MIDA BIOMASS CONFERENCE 2015
9 JUNE 2015
Driving the National Biomass Agenda
- Power Generation Perspective
Ir Dr Ali Askar Sher Mohamad
Chief Operating Officer
SEDA Malaysia
1
Malaysia:Energy
Renewable
Energy Policies
Renewable
Development
in Malaysia
8TH
Malaysia
Plan (2001 2005)
• RE as the 5th Fuel
• Implied target of 5% RE in energy mix
• Targeted RE capacity to be connected to power utility grid:
• 300 MW – Peninsular Malaysia; 50 MW - Sabah
• Targeted power generation mix:
9th
Malaysia
Plan
(2006 – 2010)
RE as of 31st
December
2011
• 56% natural gas, 36% coal, 6% hydro, 0.2% oil,
• 1.8% Renewable Energy
• Carbon intensity reduction target: 40% lower than 2005 levels by 2020
• Connected to the utility grid (as of 2011): 68.45 MW (20% from
9th MP target)
• Off-grid: >430MW (private palm oil millers and solar hybrid)
2
Biomass target
for 2015 is 330
MW
Increased to 1.6
% on Jan 2014
RE Act gazetted in June 2011
FiT introduced in Dec 2011
Solar PV target for
2015 is only 65 MW
Targets and more targets
REPAP
Targets
Year
Cumulative RE
Capacity
RE Power Mix
(vs Peak Demand)
2015
985 MW
5.5%-6%
2020
2,080 MW
11%
2030
4,000 MW
17%
ASEAN Energy Minister’s meeting in Oct 2014 decided to:
1. Redefine large hydro and off-grid hybrid as renewable
2. Target 30 % of installed capacity to come from RE by 2020
ASEAN Ministers Target: 30 % of installed capacity by 2020
Shortfall:
3000 MW
Expected installed capacity by 2020
30,000 MW
30 % RE
9000 MW
Existing and new large hydro and off-grid
hybrid by 2020
4500 MW
Expected FiT installations by 2020
1500 MW
4
The Reality – FiT statistics as at 30 APRIL 2015
Applications approved
Installations commissioned
No
Capacity (MW)
No
Capacity
% (in terms
of capacity)
Biogas
81
140.05
7
12.83
9%
Biomass
34
324.79
6
62.90
19 %
Small
Hydro
36
284.84
5
15.70
5.5 %
6601
313.36
3819
191.75
61 %
6,752
1,063.03
3,837
283.18
Resource
Solar PV
Total
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Points to Ponder




2015 Target under REPAP is 985 MW

30 April 2015 achieved only 285 MW

Today is about 300 MW

Best case scenario is 400 MW by end 2015 – only 40 % of target
2015 Target for PV was 65 MW

Today achieved almost 200 MW

Expected to hit 300 MW by end 2015
2015 Target for biomass was 330 MW

Today achieved only about 63 MW from 6 plants

If lucky, another plant will be commissioned this year, bringing the total to 7
plants and installed capacity of 75 MW
6 biomass plants achieved COD so far

All 6 plants were already approved under SREP, then migrated to FiT

3 plants had already COD under SREP

3 plants COD under FiT but 1 plant already under receivership now
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Problems facing biomass RE developers
Most of these issues are not faced by PV developers!

Feedstock issues

Most biomass RE developers do not own the feedstock, they’re
neither plantation nor mill owners

They are at the mercy of the feedstock owners who can raise
the price anytime or withhold the supply

At least 2 plants at present are running at less than 50 %
capacity due to feedstock issues

Long term feedstock contracts are a must for plants to be
viable, but most feedstock owners will not sign for more than 1
or 2 years

Best case scenario is for feedstock owners to go into the RE
business, or at least part of the feedstock should be their own
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
Plant technical issues


Problems with boilers

Most boilers used in the plantation industry are designed to
provide steam, and some power for internal use; they’re not
designed to be efficient

Most imported boilers designed to generate power are
designed for wood chips or other feedstock with low moisture
and high calorific value

Boilers specifically designed to be highly efficient using EFB as
feedstock with minimum maintenance are still being improved
Fuel handling

Critical to have effective fuel handling system with sufficient
storage, shredding and drying, and proper feeding into the
boiler

Many plants do not have sufficient space for storage, or an
effective drying system, resulting in fuel with high moisture
content being fed into the boiler
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

Grid connection issues

Distance from Grid; most plantations located away from the Grid,
making it uneconomical for grid-connection

Even when grid is available, remote location of the biomass
plants, away from the load centres, lead to technical issues like
voltage rise and reverse power flow, making grid-connection
difficult. In some places, the utility existing fault current is too
high to allow any more generator to be connected.

When everything else has been settled, there are often delays and
other problems with utility connection at the local level
Finance

Some pioneer failed and failing biomass plants have given a
negative perception of biomass RE

Long lead time and security of feedstock issues, leading to higher
risk

Most commercial banks shy away from financing biomass plants,
leaving only institutions with a specific mandate, like MDV, to
provide the finance
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Steps taken by SEDA to promote biomass RE


FiT rates for biomass (and biogas)

All degression in FiT rates has been set to zero since 2014

Introduction of new bonus rates, e.g. locally fabricated boiler
gets additional 5 sen/kWh

New higher rates have resulted in many new applications

Biomass quota is exhausted as soon as its released

But no guarantee that any plants will commission and run
successfully if they still make the mistakes described earlier.
Grid connection issues

Ongoing discussions with utilities to allow for reverse power
flow back to Transmission levels

Proposal to developers to cluster their biomass plants together
so that total capacity exceeds 30 MW

Facilitate connection to Transmission line
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Some parting remarks

Based on the 1.6 % contribution to the RE Fund, Seda has set
an annual new quota release of 20 MW for biomass and 15 MW
for biogas until 2025.

This quota should be sufficient to provide for most of the
plants that can be economically grid-connected

However, potential developers must be aware of the problems
mentioned earlier, especially the feedstock and plant technical
issues, before they rush into applying for quota

If the quota is exhausted, and there are still more plants to be
connected, we’ll need to increase the contribution to the RE
Fund to 2 %
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