Govt to tender out RM2b worth of solar projects next year

KUALA LUMPUR (Nov 16): The government will undertake an open tender next year for the third round of the 500MW large-scale solar (LSS3) projects worth an estimated value of RM2 billion.

Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin said yesterday this is part of the country’s plans to achieve 20% of energy production from renewable sources by 2025.

She said details of the project’s work packages will be announced in January 2019.

“The LSS3 project, together with the upgraded net energy metering (NEM) mechanism and the supply agreement for renewable energy programme, will drive the growth of the solar industry in Malaysia,” said Yeo in her written reply to a parliamentary question by member of parliament for Kota Melaka Khoo Poay Tiong, who asked about the government’s plans to increase the LSS power generation project to achieve the 20% target.

Renewable energy (RE) currently constitutes 2% of the country’s total energy generation mix.

In order to achieve the 20% target, Yeo said 3,991MW (about 4GW) of new energy capacity is required to be added to the national electricity supply system.

“So far, the government has implemented two cycles of LSS projects with a total installed capacity of 958MW. Out of the total, three projects with capacities of 32.5MW have reached commercial operation status.

“The other projects are expected to begin generating energy between the end of the year and 2020,” she said, adding that more LSS projects are needed to achieve the 20% target.

“In the government’s electricity supply planning, the increase in the proportion of RE in electricity generation would not only reduce carbon emission intensity in the electricity supply sector by 49%, but could also result in a system cost savings of RM270 million for the period from 2018 to 2037,” she added.

Besides LSS power generation, Yeo said the government plans to increase electricity generation through the Feed-in-Tariff (FiT) and NEM mechanisms.

The FiT mechanism involves RE, namely biogas, biomass, geothermal mini-hydro as well as solar.

Under the FiT capacity permitted by the Sustainable Energy Development Authority (Seda) previously, some 566MW has been connected to the grid, with 70% or 380MW coming from solar projects.

“A total of 114MW of FiT RE quota will be reopened by Seda at the end of this month,” Yeo said.

This article first appeared in The Edge Financial Daily, on Nov 16, 2018.

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