1. Corporate Green Power Programme (CGPP) is an initiative by the Government to provide opportunity for business entities to participate in the promotion and use of renewable energy in their business operation. The programme supports the growing number of electricity consumers that aspire to achieve the Environmental, Social and Governance (ESG) target.
2. CGPP is essentially a mechanism of virtual power purchase agreement, which is implemented using the existing New Enhanced Dispatch Arrangement (NEDA) framework.
3. The diagram below shows the overview of CGPP framework:
OVERVIEW
1. There are three (3) parties involved in the energy delivery and transaction process under the Corporate Green Power Programme (CGPP):
- Solar Power Producer;
- The Corporate Consumer;
- The Electricity Utility Company
2. The Solar Power Producer shall develop, own, and operate the solar power plant. The energy produced by the solar power plant is exported through the electricity supply system of the Electricity Utility Company in accordance with the NEDA Rules.
3. The electricity supply for the Corporate Consumer is provided by the Electricity Utility Company, however the Corporate Consumer can have a virtual power purchase agreement with the Solar Power Producer for the virtual supply of solar energy.
4. The Electricity Utility Company pays the Solar Power Producer the electricity exported to the electricity supply system based on the Actual System Marginal Price (SMP) in accordance with the NEDA Rules.
5. In reality, the electricity supplied to the Corporate Consumer is not directly from the solar plant but from a pool of generation sources connected to the electricity supply system.
6. When the solar plant is not producing enough electricity, other generation sources will have to top up the supply to meet the demand of the Corporate Consumer.
7. The quality of electricity supply and services of the Electricity Utility Company for the Corporate Consumer will be the same as for other normal consumers.
8. As such the Electricity Utility Company will charge the Corporate Consumer according to the tariff for a normal consumer in the same category.
9. Under the Corporate Green Power Agreement (CGPA), the Corporate Consumer will purchase the energy produced by the Solar Power Producer based on an agreed price or price structure.
10. If the SMP is higher than the CGPA price, the Solar Power Producer will pay the Corporate Consumer the difference between the actual System Marginal Price (SMP) and the CGPA price and vice versa.
CALCULATION
1. For the quantum of energy E1 (kWh) exported by the solar power plant to the electricity supply system, the Electricity Utility Company will pay the Solar Power Producer an amount P1 based on the Actual SMP (RM/kWh) in that particular half-hour time frame.
P1 = E1 (kWh) x Actual SMP (RM/kWh)
2. For the amount of energy E2 (kWh) supplied by the Electricity Utility Company to the Corporate Consumer in that time frame, the Electricity Utility Company will charge the Corporate Consumer an amount P2 based on the approved tariff rate T (RM/kWh) of the Electricity Utility Company:
P2 = E2 (kWh) x T (RM/kWh)
3. For a CGPA with an energy price of C (RM/kWh), the amount for financial settlement P3 between the Corporate Consumer and the Solar Power Producer for the quantum of energy E1 (kWh) exported by the Solar Power Producer will depend on the difference between energy price C (RM/kWh) in the CGPA and the Actual SMP (RM/kWh) as follows:
- If C > Actual SMP
Corporate Consumer to pay the Solar Power Producer an amount:
P3 = E1 (kWh) x (C - Actual SMP)
- If Actual SMP > C
Solar Power Producer to pay Corporate Consumer an amount:
P3 = E1 (kWh) x (Actual SMP - C)
Note - the CGPA may be on a fixed price or a certain price structure. If the CGPA is on a price structure, then the financial settlement will be based on the price structure.
4. Besides the settlement on energy exported by the Solar Power Producer based on the difference between the Actual SMP and the energy price in the CGPA, the financial transaction under the CGPA may also include the arrangement on any credits or financial benefits for reductions of greenhouse gas emission earned from the generation of solar energy by the solar power plant.
CORPORATE GREEN POWER PROGRAMME’S QUOTA
1. The Energy Commission (EC) does not have the power to unilaterally increase quotas and/or originate or make changes to any policy direction pertaining to the Corporate Green Power Programme (CGPP).
2. Policy direction and directives are under the purviews of the minister-in-charge and the authority to increase the quota to 800 megawatts (MW) from 600 MW vested with the Minister of Natural Resources
3. The timeline for the take-up of this increased quota of 800 MW is the earlier of the end of this year or until the full allocation of that quota based on successful applications
4. With the quota increase announcement by the minister, there were also further necessary consequential refinements to the guidelines, which was delegated to the commission by the minister for execution.
5. Given such refinements, the extension of time for submission of applications is to provide both the solar power producer and the corporate consumer due preparatory time to understand the latest guidelines and make any necessary alterations to their submissions thereto.
Source:
https://www.singlebuyer.com.my/nedacgpp.php
https://www.malaymail.com/news/malaysia/2023/04/10/energy-commission-says-has-no-power-to-increase-corporate-green-power-programmes-quota/64121
