1% levy and 6% GST to fuck the Rakyat and to enrich the Government

Policy implemented after years of studies

The Energy, Green Technology and Water Ministry wishes to clarify that the implementation of the feed-in tariff (FiT) was not carried out in a rush, the decision was made after years of studies on the most effective renewable energy policies practised around the world.

Among the many forms of renewable energy policies, FiT has been empirically proven to be the most effective renewable energy (RE) policy in the world today provided the design of the FiT takes into account local contextual factors.

According to the REN21 report, as of 2011, more than 80 jurisdictions worldwide have or are still having FiT which is the most widely engaged RE policy for many countries such as Germany and Thailand compared with other RE policies such as Renewable Portfolio Standards, Renewable Energy Standards, net metering etc.

Perhaps it may help readers to understand that firstly, energy generation has never been free of Government support since the birth of the country where in 2009 energy subsidy cost a whopping RM23.50bil. The cost of electricity is maintained artificially low although a country which is rapidly reaching a developed country status should have citizens matured to be responsible to pay electricity at market rate.

This is part of the subsidy rationalisation programme undertaken by the ETP of Pemandu which requires the gas price to be reviewed (by RM3/MMBTU) and electricity tariff (by RM 0.016/kWh) every six months.

The country cannot rely on fossil fuel for energy generation because it is fast depleting and subsequently the cost of such fuel is on the rise.

In addition, the need to mitigate climate change as a result of excessive burning of such fossil fuel is gaining importance because global warming has reached a state of crisis.

In order to ensure energy security and autonomy, there is a need to provide an equal playing field for the choice of energy mix. The choice of going into alternative forms of energy generation should take into consideration the full life cycle cost, inclusive of cost of externality.

In addition, in July 2009, the ministry launched Green Technology as the new economic driver, thus the choice of alternative energy sources is inevitable.

The FiT rates for different RE resources are carefully designed as the rates must be high enough to produce a return on investment, plus reasonable profit (not excessive) to act as an incentive.

The level of the FiT rate applicable to RE plants installed in the future will decrease with time, according to annual degression rates which occur at the start of each new calendar year.

Thus, RE installations/plants commissioned in later years will have lower FiT rates.

The basis of the degression rate is that the cost of RE technologies, just like any other technology, is expected to drop as the technologies mature.

FiT addresses two primary economic issues faced by many countries:

> Employment and gross national income via RE industry growth Malaysia is poised to chart the path of robust economic growth through the adoption of green technology businesses.

> Energy security and climate change mitigation. The FiT also provides solutions to tertiary issues concerning social health, empowering and providing fairer wealth distribution to citizens and the community, and environment conservation. All these are achieved without putting a strain on the Government’s budget and spending.

The question that is often posed is “who will pay for the FiT”?

The most common method for funding the FiT involves sharing the costs amongst end-users of electricity (electricity consumers).This method would result in a very small increase in the price of electricity paid by consumers, but at the same time the consumers may benefit from revenue derived from RE generation.

In this respect, FiT is not a subsidy but a cost pass-through mechanism for renewable power generation.

The FiT in Malaysia is not financed from tax revenue. Instead, the FiT will be financed by a RE Fund which is derived by passing the FiT cost to final electricity consumers.

However, the passing of this cost is limited to only 1 % of the total electricity tariff invoices issued by the distribution licensees (e.g.Tenaga Nasional Bhd).

Nonetheless, 75% of the distribution licensee’s customers who consume less than 300 kWh per month will be exempted from contributing to this RE fund. Therefore, heavy consumers of electricity would contribute more to the RE fund.

In conclusion, the four main reasons for FiT superiority (source: Mendonca, Jacobs, Sovacool. 2010) are as follows:

> FiT is able to drive down capital costs and achieve RE technology price reduction much faster compared to other RE policies;

> FiT promotes a diversified portfolio of technologies and industrial sectors. Unlike other RE policies which instigate price competition among RE technologies, FiT encourages harmonious growth of a variety of RE technologies which are in congruence with the country’s indigenous RE resources.

> FiT minimises electricity costs in two ways: the guaranteed tariff lowers the risk of RE investment and, therefore reduces the cost of capital investments.

In addition, the degression feature of the FiT reduces opportunistic windfall profits and encourages efficiency, as well as lowers manufacturing costs over time; and

> FiT encourages market competition among manufacturers in lowering RE technology pricing, leading to better market conditions for RE investors to build and deploy RE projects.

Lastly, the decision to go for the FiT involved many sessions with local and international stakeholders from other ministries, government agencies, RE industry, financial institutes, RE investors, members of the public and FiT experts from other countries over the past two years.

MINISTRY OF ENERGY, GREEN TECHNOLOGY AND WATER RESOURCES,
Putrajaya.

***************************************************************************************************

The Ministry of Energy, Green Technology and Water Resources claimed that a new charge of 1% levy for consumers who use above RM77 electricity per month is fair, as this was done after several years of studies. Since when do any Ministries ever do a proper search and studies. Everything as shown in the latest Audit report that money are spent to the whims and fancies of the leaders. The word and meaning of ACCOUNTABILITY is not known to the ruling Government. Everything is about how much money can go into their deep pockets.

This levy charge will be implemented on 1st December 2011. As if that is not enough the 6% GST will be implemented on January 5th, 2012. So you see the Rakyat are the biggest suckers.

Since there were many objections against the increase of sugar, fuel, rice etc...........the Government has now got smarter by coming out with this 1% levy and 6% GST. So even if you want to save by eating at home or stop going to cinemas etc... you still have to pay more after this. So there is no way one can cut cost unless one decide to forgo electricity, watch TV or even using the phones. Everthing is 7% up. So will it not affect everything around you and the food you eat. Not surprising even your transport fare will be affected.

So you see this prove that the Government has NO MONEY and is ADAMANT in scrapping every sen from the Rakyat to pay for the 13th General Election which Najib is maintaining a budget of not RM300 million as claimed by a Minister recently but RM5 Billion to wipe off the opposition. Najib realizes that this is the last poker game he gets to play and had said, "we must strike fear among our opponents like putting the party in the war footing to face the 13th General Election, if we're to use war as an analogy."