IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v10y2017i8p1114-d106443.html
   My bibliography  Save this article

The Optimal Generation Cost-Based Tariff Rates for Onshore Wind Energy in Malaysia

Author

Listed:
  • Aliashim Albani

    (Eastern Corridor Renewable Energy (ECRE) Research Group, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia
    School of Ocean Engineering, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia)

  • Mohd Zamri Ibrahim

    (Eastern Corridor Renewable Energy (ECRE) Research Group, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia
    School of Ocean Engineering, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia
    TATI University College, Teluk Kalong, Kemaman, Terengganu 24100, Malaysia)

  • Che Mohd Imran Che Taib

    (Eastern Corridor Renewable Energy (ECRE) Research Group, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia
    School of Informatics and Applied Mathematics, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia)

  • Abd Aziz Azlina

    (Eastern Corridor Renewable Energy (ECRE) Research Group, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia
    School of Social and Economic Development, Universiti Malaysia Terengganu, Kuala Nerus, Terengganu 21030, Malaysia)

Abstract

The government of Malaysia has recently decided to explore the feasibility of wind energy to generate electricity in the country. Their ambition is to achieve a measureable target in the percentage contribution of electricity generated by renewable energy technology in the national electricity generation mix. As part of this initiative, a study of wind energy policy has been conducted by identifying the optimal feed-in tariff (FiT) rates to support the development of wind energy in the country. The aim of this paper is to calculate the optimal level of tariff that is suitable with local wind conditions. A closed-form equation for optimal feed-in tariff rate of wind energy with consideration of the availability of capital allowance has been developed. The focus is on small- and utility-scale wind turbine installations. As a result, by considering the availability of capital allowance, the optimal FiT rates for small-scale wind turbines in Malaysia are between 0.9245–1.1313 RM/kWh, while utility-scale rates are between 0.7396 and 0.9050 RM/kWh. The level of FiT is changed with the changing value of economic parameters. Kudat, in northern Borneo, has been identified as a prime site for wind energy development in the country; however, more work needs to be conducted, including the development of a regional wind map and measurement of wind data at more new potential sites.

Suggested Citation

  • Aliashim Albani & Mohd Zamri Ibrahim & Che Mohd Imran Che Taib & Abd Aziz Azlina, 2017. "The Optimal Generation Cost-Based Tariff Rates for Onshore Wind Energy in Malaysia," Energies, MDPI, vol. 10(8), pages 1-16, July.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:8:p:1114-:d:106443
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/10/8/1114/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/10/8/1114/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aliashim Albani & Mohd Zamri Ibrahim, 2017. "Wind Energy Potential and Power Law Indexes Assessment for Selected Near-Coastal Sites in Malaysia," Energies, MDPI, vol. 10(3), pages 1-21, March.
    2. Wong, S.L. & Ngadi, Norzita & Abdullah, Tuan Amran Tuan & Inuwa, I.M., 2015. "Recent advances of feed-in tariff in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 42-52.
    3. Fleten, Stein-Erik & Linnerud, Kristin & Molnár, Peter & Tandberg Nygaard, Maria, 2016. "Green electricity investment timing in practice: Real options or net present value?," Energy, Elsevier, vol. 116(P1), pages 498-506.
    4. Unknown, 2016. "Energy for Sustainable Development," Conference Proceedings 253270, Guru Arjan Dev Institute of Development Studies (IDSAsr).
    5. Petković, Dalibor & Shamshirband, Shahaboddin & Kamsin, Amirrudin & Lee, Malrey & Anicic, Obrad & Nikolić, Vlastimir, 2016. "Survey of the most influential parameters on the wind farm net present value (NPV) by adaptive neuro-fuzzy approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1270-1278.
    6. Nor, Khalid Mohamed & Shaaban, Mohamed & Abdul Rahman, Hasimah, 2014. "Feasibility assessment of wind energy resources in Malaysia based on NWP models," Renewable Energy, Elsevier, vol. 62(C), pages 147-154.
    7. Rigter, Jasper & Vidican, Georgeta, 2010. "Cost and optimal feed-in tariff for small scale photovoltaic systems in China," Energy Policy, Elsevier, vol. 38(11), pages 6989-7000, November.
    8. Islam, M.R. & Mekhilef, S. & Saidur, R., 2013. "Progress and recent trends of wind energy technology," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 456-468.
    9. M.Z. Ibrahim & A. Albani, 2014. "The Potential of Wind Energy in Malaysian Renewable Energy Policy: Case Study in Kudat, Sabah," Energy & Environment, , vol. 25(5), pages 881-898, July.
    10. Muhammad-Sukki, Firdaus & Abu-Bakar, Siti Hawa & Munir, Abu Bakar & Mohd Yasin, Siti Hajar & Ramirez-Iniguez, Roberto & McMeekin, Scott G & Stewart, Brian G & Abdul Rahim, Ruzairi, 2014. "Progress of feed-in tariff in Malaysia: A year after," Energy Policy, Elsevier, vol. 67(C), pages 618-625.
    11. Mattar, Cristian & Guzmán-Ibarra, María Cristina, 2017. "A techno-economic assessment of offshore wind energy in Chile," Energy, Elsevier, vol. 133(C), pages 191-205.
    12. Staffell, Iain & Green, Richard, 2014. "How does wind farm performance decline with age?," Renewable Energy, Elsevier, vol. 66(C), pages 775-786.
    13. Asian Development Bank Institute, 2017. "Renewable Energy Developments and Potential in the Greater Mekong Subregion," Working Papers id:11884, eSocialSciences.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gyanendra Singh Sisodia & Wafa Mohammed Ebrahim Al Mazrouei & Rajesh Mohnot & Aqila Rafiuddin, 2023. "Economic Risk of Wind Farm Investments in UAE: Evaluation through Real Options Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 658-666, September.
    2. A Albani & MZ Ibrahim & KH Yong & ZM Yusop & MA Jusoh & AR Ridzuan, 2021. "The wind energy potential in Kudat Malaysia by considering the levelized cost of energy for combined wind turbine capacities," Energy & Environment, , vol. 32(7), pages 1149-1169, November.
    3. Muhammad Aqil Afham Rahmat & Ag Sufiyan Abd Hamid & Yuanshen Lu & Muhammad Amir Aziat Ishak & Shaikh Zishan Suheel & Ahmad Fazlizan & Adnan Ibrahim, 2022. "An Analysis of Renewable Energy Technology Integration Investments in Malaysia Using HOMER Pro," Sustainability, MDPI, vol. 14(20), pages 1-24, October.
    4. Ilunga Kajila Rice & Hanhua Zhu & Cunquan Zhang & Arnauld Robert Tapa, 2023. "A Hybrid Photovoltaic/Diesel System for Off-Grid Applications in Lubumbashi, DR Congo: A HOMER Pro Modeling and Optimization Study," Sustainability, MDPI, vol. 15(10), pages 1-15, May.
    5. Mukisa, Nicholas & Zamora, Ramon & Lie, Tek Tjing, 2021. "Store-on grid scheme model for grid-tied solar photovoltaic systems for industrial sector application: Benefits analysis," Renewable Energy, Elsevier, vol. 171(C), pages 1257-1275.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aliashim Albani & Mohd Zamri Ibrahim, 2017. "Wind Energy Potential and Power Law Indexes Assessment for Selected Near-Coastal Sites in Malaysia," Energies, MDPI, vol. 10(3), pages 1-21, March.
    2. A Albani & MZ Ibrahim & KH Yong & ZM Yusop & MA Jusoh & AR Ridzuan, 2021. "The wind energy potential in Kudat Malaysia by considering the levelized cost of energy for combined wind turbine capacities," Energy & Environment, , vol. 32(7), pages 1149-1169, November.
    3. Aliashim Albani & Mohd Zamri Ibrahim & Kim Hwang Yong, 2018. "Influence of the ENSO and Monsoonal Season on Long-Term Wind Energy Potential in Malaysia," Energies, MDPI, vol. 11(11), pages 1-18, November.
    4. Lau, Lin-Sea & Choong, Yuen-Onn & Wei, Chooi-Yi & Seow, Ai-Na & Choong, Chee-Keong & Senadjki, Abdelhak & Ching, Suet-Ling, 2020. "Investigating nonusers’ behavioural intention towards solar photovoltaic technology in Malaysia: The role of knowledge transmission and price value," Energy Policy, Elsevier, vol. 144(C).
    5. Luis M. Abadie & Nestor Goicoechea, 2021. "Old Wind Farm Life Extension vs. Full Repowering: A Review of Economic Issues and a Stochastic Application for Spain," Energies, MDPI, vol. 14(12), pages 1-24, June.
    6. Alaa A. F. Husain & Maryam Huda Ahmad Phesal & Mohd Zainal Abidin Ab Kadir & Ungku Anisa Ungku Amirulddin & Abdulhadi H. J. Junaidi, 2021. "A Decade of Transitioning Malaysia toward a High-Solar PV Energy Penetration Nation," Sustainability, MDPI, vol. 13(17), pages 1-16, September.
    7. Mohd Chachuli, Fairuz Suzana & Mat, Sohif & Ludin, Norasikin Ahmad & Sopian, Kamaruzzaman, 2021. "Performance evaluation of renewable energy R&D activities in Malaysia," Renewable Energy, Elsevier, vol. 163(C), pages 544-560.
    8. Gualtieri, G., 2022. "Analysing the uncertainties of reanalysis data used for wind resource assessment: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    9. Rusu, Eugen & Onea, Florin, 2019. "An assessment of the wind and wave power potential in the island environment," Energy, Elsevier, vol. 175(C), pages 830-846.
    10. Walmsley, Timothy G. & Walmsley, Michael R.W. & Varbanov, Petar S. & Klemeš, Jiří J., 2018. "Energy Ratio analysis and accounting for renewable and non-renewable electricity generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 328-345.
    11. McKenna, R. & Ostman v.d. Leye, P. & Fichtner, W., 2016. "Key challenges and prospects for large wind turbines," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1212-1221.
    12. Wong, S.L. & Ngadi, N. & Abdullah, T.A.T. & Inuwa, I.M., 2015. "Current state and future prospects of plastic waste as source of fuel: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1167-1180.
    13. Shamsan Alsubal & Wesam Salah Alaloul & Eu Lim Shawn & M. S. Liew & Pavitirakumar Palaniappan & Muhammad Ali Musarat, 2021. "Life Cycle Cost Assessment of Offshore Wind Farm: Kudat Malaysia Case," Sustainability, MDPI, vol. 13(14), pages 1-14, July.
    14. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    15. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    16. Schlör, Holger & Venghaus, Sandra & Hake, Jürgen-Friedrich, 2018. "The FEW-Nexus city index – Measuring urban resilience," Applied Energy, Elsevier, vol. 210(C), pages 382-392.
    17. Mollik, Sazib & Rashid, M.M. & Hasanuzzaman, M. & Karim, M.E. & Hosenuzzaman, M., 2016. "Prospects, progress, policies, and effects of rural electrification in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 553-567.
    18. Obsatar Sinaga & Mohd Haizam Mohd Saudi & Djoko Roespinoedji & Mohd Shahril Ahmad Razimi, 2019. "The Dynamic Relationship between Natural Gas and Economic Growth: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 388-394.
    19. Asongu, Simplice A. & Odhiambo, Nicholas M., 2021. "Inequality, finance and renewable energy consumption in Sub-Saharan Africa," Renewable Energy, Elsevier, vol. 165(P1), pages 678-688.
    20. Shirzad, Mohammad & Kazemi Shariat Panahi, Hamed & Dashti, Behrouz B. & Rajaeifar, Mohammad Ali & Aghbashlo, Mortaza & Tabatabaei, Meisam, 2019. "A comprehensive review on electricity generation and GHG emission reduction potentials through anaerobic digestion of agricultural and livestock/slaughterhouse wastes in Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 111(C), pages 571-594.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:10:y:2017:i:8:p:1114-:d:106443. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.