KUALA LUMPUR, June 13 (Bernama) -- The Energy Commission will address thechallenges faced by producers of renewable energy from biomass under theNinth Malaysia Plan (9MP), said its chairman Datuk Dr Mohd Annas Mohd Nor.

"While we are encouraging renewable energy, it is still not going to bethe answer to the country's need for energy and electricity," he said.

"So in the 9MP, while we are promoting renewable energy, we don't expectit to be able to contribute more than two or three percent of theelectricity need in the grid," he told Bernama in an interview recently.

According to Mohd Annas, Malaysia still has to depend on more traditionalfuel sources such as gas, coal and hydro.

He said though renewable energy was introduced only lately, its usage hasbeen on for some time.

"Such energy has been used a lot in the palm oil industry. Most of thetime, the palm oil industry is depending on its own energy both for heatand electricity," he added.

Mohd Annas said close to 1,000 megawatts (MW) of oil palm energygeneration are available now but this is not connected to the electricitygrid (which means they are not commercialised).

He said in introducing renewable energy, what the government was trying todo was to get it into the commercial electricity grid.

He added that the idea of connecting renewable energy started in theEighth Malaysia Plan.

Mohd Annas said to facilitate the utilisation of renewable energy in powergeneration, the government has launched the Small Renewable EnergyProgramme (SREP).

He added that under the programme, small power generation plants (10MW andunder) which utilise renewable energy could sell the electricity to TenagaNasional and Sabah Electricity Board Sdn Bhd through the distributiongrid.

Mohd Annas said the government was encouraging renewable energy byproviding incentives.

"And we want to know the issues and challenges facing renewable energy. Infact, after three or four years of implementing the renewable energyprogramme, we now realise the issues to be addressed, especially as we arefocusing on biomass," he said.

"Earlier we thought biomass was actually a waste, but now the resource isready to be used as energy. In fact, it is not only used for energy, butalso for paper, compost and so on. So, it has become a resource of value,"he added.

Mohd Annas said as a result, the availability of biomass has become anissue.

"It is not like oil which is globally traded, not even like gas. Forinstance, Petronas digging for the gas and then supplying it," he said.

"But for biomass there is no real market per se. And when we want to startrenewable energy power generation based on biomass, we realised that theavailability is an issue. Earlier, we thought it was free, but now thereis a price for it," he added.

Mohd Annas said as renewable energy was a new sector, financialinstitutions want to know whether it was a viable investment for them tofund.

"So there are a number of issues, including the price. We realise that thebiomass technology or renewable technology is a lot more costlier," hesaid

"That's why we indicated the price for renewable energy to be sold toTenaga Nasional or Sabah Electricity Board in the range of 14 to 17 sen,"he added.

Mohd Annas said at these prices, renewable energy was not so attractive.

Tenaga Nasional, he added, would not want to buy at higher prices becauseit could get cheaper generation from traditional fuel sources.

"But yet the cost of generating renewable energy is not as cheap as fromgas or coal," he said.

Still, Mohd Annas was hopeful that the issues could be resolved. "Inmanagement, when you know the problem, you are 50 percent to the solution.So we are looking into how to deal with all these issues," he said.

"We hope in the 9MP to be able to provide the solutions to all thechallenges," he added.

-- BERNAMA