Malaysia’s Ministry of Energy and Natural Resources (KeTSA) announced its New Energy Metering Program 3.0 (NEM 3.0), which aims to incentivize the export of excess solar energy into the grid by consumers with solar photovoltaic systems.
Under NEM 3.0, residential customers and buildings of government entities can each export 100 MW of surplus solar generation into the grid. Consumers in the commercial and industrial (C&I) category are given a quota of 300 MW. The new program is set to come into effect on February 1, 2021.
For the residential and government consumer categories, excess power can be injected back into the grid on a ‘one-on-one’ offset basis, which implies that every 1 kWh injected into the grid would be offset against 1 kWh of power consumed from the grid. C&I consumers can export power back to the grid at the system marginal price or the prevailing market rate. This amount would be credited to their power bill for the subsequent month.
After the first ten years, the ‘self-consumption model’ would apply. Under this model, consumers would be allowed to use the power generated from their solar projects without exporting any excess energy back into the grid.
The 500 MW export quota was fully subscribed on November 27, 2020. The Ministry also announced enhancements to the older program.
Consumers under NEM 2.0 are allowed to export surplus solar power on a ‘one-on-one’ basis to the grid for an additional ten years over the ten years permitted previously. They will continue to be compensated at the system management price for this period, after which the self-consumption model will apply.
Malaysia announced its Net Energy Metering Program back in 2016 and the successive, NEM 2.0, in 2019. The program was introduced to promote the adoption of solar energy in the country.
In June 2020, KeTSA announced a 1 GW solar tender. The tender was floated under the fourth round of the nation’s Large- Scale Solar program initiated by the Malaysian government to attract investments in the renewable sector. This was the largest capacity ever tendered by the Malaysian government. In January 2020, the energy commission of Malaysia awarded about 491 MW of large-scale solar projects to ib vogt GmbH and Coara Solar, Cypark Resources Berhad and Impian Bumiria, JKH Renewables and Solarpack Asia, ENGIE Energie Services and TTL Energy, and Konsortium Beseri Jaya and Hanwha Energy Corporation Singapore.
Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.