Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 7th of March, 2015
According to the Energy Commission, electricity peak demand is expected to increase from 17,697 MW in 2015 to 22,938 MW in 2025, a 30% increase. In order to meet this increase in electricity demand, a number of contracts to build large scale coal and gas fired power plants have been awarded by the Energy Commission. This includes the controversial Project 3B to build a 2000MW coal fired plant that was awarded to 1MDB, which has been delayed because of 1MDB’s inability to raise the necessary finance to construct the plant. In light of these problems, the Minister of Energy, Green Technology and Water (KeTTHA), the Energy Commission and SEDA should seriously consider using net metering as an alternative to meet the rising energy demand in Malaysia.
Net Metering allows anyone with a connection to the electricity grid to sell back self-generated electricity (usually via solar power) to the grid and to claim back credits on their electricity bill. At the end of the day, these consumers only have to pay the difference between the electricity they have consumed and the electricity they have sold back to the grid – hence the term ‘net’ metering. Net metering is different from the current Feed-In-Tariff system since it allows anyone who can generate electricity to sell it back to the grid, rather than having to bid for a Feed in Tariff quota in order to be eligible to sell back electricity to the grid.
There are many advantages to net metering. Firstly, it can allow many more residential and commercial property owners to participate in the production and distribution of renewable energy (RE). According to SEDA’s 2013 annual report, only 2448 individuals and 252 non-individuals have managed to obtained the FiT approval at the end of 2013 for Solar PV (cumulative since the start of the FiT). The Solar PV quotas for individuals and non-individuals are always oversubscribed by many times and many individual house owners have been disappointed that they were not able to obtain the FiT approvals because of the high demand. Having net metering would solve this problem and expand the benefits of RE to many more people.
Secondly, introducing net metering can help smooth out the demand for electricity during peak periods. Peak periods are usually during working hours when offices are running their air conditioning units at full blast and when factories are operating at full capacity. This is also the time when the solar power generating potential is at its highest. Having more solar PVs connected to the grid would decrease the burden of generating electricity in existing power plants. For example, even though installed capacity in Malaysia was 21,060MW in 2014 and peak demand was only 17,152MW, there were times when TNB had to burn more expensive oil distillate in their gas fired plants to generate more electricity during peak periods because some of the coal fired plants had broken down and were not operational.
Thirdly, introducing net metering does not require new land to be acquired for the building of power plants which may prove to the unpopular to local residents. The RM1.3 billion coal-fired plant in Lahad Datu was cancelled as a result of protests by residents and environmentalists. Solar PVs for residential and commercial units would utilize the rooftops of existing buildings rather than requiring new land. Since residential and commercial units are already connected to the grid, the connection costs for net metering would be minimal which would not be the case for power plants and other power generating sources that are far removed from population centers and hence, the electricity grid.
Fourthly, giving a boost to renewable energy via net metering would help Malaysia reduce its carbon emissions. At the 2009 Copenhagen climate change summit, Prime Minister Najib made a commitment to reduce Malaysia’s carbon emissions by 40% by 2020, a promise which he re-iterated at the United Nations in September 2014. Net Metering would be an important step in helping Malaysia achieve this promise.
The focus of net metering should be for residential and commercial units rather than for large scale RE generation such as solar farms. This is ensure that the benefits of RE generation are felt by small scale producers rather than being captured by large companies.