Corporate solar PPA quota of 600MW open for applications from Nov 7
31 Oct 2022
Solar energy players interested in building up renewable energy (RE) assets with a view to selling RE to corporate clients based on mutually agreed pricing can apply for a quota from Nov 7, Putrajaya said on Monday (Oct 31).
The applications are under a 600MW quota to be implemented under the Corporate Green Power Programme (CGPP), through the virtual power purchase agreement (VPPA) mechanism previously announced by caretaker Prime Minister Datuk Seri Ismail Sabri Yaakob.
In a statement, the Ministry of Energy and Natural Resources said that all players who are approved under the CGPP must ensure that their power assets are operational by 2025 at the latest.
Applications close on Dec 31, 2023, or when the quota is fully subscribed to, it added.
The CGPP’s introduction comes on the back of existing mechanisms, such as net energy metering and self-consumption, which entails RE asset installation on-site by corporations to supplement their own electricity usage.
The green electricity tariff that was first announced by the Government in November 2021 has been fully subscribed to.
“Due to rising demand for green electricity, it is anticipated that existing programmes and initiatives/mechanisms will no longer be able to sustain the demand,” the ministry said in announcing the CGPP.
“To ensure that the application’s evaluation process is conducted transparently and orderly, a special evaluation committee will be set up comprising representatives of the Ministry of Energy and Natural Resources, Energy Commission, and the Single Buyer entity,” it said.
Under the CGPP, a solar power producer who successfully subscribes to the quota will proceed to apply for a New Enhanced Dispatch Arrangement, a programme that allows merchant generators to bid to sell energy to the grid.
The electricity utility company — in this case Tenaga Nasional Bhd (TNB) — will then pay the power producer for the electricity generated, based on the system marginal price or bid price.
Separately, the solar power producer will sign a VPPA with the corporate consumer to determine the energy volume and price. Based on this agreement, the corporate consumer and solar power producer will settle the difference between the agreed price and the system marginal price.
The corporate consumer then obtains the RE supply through TNB’s grid, and secures a renewable energy certificate.
Source: The Edge Markets