Increasing Distributed Solar Power through the Building Integrated Photovoltaic Project

Transcription

1 RENEWABLE ENERGY Increasing Distributed Solar Power through the Building Integrated Photovoltaic Project

2 A COMPREHENSIVE APPROACH Capacity support and incentives grow the photovoltaic market in Malaysia Although Malaysia has the greatest potential for renewable electricity generation of the six ASEAN countries, fossil fuels remain its main source of energy. 1,2 In 2000, Malaysia s primary energy supply consisted of oil and gas (92 percent), followed by coal (5 percent) and hydropower (3 percent). Between 2000 and 2010, carbon dioxide (CO 2 ) emissions from fossil fuel combustion increased 64 percent from 113 million metric tons of CO 2 to 185 million metric tons of CO 2, of which electricity and heat production accounted for 49 percent. 3 In 2010, Malaysia produced approximately 125 terawatt hours (TWh) of electricity at an average emission rate of 0.73 metric tons of CO 2 per megawatt hour (MWh). Industrialization is expected to drive a 4.8 percent annual increase in energy demand between 2000 to 2020, with the relative share of electricity demand increasing from 17.2 percent to 20.3 percent by Since 2000, the Malaysian government has progressively introduced policies to support renewable energy development. Under the Eighth Malaysia Plan (2001 to 2005), the government launched a new Five-Fuel Strategy that added renewable energy to help diversify the national fuel supply for energy security and to promote economic growth and environmental objectives. Since 2001, the Small Renewable Energy Power program has provided for simplified licensing procedures, access by renewable energy generators to the local distribution grid, import duty and sales tax exemptions, accelerated capital allowances for renewable energy and energy efficiency project investments, and pioneer status which waives approved types of investments (or promoted activities ) from taxable income for up to five years. Initially covering biomass, biogas, landfill waste, and mini-hydro, the Small Renewable Energy Power program was expanded to include solar photovoltaic generation in The Ninth Malaysia Plan (2006 to 2010) expanded support for renewable energy, setting a target of 350 MW of grid-connected renewable electricity generation by 2010, with a focus on new sources, such as solar and wind. 6 Under the Ninth Malaysia Plan, the government also launched the Building Integrated Photovoltaic (BIPV) Project. BRIGHT FUTURE FOR BUILDING-INTEGRATED PHOTOVOLTAICS The goal of the project, which was planned to run from 2005 to 2010, was not only to reduce cost and information barriers to the adoption of building-integrated photovoltaics, but also to lay the groundwork for a sustainable photovoltaics market in Malaysia. BIPV technology is integrated into a building s architecture, so it does 1

3 not require additional land. It can operate independently or be connected to the grid, although the latter is more common. In Malaysia, based on figures from 2005, BIPV technology could produce more than 12,000 gigawatt hours (GWh) of electricity per year and cover 20 percent of current national electricity demand. 7 This USD 25.2 million project, which received funding from government and private sources as well as the Global Environment Facility and UN Development Program, took a comprehensive approach to BIPV deployment. The project consisted of four main components which each included a number of specific activities to address various barriers. The four main components were: 1. BIPV information services, awareness and capacity-building. The project targeted the public, government, and industry with promotional and educational campaigns through websites, conferences, seminars and publications. Special training courses were developed, and a Malaysia Photovoltaic Industry Association was established. 2. BIPV market enhancement and infrastructure development. The country implemented demonstration and showcase projects, and launched the Suria 1000 program, a public auction scheme in which grid-connected solar systems are sold to the highest bidders, to catalyze demand for BIPV systems in the residential and commercial sectors. 8 The BIPV project set a target to install at least 1,545 kilowatts-peak (kwp) of photovoltaic capacity through its demonstration projects (205 kwp target), showcase projects (125 kwp target), and Suria 1000 program (1,215 kwp target). Additionally, the project developed standards for BIPV electrical installations and established a center to monitor and evaluate the performance of BIPV systems installed through its deployment efforts. 3. BIPV policies and financing mechanisms. The project helped build a solid national policy framework to support BIPV and renewable generation more broadly. Financing support included a net metering scheme for grid-connected photovoltaic systems, import duty and sales tax waivers for photovoltaic systems, and other government fiscal incentives. 4. BIPV research and development and industry support. Malaysia encouraged research activities, established a testing facility, and facilitated business partnerships to help build a BIPV industry and attract foreign direct investment. 9,10 The BIPV Project was to conclude in 2010, but was extended into 2011 to allow for transition to the new policy framework. Figure 1: Funding Sources for the BIPV Project (USD) $2,629,825 $1,161,797 $3,841,132 $4,385,273 $8,241,713 $4,699,420 Grant from Malaysian Government Grant from UNDP/GEF Private Sector Equipment and Construction Discounts Malaysian Government (in-kind) Grant from Private Sector Equipment Companies Customers via BIPV System Auctions Source: World Bank and UN Development Program. 2

4 PROJECT EXCEEDS TARGETS FOR CAPACITY, COST REDUCTION The BIPV Project overachieved its targets. As of August 2011: The project had awarded or commissioned 2,054 kilowatts-peak (kwp) of photovoltaic capacity, exceeding its target of 1,545 kwp by 33 percent. The project is estimated to result in annual greenhouse gas emission reductions of 1,400 tons of CO 2 per year. 11 The project supported six showcase installations totaling 140 kwp (exceeding the target of 125 kwp) and 19 demonstration projects totaling 390 kwp (compared to a target of 205 kwp). Local industries implemented as many as 50 BIPV projects per year, far above the annual target of three. Seven auction cycles of the Suria 1000 program resulted in 1,524 kwp being awarded or implemented (exceeding the target of 1,215 kwp). Riding international market trends, the project helped reduce the cost of BIPV technology by 39 percent (to USD 6,374 per kwp) exceeding the target of 20 percent. Since 2004, foreign direct investment in Malaysia s photovoltaic sector, supported in part by the BIPV Project, totaled more than USD 4 billion, creating about 5,000 jobs. Malaysia now ranks fifth in the world in photovoltaic manufacturing. 12,13 Importantly, the BIPV Project s policy program led to the development of the National Renewable Energy Policy and Action Plan, which was approved in 2010 and incorporated into the Tenth Malaysia Plan (2011 to 2015). This resulted in the 2011 passage of the Renewable Energy Act, which created a feed-in tariff, and a bill establishing a Sustainable Energy Development Authority to administer it. 14,15 The feed-in tariff applies to indigenous renewable generation of up to 30 MW from biomass (including solid waste), biogas (including landfill gas and sewage), small hydro and solar photovoltaic. The rate and duration of the fixed-price premiums vary, depending on the type of technology and the capacity. 16 This policy legacy will continue to create important incentives to increase deployment of BIPV and other forms of renewable energy generation in Malaysia. REFERENCES Government of Malaysia, United Nations Development Program and Global Environment Facility Final Evaluation Report: Malaysian Building Integrated Photovoltaic Project (MBIPV). Web. October < downloaddocument.html?docid=5207> MBIPV Project Website: < 3

5 ENDNOTES 1 The six ASEAN countries are Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. 2 Olz, S. and M. Beerepoot Deploying Renewables in Southeast Asia: Trends and Potentials. International Energy Agency Working Paper. Web. October < iea.org/publications/freepublications/publication/renew_ SEAsia.pdf> 3 International Energy Agency CO 2 Emissions from Fuel Combustion: Highlights (2012 Edition). Web. October < publication/co2emissionfromfuelcombustionhighlights. pdf > 4 Ministry of Natural Resources and Environment, Malaysia Malaysia Second National Communication to the UNFCCC. Web. October < docs/natc/malnc2.pdf> 5 Lalchand, Ir. G MBIPV Project Post 9th Malaysia Plan: What Next? Presentation by Pusat Tenaga Malaysia (Malaysia Energy Centre) at the BIPV Seminar What s in it for me? Palace of the Golden Horses, March 16, Web. October < C3.pdf > 6 Economic Planning Unit, Prime Minister s Department, Malaysia Chapter 19: Sustainable Energy Development. Ninth Malaysia Plan Web. October < RMK9/english/Chapter19.pdf> 7 Global Environment Facility Building Integrated Photovoltaic (BIPV) Technology Application Project MBIPV: Project Executive Summary. GEF Council Work Programme Submission. Web. October < web%20info/mbipv/mbipv%20execsum%20-%20final%20 Submission.pdf> 8 MBIPV Project. Suria 1000 Programme. Web. October < 4&categoryid=6> 9 Global Environment Facility, 2004, op cit. 10 Government of Malaysia, United Nations Development Program and Global Environment Facility Final Evaluation Report: Malaysian Building Integrated Photovoltaic Project (MBIPV). Web. October < evaluationadmin/downloaddocument.html?docid=5207> 11 Amount commissioned by end of the project in 2010; however, additional projects may lag. Calculations assume ~1100 kwh/kwp/year and an emission factor of 0.62 t CO 2 / MWh. 12 Government of Malaysia, United Nations Development Program and Global Environment Facility, 2011, op cit. 13 United Nations Development Program. Building Integrated Photovoltaic Technology Application. Web. October < w&menu=main> 14 Parlimen Malaysia. Malaysia Renewable Energy Bill Web. October < billindex/pdf/2010/dr472010e.pdf > 15 Parlimen Malaysia. Malaysia Sustainable Energy Development Authority Bill Web. October < DR432010E.pdf > 16 Ministry of Energy, Green Technology, and Water, Malaysia. (n.t.). Web. October < FAQs%20on%20FiT.pdf> Figure References Figure 1: Funding Sources for the BIPV Project (USD) World Bank and United Nations Development Program. UNDP/ GEF Building-Integrated Photovoltaic Project (Malaysia). Climate Finance Options. Web. November < climatefinanceoptions.org/cfo/node/76> 750 First Street, NE, Suite 940 Washington, DC p CCAP CENTER FOR CLEAN AIR POLICY