The Government has introduced the Net Energy Metering Scheme in November 2016 with quota allocation of 500 MW up to year 2020 to encourage Malaysia’s Renewable Energy (RE) uptake. The concept of NEM is that the energy produced from the solar PV installation will be consumed first, and any excess will be exported to TNB at prevailing displaced cost.
As an effort to encourage the NEM uptake, the NEM 2.0 was introduced on 1st January 2019, and the true net energy metering concept was adopted, where it allows excess solar PV generated energy to be exported back to the grid on a “one-on-one” offset basis. The NEM scheme were executed by the Ministry of Energy and Natural Resources (KeTSA), regulated by the Energy Commission (EC), with Sustainable Energy Development Authority (SEDA) Malaysia as the Implementing Agency (IA). The 500MW quota under the NEM 2.0 has been fully subscribed by 31st December 2020.
Due to overwhelming response from the PV industry and in an effort to boost the usage of Solar energy, the Energy and Natural Resources Minister via a press statement by KeTSA on 29th December 2020 has introduced the new Net Energy Metering 3.0 programme (NEM 3.0) to provide more opportunities to electricity consumers to install solar PV systems on the roofs of their premises to save on their electricity bill. The NEM 3.0 will be in effect from 2021 to 2023 and the total quota allocation is up to 500 MW. The NEM 3.0 will be divided into the following three (3) new initiatives/categories :-
Initiative/Categories | Quota Allocation (MW) | Quota Opening Date |
---|---|---|
NEM Rakyat Programme | 100MW | 1st February 2021 – 31st December 2023 |
NEM GoMEn Programme (Government Ministries and Entities) | 100MW | 1st February 2021 – 31st December 2023 |
NOVA Programme (Net Offset Virtual Aggregation) | 300MW | 1st April 2021 – 31st December 2023 |
Quota | Eligibility Criteria | Tariff Category | Capacity Limits |
---|---|---|---|
100MWac |
|
Domestic |
|
Under the NEM Rakyat Programme, Domestic Consumer(s) who has a solar PV installation on the roof-top of their premises will consume the energy produced first, and any excess will be exported to the TNB grid. The credit to be received for such excess energy will be used to offset part of the electricity bill on a “one-on-one” offset basis for a period of ten (10) years of operation.
The energy generated by NEM consumers will be consumed first which implies that less energy will be imported from the Distribution Licensee (DL). In many countries, the NEM scheme is effective to hedge against fluctuation or increase in electricity tariff in the future. This is especially relevant for consumers that fall under the high electricity tariff block.
Under this program, any excess energy generated will be exported to the utility grid and will be paid on a “one-on-one” offset basis. The priority is for self-consumption, however most of the domestic consumers may not be at home during the weekdays and may have excess energy exported to the grid. The credit shall be allowed to roll over for a maximum of 12 months.
The concept of NEM GoMEn is that the energy produced from the solar PV installation on Government premises will be consumed first, and any excess will be exported to the TNB grid. The credit to be received for such excess energy will be used to offset part of the electricity bill on a “one-on-one” offset basis for a period of ten (10) years of operation.
Quota | Eligibility Criteria | Tariff Category | Capacity Limits |
---|---|---|---|
100MWac |
|
Commercial |
The maximum capacity of the PV installation shall not exceed 1,000 kW and subject to the following conditions: a. for Medium Voltage Consumers, not exceeding 75% of Maximum Demand based on:
b. for Low Voltage Consumers, not exceeding 60% of fuse rating (for direct meter) or 60% of the current transformer (CT) rating of the metering current transformers. |
The energy generated by NEM consumers will be consumed first which implies that less energy will be imported from the utility. In many countries, the NEM scheme is effective to hedge against fluctuation or increase in electricity tariff in the future. This is especially relevant for consumers that fall under the high electricity tariff block.
Under this program, any excess energy generated will be exported to the utility grid and will be paid on a “one-on-one” offset basis. The priority is for self-consumption, however some premises which are not operating during the weekends or public holidays may have excess energy exported to the grid. The credit shall be allowed to roll over for a maximum of 12 months.
License is required under Section 9 of the Electricity Supply Act for any person to use, work or operate or permit to be used, worked or operated any solar PV Installation above 72kWp for three phase system and above 24kWp for single phase system. The NEM Consumer or the owner of the PV system asset shall apply for a license from the Energy Commission after receiving information that the NEM application has been approved.
The concept of Net Offset Virtual Aggregation (NOVA) Programme is that the energy produced from the solar PV installation on a NOVA consumer premise shall be consumed and designed primarily for self-consumption. Any excess energy which is not consumed at the premise where the PV installation is located due to operational constraints or monthly or seasonal variation in load demands at the said premises may be exported through the supply system under one of the following categories:
Category A | Category B |
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|
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Notes:
When you install a solar PV system onto your own rooftop and fully utilize all the solar energy generated from it, it will be considered as SELCO in which any excess will not be exported to the grid, according to the guidelines of the Electricity Supply Act 1990.
MESTECC encourages consumers in the residential, commercial and industrial sector to install solar PV for their self-consumption in order to reduce the overall energy consumption.
Under the Electricity Supply Act 1990, you can refer to the application guidelines for self-consumption:
Source: Suruhanjaya Tenaga-Energy Commission
Large Scale Solar or known as LSS is a competitive bidding programme to drive down the Levelized Cost of Energy (LCOE) for the development of large scale solar (LSS) photovoltaic plant and Energy Commission is the implementing agency for this scheme.
For individuals who are looking to develop a large-scale solar photovoltaic (PV) plant for connection to electricity networks will need to ensure their capacity is approved by the Energy Commission connected to either the Transmission Network or Distribution Network in Peninsular Malaysia, Sabah or Labuan
Under Section 50C-The Electricity Supply Act 1990 (Act) [Act 447], the Energy Commission has issued these guidelines:
These guidelines are not applicable to large scale solar power plants which have been given the right through Sustainable Energy Development Authority (SEDA) Malaysia to develop the plant under FiT scheme
For those who are looking to bid for LSS4, the deadline has passed. However, if you are participating in the LSS program, here are the key principles of the LSS@MEnTARI framework by the Energy Commission:
Source: Suruhanjaya Tenaga-Energy Commission
Companies and private consumers in many regions around the world have to adapt to an unstable or costly energy supply due to the unreliability of the grid or even the total absence of such a power supply. This involves, especially for companies and industries, a heavy disadvantage in terms of competitiveness on the global market. Paused production lines in manufacturing industries, interrupted cold chains in food factories or electrical breakdowns in office buildings are just a few examples how power cuts can cause substantial losses for the commercial sector and constitute a serious threat to their commercial success accordingly. Many companies rely on a diesel-based energy supply, suffering high and unpredictable fuel and maintenance costs. Utilising solar (photovoltaic) technology is much eco-friendlier and more cost-effective. The contractual framework of a power purchase agreement (PPA) offers all the advantages of clean energy at long term predictable low prices with limited or no upfront capital expenditure (CAPEX) costs for the company.
A power purchase agreement (PPA) is a contract between two parties: the seller (provider), who generates and sells electricity, and the buyer, who purchases the energy accordingly. The energy provider covers the majority part or indeed all investment costs for the engineering, procurement and construction and also the operating costs of the solar power plant and sells the generated energy at a fixed price to the purchasing party. This contract is closed for a certain period of time, usually more than ten years, and stipulates several other details for the energy delivery.
The circle of a Power Purchase Agreement in an easy way.
PPA includes various advantages: the energy consumer benefits from a reliable energy supply based on renewable and clean power sources (driven by the reliable recurrence of the sun every day passing through our skies) and also increases the availability of the energy supply when including energy storage facilities or additional energy generation appliances such as diesel generators. Prices for the electricity are contractually agreed and mostly independent from the price volatility of the national grid or fossil fuels.
All benefits at a glance: