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Why postponements in green power programme?
IN the country’s push for the adoption of green energy, a programme called the Corporate Green Power Programme (CGPP) was initiated by the government in 2022.
It is essentially a mechanism of virtual power purchase agreements and is aimed at providing opportunities for businesses to participate in the promotion and use of renewable energy in their operations.
This is much needed considering the growing number of electricity consumers that aspire to achieve their environmental, social and governance or ESG targets.
Much work had gone into the creation of the programme and it should be applauded as a clever and efficient way of getting renewable energy suppliers connected with interested buyers.
However, there could be improvements in how the programme is being implemented.
After launching the programme on Oct 31, 2022, the initial application window for parties keen to participate was from Nov 7, 2022 to Feb 6, 2023. That deadline was subsequently extended to March 20, 2023.
Then on March 14, 2023 the Energy Commission (EC) increased the quota under the CGPP programme from 600 Megawatts (MW) to 800MW, with applications to be made from April 3 until the end of the year or when the quota is fully allocated.
And now it seems that the EC will determine the applications on a first-come-first-served basis and not on an evaluation basis.
Finally, the EC on March 31 (which notably was just a few days before the April 3 opening of applications), released a statement announcing the postponement of the CGPP applications to May 9.
So what gives? The EC ought to be clear, open and transparent about the CGPP initiative and the quotas it is allocating.
It must ensure that the most deserving recipients (and not necessarily the quickest to submit their applications) should be chosen so as to boost the nation’s plan for green energy.
BCX takeoff
BURSA Malaysia’s Carbon Exchange (BCX) inaugural carbon credit auction on March 16 was a success, attracting 15 buyers who purchased a total of 150,000 Verra-registered carbon credits.
The auction, done electronically, attracted interest from various local banks like CIMB Group Holdings Bhd
, Malayan Banking Bhd and AmBank (M) Bhd as well as national oil company Petroliam Nasional Bhd and Permodalan Nasional Bhd, and resulted in the price-discovery of carbon credits from two new products offered – the Global Technology-Based Carbon Contract (GTC) and the Global Nature-Based Plus Carbon Contract (GNC+).
The GTC Contracts, which featured carbon credits from the Linshu Biogas Recovery and Power Generation Project in China, were oversubscribed and cleared at RM18.50 per contract, according to the Bursa Malaysia website.
The GNC+ Contracts featured carbon credits from the Southern Cardamom Project, which is a REDD+ (Reducing Emissions from Deforestation and Forest Degradation) project from Cambodia which fetched a higher clearing price of RM68 per contract at the auction.
The voluntary carbon credit market pricing shows there’s appetite from buyers, albeit they have deep pockets, while the higher price of the GNC+ contracts shows the big potential for nature-based projects to churn out returns for rural communities and states in the country.
As an exchange, the core focus now for the BCX is to gain credibility with a big circle of investors, as this could help with raising carbon prices and act as a more effective policy response in the face of emerging climate change-based trade barriers presented by the EU’s Carbon Border Adjustment Mechanism (CBAM) and the US’ very own proposed Clean Competition Act (CCA).
Under the CBAM, for example, all non-EU goods sold into economic union would be subject to a top up carbon tax based on the difference between the foreign carbon price and the EU’s own domestic carbon price (Emissions Trading System or EUETS). Mind you, the price of carbon in the EUETS was above €100 (RM480) per tonne of CO2 in February.
To raise the carbon prices here, Bursa needs to internationlise the BCX to attract foreign inflows to help fund the country’s energy transition.
For a start, the BCX has become a member of International Emission Trading Association. The next big step would be to link up with the EUETS when carbon offsets are allowed to be transferred from one country to another.
Not a question of low-hanging fruit
TO say there is a lot that needs fixing in Malaysia is an understatement. It is true for most countries as the job of policy making and execution is always in search of an equilibrium.
In Malaysia, though, critics will say the situation is acute. From vegetation growing from the side of government buildings to the country’s healthcare system facing all sorts of problems, the laundry list of what to do appears to be lengthy.
Much of the deterioration appears to be from apathy. It is also due to the lack of funds. When money is short and prioritised in wrong areas, then Malaysia has a problem
When the Advisory Committee to the Finance Minister recently had its inaugural briefing, the media was told of the areas it wants to tackle.
It aims to looks at government revenue and expenditure to increase the nation’s revenue base and reduce operating expenditure.
It also aims at tackling the subject of subsidy and social protection to review and restructure existing subsidies while providing a more holistic social protection.
Also on its crosshair is determining the relevance of government-linked companies and consolidating where appropriate.
Then there is the national debt, which the committee intends to look at the good governance of.
The list is certainly not exhaustive given the shortcoming with our education and healthcare systems, but the start of areas under the purview of the Finance Ministry is a start. The only difference now should be the political will to implement the changes identified.
Malaysia had the Council of Eminent Persons before. It studied what to do with the country and its recommendations were submitted to the Prime Minister. That document was subject to the Official Secrets Act and no one really knows what action was effected to bring improvements to the nation.
The hope this time is that despite the recommendations under the same strict secrets law, hopefully there is political will to address the areas identified and bring meaningful change to a crumbling government ecosystem that is in dire need of improvements in the areas identified.
And the hope is it should be done in a quick step because improvements in the areas to be tackled will spillover to widespread betterment for the country.
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