This article first appeared in The Edge Malaysia Weekly on January 16, 2023 - January 22, 2023
MORE electricity users without their own renewable energy (RE) installation can now opt for green energy, as the government has increased the available quota of the Green Electricity Tariff (GET) to 6,600 gigawatt-hour (GWh), from the 4,500 GWh offered last year.
The 46% increase in quota follows the increase in the country’s RE generation capacity amid encouraging demand from consumers, the Ministry of Natural Resources, Environment and Climate Change (NRECC) said in a statement.
“NRECC is fully committed to offering green electricity supply from RE sources to users, especially commercial companies and industry participants that would like to reduce their carbon footprint in an effort to ensure environmental sustainability,” said Minister Nik Nazmi Nik Ahmad.
“The GET programme provides an option for businesses, investors and organisations operating in Malaysia to fulfil their environmental, social and governance (ESG) commitment through the utilisation of electricity from RE sources,” he added.
Additionally, the ministry has extended the exemption of the imbalance cost pass through (ICPT) charge on GET in the first half of 2023, and maintained a surcharge of 3.7 sen/kWh for the GET in the period.
The ICPT mostly reflects fluctuation of fuel prices used in conventional power generation. It currently imposes a surcharge of up to 20 sen/kWh in 1H2023, amid elevated coal and gas prices.
Exemption for GET subscribers for the ICPT was scheduled to end on Dec 31, 2022. The exemption was first given in 2022 as an incentive for users to adopt the GET scheme.
With the six-month extension, GET subscribers will continue to be charged just the base electricity tariff as well as the 3.7 sen/kWh GET surcharge during the period. In contrast, normal electricity users are charged the base tariff with the ICPT.
Moving forward, the Energy Commission (EC) will also be reviewing the ICPT exemption incentive for the 2H2023 period in order to ensure clarity and fairness of the mechanism, NRECC said.
The review will take into account the security, reliability and sustainability of the electricity supply system holistically, the ministry added.
First implemented in 2022, the GET is a strategic initiative by the government to provide green electricity generated from renewable sources to customers of Tenaga Nasional Bhd who intend to reduce their carbon footprint.
With the GET, carbon-conscious consumers without their own renewable energy installation can take up the grid’s renewable energy quota for a surcharge, in exchange for the Malaysian Renewable Energy Certificate (mREC) to be recognised as a user of green energy.
Those who subscribe to GET include companies such as multinationals, which pay the surcharge in order to shore up their ESG credentials amid pressure from investors, financiers and customers to reduce their carbon footprint.
These subscribers are also supporting the further development of the local RE sector, as proceeds from the surcharge will be used to support the nation’s RE development initiatives and agenda.
According to the ministry, the previous GET quota allocation was taken up by 1,994 consumers from the domestic, commercial and industry category.
The GET quota by the government ties to the available RE capacity in the national grid. Peninsular Malaysia’s installed RE capacity, which stood at 7,995MW as at June 2021, rose to 8,700MW in March 2022, according to reports.
Consumers who would like to subscribe to or renew the GET programme can do so by applying through Tenaga’s website or by visiting the nearest Kedai Tenaga.
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