Business

Friday July 15, 2011

BCorp can opt for special exemption for solar project

By LEONG HUNG YEE
hungyee@thestar.com.my


PETALING JAYA: Berjaya Corp Bhd (BCorp) could be applying for special exemption to park its proposed 100MW solar photovoltaic power plant under the feed-in-tariff (FiT) scheme for renewable energy to enjoy the high FiT rates.

Under the Renewable Energy (RE) Act 2010, only those producing renewable energy of 30MW and less are eligible to apply for the FiT to enjoy the high rate to help them to recover their investments. Residential homes which produce solar energy will be paid more than industrial producers but the cost of setting up solar panels in homes would be higher becuase there was no economies of scale.

Alternatively, the company could “break up” the 100MW power plant into smaller scale of 30MW and multiply it to qualify for the FiT scheme.

However, each of the 30MW plant will have to have a separate connection to the national grid and it will cost more to build compared with a single 100MW solar power plant.

“The Renewable Energy Act and the FiT are currently applicable only for plants up to 30MW. As such, we are unsure if a 100MW solar plant will get to enjoy the proposed FiT rates although we believed that this is possible,” OSK Research head Chris Eng said.

Another analyst said the plant would be developed over a 50-ha site, and capable of generating power to supply electricity to some 2,500 homes when ready.

“The project is not particularly lucrative if they are given the 21 sen per kWh tariff for all renewable energy projects,” the analyst said.

BCorp announced that it had submitted a proposal to the Government to build a 100MW solar power plant in Bukit Tagar, Selangor, where the group has a sanitary landfill. Chairman Tan Sri Vincent Tan said if the proposal went through, it would be BCorp's first venture into renewable energy sector.

Tan said the power plant would cost RM800mil to RM1bil. For the investment to be viable, it would depend on the FiT set by the Government.

Under the FiT scheme, household consumers who installed capacity up to and including 4 kWp (kilowatt peak) would be paid a FiT of RM1.23 per kWh

However, for solar producers generating above 4 kWp of solar PV electricity, and up to and including 24 kWp, will be paid RM1.20.

RE/Malaysia Building Integrated Photovoltaic Technology Application (MBIPV) national project team leader and chief technical adviser Ahmad Hadri Haris said the lower FiT for large-scale producers was due to the “economies of scale”.

“We make it fair for all to make equal returns and give opportunities for all to participate in this scheme. The FiT varies depending on the production capacity,” he said.

Ahmad said the cost to produce a 1KW of solar electricity would be about RM15,000 but 1MW might only cost RM10mil instead of RM15mil.

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