NEM NOVA expected to be well accepted by the industries

By JOHARDY IBRAHIM
editor@dagangnews.com

KUALA LUMPUR 4 May - The introduction of NEM NOVA, a solar energy-centric net energy metering initiative for non-domestic consumers of Tenaga Nasional Berhad (distribution licensee) is expected to be accepted positively by the  consumers in the commercial, industrial, mining and agriculture industries.

According to a note by Skrine, a prominent law firm, `there is no denying that NEM NOVA is a step forward for Malaysia's goal of shifting consumption towards renewable energy'. 

"Given that corporations are increasingly placing importance on environmental, social and corporate governance goals, it seems likely that, notwithstanding the cost factors outlined above, non-domestic consumers will react positively to NEM NOVA," it said.

In the note which was published in the International Law Office web site, Skrine said the concept of virtual aggregation is unique.

"In that it gives non-domestic consumers the opportunity to not only obtain credits for energy generated by their installation, but also contribute those credits to the billing accounts for other non-generating premises.

"This may enable them to cover electricity usage for more than one premise and lower their operating costs," the law firm added.

There are two key financial considerations for participating in NEM NOVA, said Skrine that are:

1. The virtual aggregation will apply only for the first 10 years, after which generation by the installation will be solely for self-consumption. This means that after the 10-year period, only the premise on which the installation is located will reap the benefits of any offset; designated premises will cease to enjoy a reduction in their electricity bills.

2. The offset under NEM NOVA is not on a one-to-one basis as is the case for the NEM Rakyat and NEM GoMEn initiatives. Instead, the offset will vary depending on the prevailing market price.

Under NEM NOVA, a non-domestic consumer (NOVA consumer) will install a solar photovoltaic installation in a premise that it uses or occupies. Such installation should be designed primarily for self-consumption.

However, any excess energy that is not consumed by the NOVA consumer at its premise due to operational constraints or a variation in load demands may be exported to other designated premises by way of the distribution licensee's distribution system or the grid owner's transmission system ('supply system').

A total capacity of 300MW is available under NEM NOVA. Applications for quota allocation can be made from 1 April 2021 until 31 December 2023.

On 1 April 2021 the Energy Commission published the Guidelines for Solar Photovoltaic Installation Under Net Offset Virtual Aggregations (NOVA) Programme for Peninsular Malaysia (NOVA guidelines).

The NOVA guidelines set out the framework and requirements of the NOVA initiative of Malaysia's Net Energy Metering 3.0 Programme (NEM NOVA). Industry players have eagerly awaited such details, particularly following the introduction of virtual aggregation.

The release of the NOVA guidelines also serves to complete the trilogy of initiatives under NEM NOVA, which the government announced in December 2020. - DagangNews.com