1. 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

2. Renewable Energy Development in Malaysia
8TH Malaysia Plan ( )
RE as the 5th Fuel
Implied target of 5% RE in energy mix
9th Malaysia Plan (2006 – 2010)
Targeted RE capacity to be connected to power utility grid:
300 MW – Peninsular Malaysia; 50 MW - Sabah
Targeted power generation mix:
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
RE as of 31st December 2011
Connected to the utility grid (as of 2011): MW (20% from 9th MP target)
Off-grid: >430MW (private palm oil millers and solar hybrid)

3. RE Act gazetted in June 2011 FiT introduced in Dec 2011
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

4. 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:
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
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
Shortfall: 3000 MW

5. The Reality – FiT statistics as at 30 APRIL 2015
Applications approved
Installations commissioned
Resource No
Capacity (MW)
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 %
Solar PV
6601
313.36
3819
191.75
61 %
Total
6,752
1,063.03
3,837
283.18

6. Points to Ponder 2015 Target for biomass was 330 MW
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

7. 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

8. 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

9. 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

10. 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

11. THANK YOU 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 %
THANK YOU