Biofuels, Biomass, Crude Palm Oil, Malaysia, Renewable Energy, Renewable Energy Power Purchase Agreement

Tenaga lifts Purchase Price of Electricity from Biomass Waste

August 7, 2007 (Business Times) – To encourage the private sector to generate energy from biomass resources, Tenaga Nasional Bhd (TNB) has increased the purchase price of electricity produced from palm oil biomass waste to 21 sen per kilowatt hour from 19 sen now.

“The new price structure, under the Renewable Energy Power Purchase Agreement (REPPA), will be implemented immediately,” Minister of Enegry, Water and Communications Datuk Seri Dr Lim Keng Yaik said at the press conference after launching the Renewable Energy Roadshow today.

Dr Lim said the new price structure would help address the nagging problem of project viability and bankability.

“The uptake of renewable energy-generated electricity is also expected to increase significantly with the new price structure,” he said.

He said the generation of electricity from palm oil biomass was one way the millers could contribute to a cleaner environment through the proper disposal of the empty fruit bunches and the palm oil effluent.

“Under the clean development mechanism (CDM), they can get paid by being part of the environmental-friendly process of power generation using biomass.

“With the increasing price, better REPPA and more money from CDM, renewable energy will become a viable project,” he said.

Dr Lim said under the 9th Malaysian Plan, the government aimed to achieve the installation of 300 megawatt (MW) and 50MW of grid-connected electric power from renewable energy sources in Peninsular Malaysia and Sabah, respectively.

He urged the private sector to increase the share of renewable energy in the fuel mix of the country as only 12MW of renewable energy were generated so far.

“I am not happy with the development of the renewable energy in the country. We have an abundant supply of renewable energy resources, particularly oil palm biomass.

“There are about 400 palm oil mills in the country, if they don’t generate the electricity they can sell it to TNB,” he said. — Bernama


2 thoughts on “Tenaga lifts Purchase Price of Electricity from Biomass Waste

  1. I am quite facsinated by the article above as Malaysia is willing to move forward with renewable energy. Unfortunately, being working in this industry in Malaysia, I believe that the private energy producers especially renewables are lack of support from government bodies. Agni Energie Sdn Bhd is an independent power producer which has its own gasification technology using biomass. Given the fact that it is our own technology and our manufacturing plant is in Bukit Raja, we find it hard to get support from other concern parties. It will take one project years in order to be realized and kick start off the ground. Unless the Minister of Enegry, Water and Communications implements new acts or laws that could assist power producers in realizing a project. To even apply for a REPPA license, one has to go through many govt bodies such as Department of Environment, State Government, Tenaga Nasional and etc. Why cant it be a one stop centre? The timeline of each parties to revert with necessary approvals takes a long time and independant power producers are incurring huge cost of this delay. For example, the pre-development timeline in Europe only takes up to 6 months while in Malaysia, it could be up to 3 years. In the end of the day, many of this companies will not be interested to invest in Malaysia and might look elsewhere to invest. This will cause a huge loss to Malaysia economy as we are wasting our resources because of this red tapes that the power producers have to go through. In conclusion, the Ministry has to step up and act on it now before its too late.

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