Malaysia has unveiled new guidelines for the Corporate Renewable Energy Supply Scheme (CRESS) to assist companies in sourcing renewable energy. This scheme allows businesses in Malaysia to purchase green electricity directly from renewable energy developers (REDs) through open access to the electricity grid. The goal is to help Malaysia address climate change and reach a renewable energy target of 70% by 2050.

Introducing the Corporate Renewable Energy Supply Scheme (CRESS)

The CRESS program is part of PETRA’s GREENS MADANI Initiative, designed to support the transition of high-priority sectors to renewable energy. The initiative is focused on enhancing corporate options for reducing carbon footprints through green electricity.

Under the CRESS guidelines, companies can establish agreements with REDs to supply renewable electricity to their operations. This energy will flow through the national electricity grid managed by the Electricity Utility Company (EUC), ensuring a smooth transfer of green electricity between the REDs and the companies.

The government is urging companies to participate in CRESS to meet their environmental sustainability goals, particularly those with environmental, social, and governance (ESG) commitments. This initiative builds upon previous programs like the Corporate Green Power Program (CGPP) and large-scale solar power plants. CRESS enables companies to sign physical power purchase agreements with REDs, allowing for more direct involvement in green energy procurement.

Guidelines for Participation in CRESS

In line with the target for CRESS to commence this month, the Energy Commission (‘Commission’) had on 20 September 2024 published the Guidelines for Corporate Renewable Energy Supply Scheme (‘CRESS Guidelines’). Renewable energy developers must register their projects and declare their energy output. While they can serve multiple companies, the energy supplied must align with the registered amount. Companies, referred to as Green Consumers, must meet certain eligibility criteria to partake in the scheme.

The CRESS Guidelines set out the regulatory framework and requirements for participation in CRESS, and are effective from 20 September 2024. 

CRESS FRAMEWORK

It is pertinent to note that a dedicated connection between the green energy plant (‘Plant’) and the corporate consumer (‘Consumer’) is not allowed. Instead, CRESS will utilise the existing New Enhanced Dispatch Arrangement (‘NEDA’) framework whereby electricity generated will be exported to the grid operated by the Grid System Operator. Electricity generated by the Plant will therefore be wheeled through the grid system to the Consumer.

A system access charge will be imposed by the Single Buyer on the Renewable Energy Developer (‘RED’) for purposes of recovering the cost of the network infrastructure and other necessary charges incurred in the delivery of electricity from the RED to the Consumer. The system access charge that has been set is 25 sen/kWh for firm output and 45 sen/kWh for non-firm output.

ROLE AND RESPONSIBILITIES OF PARTIES

Applications for participation in CRESS may be made to the Single Buyer from 30 September 2024 onwards. The RED is responsible for submitting the application on behalf of the Consumer(s).