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Feed-in-tariff mechanism for renewable energies to start by 2011

KUALA LUMPUR: The Malaysian government has announced the implementation of the National Renewable Energy Policy and Action Plan, which will see the start of the electricity feed-in-tariff (FiT) mechanism by 2011.

"The FiT is a mechanism that prioritises electricity generated from indigenous renewable energy resources to be purchased by power utilities at a fixed premium price for a specific duration.

“It is an instrument which has been proven to be very successful in accelerating renewable energies deployment, reducing carbon emissions and creating new jobs in many countries," Energy, Green Technology and Water Minister Datuk Sri Peter Chin told reporters after officiating the Conference on Sustainable Buildings South-East Asia in Kuala Lumpur Convention Centre on Tuesday, May 4.

The cost of FiT would be borne using the "polluters pay concept". This means consumers with higher electricity consumption will contribute more for green technology production to cover their carbon footprints. Chin said FiT can only work if there is a fund set up to pay for the premium offered in the mechanism. "1% will be built into the present electricity tariff and it will be for the fund", he said.
Countries such as Italy, Spain and Thailand have adopted successful FiT mechanisms in their countries, he said.
The tariff structure for FiT is still in the process of being finalised. Chin said it will be sufficiently attractive for companies and individuals to invest in.

"To illustrate the FiT mechanism for energy from solar photovoltaic, we are looking at between RM1.25 and RM1.75 per kWh for 21 years, biomass and biogas may be between RM0.24 and RM0.35 per kWh for 16 years, solid waste and sewage between RM0.30 and RM0.46 per kWh for 21 years and mini-hydro between RM0.23 and RM0.24 per kWh for 21 years," said Chin.
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