooth progress of the SREP programme.

For futher information, kindly refer to :

www.ptm.org.my