THE removing of any subsidy will trigger a rise in dwelling and operational prices. It is a reality that can not be denied.
However, are we paying the actual value and what if there are hidden prices parked underneath sure tariffs which are imposed on us? Should we pay for the errors or inapt approaches by the regulator?
There are few cost-cutting measures that would complement the federal government’s efforts to rationalise subsidies and possibly give you the option to plateau and periodically scale back rising prices of dwelling and of doing enterprise.
Measure 1: Renegotiate energy buy agreements for direct negotiations
Between 2014 and 2019, a number of direct negotiations of energy plant initiatives had been accepted by the Energy Commission (ST). Before these direct negotiations had been awarded, The Association of Water and Energy Research Malaysia (Awer) had opposed this transfer as this may trigger extra prices to be channelled to the electrical energy tariff. Last July, we proposed (through the finances session periods) thr renegotiation of energy buy agreements (PPA) that had been awarded by way of direct negotiations. Through this, the federal government might save greater than RM15 billion and these financial savings could possibly be channelled to all electrical energy customers.
Measure 2: Cost of managing intermittency from renewable vitality shouldn’t be handed to customers
A sudden enhance within the era of renewable vitality (RE) will enhance the danger of intermittency in electrical energy provide. The RE business states that its expertise is cheaper than fossil gas energy vegetation and has achieved “grid parity”. However, the intermittency danger of this RE expertise and its value affect on the electrical energy tariff is commonly ignored. To scale back this danger, fossil gas vegetation are placed on standby. The value of the capability expenses of those fossil gas vegetation is a part of the price of the electrical energy tariff element and the federal government channels it into the electrical energy tariff. In different phrases, the RE sector has not but reached precise grid parity prices and customers have to bear these extra prices.
Awer has repeatedly expressed this concern to the federal government in order that corrective motion could be taken.
Intermittency is due to the electrical energy provide from RE relying on pure circumstances. For instance, if the climate is cloudy, wet or hazy, photo voltaic panels can’t generate electrical energy constantly with a constant output.
Measure 3: Transparency of the upstream sector
Although the ST has regulated transmission, distribution and electrical energy provide providers, the associated fee transparency of the pure gasoline upstream sector remains to be unclear. This concern has been talked about many instances by Awer and the federal government wants to enhance the associated fee transparency of this sector.
Can the ST develop Incentive Based Regulation-type of mechanism for gasoline grid and regasification facility? How will the ST transparently benchmark enter value with one other related economic system that depends on pure gasoline?
Under the National Energy Transition Plan, pure gasoline will play a significant position and trigger very excessive value affect due to the Net-Zero 2050 goal that may bottleneck each current sources and proposed options. Can we get the ball rolling earlier than the associated fee bubble explodes?
Measure 4: Shutting down redundant businesses
Redundant businesses are extra monetary burden to the federal government in addition to being an operational stumbling block. For the water sector, the Sewerage Services Department has overlapping features with Pengurusan Aset Air Bhd, National Water Services Commission and Indah Water Konsortium.
The Water Supply Division have to be merged with the prevailing division for water providers inside the ministry accountable for water. For the vitality and inexperienced expertise sector, Sustainable Energy Development Authority and Yayasan Hijau could be closed down. The authority’s features could be carried out by an ST division. Meanwhile, Yayasan Hijau’s features could be carried out by Malaysian Green Technology and Climate Change Corp (MGTC). In addition to that, underneath the twelfth Malaysia Plan, an entity named Amanah Lestari Alam is being shaped. This operate could be centralised underneath MGTC in order that there will probably be higher coordinated implementations.
By finishing up these 4 steps, the federal government will probably be ready to scale back value impacts to electrical energy tariff in addition to vitality costs to guarantee we will finally attain an actual true value. This can even help the federal government to scale back its monetary burden additional. The vitality transition will give big value impacts to the general public and companies. It is crucial for the federal government to be proactive and make swift adjustments for the good thing about our nation, economic system and the individuals.
This article is contributed by Piarapakaran S, president of Awer, a non-government organisation concerned in analysis and improvement within the fields of water, vitality and atmosphere.
