Driving RE increase in Malaysia through Solar Energy Purchase (S - - PowerPoint PPT Presentation

Driving RE increase in Malaysia through Solar Energy Purchase (S (SEP) and Supply Agreement – Renewable Energy (SARE)

Aznan Ezraie Ariffin TNBX, Retail Division, Tenaga Nasional Berhad Asian Utility Week 4 Sept 2019

Content

• Introduction and Background
• Rooftop Solar: A High-Benefit Power Source
• Overview of PV Business Model Evolution
• Available PV Business Models
• The Solar PPA Business Model
• Regulations and Solar size limitations
• PPA Example
• Conclusions

2

3 Business Plan

TNBX Services

Your Trusted Energy y Partner

From A to Z

Billing & Invoicing Energy Contracting Revenue Assurance (Collection & Disconnection) Metering Customer Experience Management Marketing Advisory Contact Center

YB MESTECC Minister’s Announcement

Announced nounced in IGEM M 2018 1. 1. LSS 2. 2. NEM 1:1 3. 3. SARE

Introduction

• Current PV business models principally revolve around the
• wnership of PV systems by individuals and utilities
• Who owns and controls the PV facilities and the related

flows of cash and other benefits determines the potential viability

• FiT and NEM policies instituted were expected to grow the

rooftop solar market in Malaysia

• Rooftop solar power market is expected to gain momentum

due to increasing public awareness and government support

• Commercial and industrial uptake of solar to take off once a

more economically viable business model is introduced

5

Benefits of Rooftop Solar Power

6

Construction Site access Photovoltaic (PV) systems are at the point of consumption, thus do not require additional investment for access during construction or for operation and maintenance. Modularity They can be designed for easy expansion if power demand increases. Operation and Maintenance Primary energy supply Solar energy is freely available, and the PV system does not entail environmental costs for conversion to electricity. Peak generation These systems offset the need for grid electricity generation to meet expensive peak demand during the day. Mature Technology PV systems nowadays are based on proven technology that has operated for over 25 years Impact Investments Rooftop PV system costs help offset part of the investment needed for new power generation, transmission, and distribution in the power grid. Cost Fuel savings from PV systems typically offset their relatively high initial cost. Environment PV systems create no pollution or waste products while operating, and production impacts are far outweighed by environmental benefits.

Overview of PV Business Model Evolution

7

0 Generation 1st Generation 2nd Generation PV System supply 3rd party ownership and operation ‘Full integration’ Business models focus on manufacturing, supply and installation

• f PV systems

Business models driven by third parties which develop projects and own PV systems, resulting in:

• Reduction of hassle and complexity

for end-user

• Better access to financing
• Leveraging of current incentives

structure (especially for commercial building applications)

• Utility gradually takes on a

facilitation role as PV market share grows Business models allow PV to become an integral part of the electricity supply and distribution infrastructure End-user is the owner Business models energy with variation

• f system:
• Ownership
• Operation control

Utility is largely passive, providing net metering and standard/simplified interconnection, but otherwise, unaffected Utility gradually takes on a facilitation role as PV market share grows Utility becomes more deeply involved as PV becomes major consideration PV product is specialized PV product is less specialized PV product supply chain becomes ‘commoditized’

International Solar Business Models

8

Solar as Digitalised Business

The Solar PPA Business Model

10

• Solar purchaser or “off-taker” buys power from a project

developer at a negotiated rate for a specified term without taking ownership of the system

• Project developer procures, builds, operates, and maintains

the system

• PV system may be physically located on the off-taker’s

premises (onsite PPA) or located remotely from the off-taker (offsite PPA)

• It is a financial mechanism that allows the off-taker to accrue

many of the benefits of solar power without owning a system.

11 11 Business Plan

Supply Agreement – Renewable Energy (SARE)

All parties’ interests are protected by SARE

Utili lity Pros

• sum

umer er Inv nves estor/

• r/Asse

Asset t Ow Owne ner

Businesses and government entities (non-residential customers) in Peninsula Malaysia Companies registered as RPVI with SEDA

Servic ice provi

• vider

der, Servic ice coven enant ants Customer

• mer contr

tracti acting ng & billing ing coven enant ants Engineering ineering Procure cureme ment nt Constru tructi ction

• n (EPC),

), O&M Pe Perform

• rmance

ance Coven enant ants

*RPVI = Registered PV Investor

What the ST rules say

12

SELCO NEM

13

Customer SELCO NEM Fuse (A) CT ratio Size (kWp) Rooftop (m2)

Domestic LV 1-Phase A 75% of MD 12 kWp NA Up to 12 72-120 3-Phase 72 kWp Up to 72 432-720 Commercial OPC 1-Phase B 60% fuse-rating 32 or 63 13.3 or 26.2 79.8 - 262 OPC 3-Phase LPC 60% CT rating NA 0.6 x 1.732 x 400 x CT size MV General C1 75% avg 1-year MD Limited by 75% of avg MD or Max Rooftop Size (whichever lower) Peak/Off-peak C2 Industrial LV OPC 3-phase D 60% fuse-rating 32 or 63 13.3 or 26.2 79.8 - 262 LPC 60% CT rating NA 0.6 x 1.732 x 400 x CT size MV General E1 75% avg 1-year MD Limited by 75% of avg MD or Max Rooftop Size (whichever lower) Peak/Off-peak E2 HV Peak/Off-peak E3 Agriculture LV H MV General H1 Peak/Off-peak H2

Regulation and Registration

14

Self Consumption NEM LSS (>30MW) TNB Registration √ √ √ SEDA Registration NA √ Provision of information PSS Study √ (> 425kW) √ (> 72kW) √ EC Licensing √ (>24kW for single phase and >72kW for 3-phase) √ (>24kW for single phase and >72kW for 3-phase) √ (award by bidding process) Maximum capacity 75% of MD 1kWp to 75% of MD (for last 1 year data or declared value) or 60% fuse rating/CT LSS1 – 50MWp LSS2 – 30MWp LSS3 – 1-100MWp RPVI Registration √ √ NA

Solar PPA Example Savings

15

16 16 Business Plan

Completed project under Solar Energy Purchase scheme

Sekolah Menengah Agama Darul Ehsan 65 kWp

17 17 Business Plan

Solar Monitoring for SAMDE

18 18 Business Plan

Bills Summary for SAMDE

Line Graph from July 2018 – June 2019

0.00 1,000.00 2,000.00 3,000.00 4,000.00 5,000.00 6,000.00 7,000.00 8,000.00 9,000.00 10,000.00

(RM) MONTH

NEM Bills started from 26th March 2019

19 19 Business Plan

Bills Before Solar

20 20 Business Plan

Bills After Solar

21 21 Business Plan

Summary Bills After Solar

Conclusions

22

• Solar PPAs can provide a fixed price for energy generated removing exposure to

price volatility and allowing for accurate and cost planning

• Solar power is low-maintenance, reliable and passive, with no significant fuel

supply risks, making it ideal for a PPA agreement

• Significant cost savings to be made as grid power prices rise over time and the

PPA rate remains stable

• Customers can expect to see savings from the outset at least a certain %

reduction on its energy bills within the first year of the agreement

• The customer can exist the contract via novation or buy-out of the solar asset at

any time

• The challenge so far in Malaysia is understanding of the PPA contract,

management approval (investment or pure savings), concerns on responsibilities (eg insurance and safety) and few actual installation showing examples of savings

THE END

TAMAT

Current TNB Tariff

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