DISCUSSION

The Feed-in Tariff (FiT) System is Malaysias new mechanism under the
Renewable Energy Policy and Action Plan and the Renewable Energy Act
2011 catalyzing generation of renewable energy, up to 30MW in size. This
mechanism allows electricity produced from indigenous (renewable
resources sourced from within the country and are not imported from
neighbouring countries) renewable resources to be sold to power utilities at a
fixed premium price for a specific duration. The management and running of
the FiT System will be carried out and overseen by the Sustainable Energy
Development Authority Malaysia (SEDA Malaysia), a statutory body under
the Ministry of Energy, Green Technology and Water, established under the
Sustainable Energy Development Authority Act 2011. Feed-in tariffs oblige
distribution licensees (companies holding the license to distribute electricity
such as Tenaga Nasional Berhad) to buy from feed-in approval holders (an
individual or company who holds a feed-in approval issued by SEDA
Malaysia, and the holder is eligible to sell electricity from renewable
resources) the electricity produced from renewable sources and sets the FiT
rate. The FiT rate differs for different renewable energy technologies and
installed capacities. The distribution licensees would pay for each unit of the
renewable electricity supplied to the electricity grid for a specific duration
which is the period of which the renewable electricity could be sold to
distribution licensees and paid with the FiT rate. The duration is 16 years for
biomass and biogas, and 21 years for small hydro and solar PV. The duration
is decided based on characteristics of the renewable resources and
technologies. By guaranteeing access to the grid and setting a favorable
price per unit of renewable electricity, the FiT mechanism would ensure that
renewable energy becomes a viable and sound long-term investment for
companies, industries, and also for individuals. The FiT System is not
financed by the government. Instead it is financed by electricity consumers
themselves who contribute one percent (1%) of their total electricity bill
towards a Renewable Energy Fund. However, domestic customers who

consume 300 units of electricity or less each month will not have their tariffs
raised to pay to the Renewable Energy Fund.
The electric grid is an interconnected system used to maintain an
instantaneous balance between supply and demand (generation and load)
while moving electricity from generation source to customer. The connection
of numerous small renewable energy sources to the grid creates problems of
control and stability of our national grid system. Different resources make
different contributions to the electricity grid. Renewable power generation
such as solar power can be interrupted and its variability affects the stability
of the power produced. Solar power are not always available where and
when needed. Unlike conventional sources of electric power, these
renewable sources are not dispatchable which is the power output cannot
be controlled. To overcome a number of technical issues to deliver renewable
energy in significant quantities, control is one of the key enabling
technologies for the deployment of renewable energy systems. Smart grids
promise to facilitate the integration of renewable energy and will combine
established power technologies with advanced analytics, smart devices and
automation technologies to create a power network that is more reliable,
flexible, secure and efficient, and has a lower impact on the environment.
Generation technologies do not simply provide kilowatt hours to the grid. In
varying degrees, they also provide ramping ability to follow load, stay ready
to meet demand peaks and adjust their operating conditions to maintain grid
stability.
Feed-in Tariff has brought a lot of benefits in the aspect of economic,
political, social and environmental. In the aspect of economic, FiT give
positive impact on Green Employment which is a minimum of 52,000 jobs are
expected to be created, operate and maintain renewable energy power
plants. Besides that, it hedge against conventional fuel price volatility and
provide renewable energy investor security. The simple, transparent policy
structure in FiT System helps encourage new start-ups and innovators and it
create stable conditions for market growth. In political, FiT system

demonstrate commitment to renewable energy deployment and promote a

more decentralized and democratized form of electricity system. A
mechanism for achieving renewable energy and emissions-reduction targets
is created and the stakeholder base supporting RE policies is increased
through FiT System. In aspect of social, FiT encourages citizen and
community engagement in activities protecting climate and environment.
The most beneficial is in the aspect of environmental as it reduces carbon
emission and pollutions. The dependency of fossil fuels is also reduced and it
encourages energy efficiency measures.

REFERENCES
1. http://www.nrel.gov/csp/pdfs/45653.pdf
2. http://ieeecss.org/sites/ieeecss.org/files/documents/IoCT-Part1-06RESG.pdf
3. http://www.mbipv.net.my/dload/FiT%20Handbook%20English.pdf
4. http://seda.gov.my/go-home.php?
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5.