Govt introduces CGPP, aims for more companies to use green energy - Takiyuddin

Energy and Natural Resources Minister Datuk Seri Takiyuddin Hassan said the CGPP would enable corporate companies operating in Malaysia to achieve their Environmental, Social and Governance (ESG) commitments through the Virtual Power Purchase Agreement (VPPA) mechanism with a total quota of 600MW.

"It is also capable of maintaining existing companies, as well as attract other international companies to invest in Malaysia," he said when announcing the programme here today.

Previously, companies in Malaysia could fulfill their commitment to use green electricity through the Net Energy Metering (NEM) and Self Consumption (SelCo) programmes.

Apart from that, he said, companies could also purchase the Renewable Energy certificates (TBB) or subscribe to the Green Electricity Tariff (GET).

Takiyuddin said under the CGPP programme, eligible corporate companies could enter into a Corporate Green Energy Agreement (PTHK) with solar energy generators for the sale and purchase of Renewable Energy (RBE) virtually with mutually agreed terms and conditions.

PTHK is a two-way financial hedge agreement detailing a pricing structure agreed between a corporate company and a solar power generator based on the value or financial benefits available through the reduction of greenhouse gas (GHG) emissions derived from solar power generation.

"The signing of a financial hedge contract between a corporate company and a solar power generator will enable the generator to participate in the electricity market operated by a Single Buyer through the New Enhanced Dispatch Arrangement (NEDA) mechanism," he added.

He said the agreement would reduce the risk borne by solar energy generators due to fluctuations in electricity market prices; and enable corporate companies to get a virtual supply of green electricity at a fixed price for a long period.

Takiyuddin said the company would also obtain a Renewable Energy Certificate (REC) from solar power generators to increase its ESG commitment.

He said applications for participation in the CGPP programme would open from Nov 7 Dec 31, or until all the quotas were distributed.

To ensure transparency in the evaluation of the applications, Takiyuddin said a Special Evaluation Committee comprising representatives of the ministry, the Energy Commission and the Single Buyer Department would be established.

"All solar energy generators approved for implementation under this programme must be completed and to start operating by 2025 at the latest," he added.