Renewable Energy in Sabah
Renewable energy (RE) contributed 5% of total on-grid electricity generated in Sabah. For off-grid application which has a total capacity of 705MW, 137MW utilised palm oil wastes.
While the potential for further contribution is immense, the development is restricted due to the lack of incentives for RE plant developer as the selling price to SESB is capped at 21 sen/kWh.
With implementation of Feed-in-Tariff (FiT) mechanism in 2014, RE share is projected to increase further from the existing capacity of 36MW. There are 75.4MW capacity currently under construction consists of 36.5MW from palm oil wastes, 8.9MW from mini hydro and 30MW from geothermal.
Nevertheless, there are several challenges faced by RE developers such as long-term fuel supply commitment, securing financing for the project especially for newcomers with little financial backing and costly grid interconnection from power plant to main grid due to remoteness of the power plant. However, with proper planning and strategy, the project can still be implemented successfully.
Implementation of Feed-in-Tariff
The Feed-in-Tariff (FiT) mechanism as set out in the Renewable Energy Act 2011 (Act 725) obliges the utilities to buy electricity produced by RE power plants. Implementation of FiT mechanism comes under the purview of Sustainable Energy Development Authority (SEDA) which issues the feed-in approval certificate to individual or company. Holder of the certificate is eligible to sell electricity from RE at premium rate above the displaced cost sets by utilities for specific duration.
Through FiT mechanism, RE becomes a viable and sound long-term investment for companies and also for individuals as the mechanism guarantees developer not only favourable rate but also access to the grid. FiT is expected to drive forward the investment especially from private sectors.
The mechanism is not only applicable for new projects, but also extended to the five existing SREP projects. The fund for FiT is levied from electricity consumers based on 1% of total bill. However, the levy is exempted for consumers with monthly consumption under 300kWh. This funding mechanism is designed to encourage the development of renewable energy via cost-sharing among electricity consumers.
Details about FiT can be obtained from SEDA at www.seda.gov.my
RE Potential in Sabah
RE has a long history in the electricity supply in Sabah, being part of the system since the start of utility-scale application in 1920s.
For off-grid application, ST has issued 1005 private licenses with total installed capacity of 705MW, mostly fuelled by palm oil waste, wood waste and diesel.
Indeed, these plants contributed in no small part to the off-grid electrification as some of them are located far from the main grid system and also serve the community’s interest in localities. Currently, total capacity connected to the grid from biomass and mini hydro plants is 42.3MW of which 33MW is from biomass while the rest is from mini hydro.
Various studies on hydroelectric resources were conducted primarily to review and identify potential for power generation.
With estimated realisable potential of 782MW (12 potential sites) hydro resources are one of the most promising solutions to address the long term electricity requirement in Sabah.
In terms of resources, Sabah owns all the basic energy ingredients for success.
Natural gas, hydroelectric and renewable energy resources are expected to form the bedrock in which a sustainable power generation industry will be materialised.
However, as Sabah continues to rely on natural gas, alternative generation modes including power transfer through interconnection facilities need to be considered in order to reduce heavy dependency on single fuel.
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Sabah Electricity Industry Outlook 2014 by Energy Commission of Malaysia