Now comes news that Tenaga is planning two new hydroelectric plants in Terengganu and Pahang (see report below).
Doesn’t this fly against the justification for the laying of submarine cables to transmit electricity from the Bakun Dam in Sarawak to the peninsula – that there would be no need for expensive new capacity on the peninsula?
Energy Minister Peter Chin said last month that the Cabinet had agreed that opting for the Bakun submarine cable project would be better than continuing to build new power plants in the peninsula. “In the long term, it will be more economical and viable to transmit power from Bakun to Peninsular Malaysia even though the undersea cable project will be very costly,” he said.
So, what’s going on? Was Peter Chin unaware of these two new dams in the peninsula – or was he simply having us on?
Malaysia has more than 50 per cent in excess power capacity. Can we really believe that this excess capacity will drop to 25 per cent by 2013 if no new capacity is added, as Tenaga forecasts?
Even if it drops to 25 per cent, isn’t that adequate for our needs especially as the government is now trying to increase the services component – which doesn’t consume as much electricity as manufacturing – of the economy.
Already, extensive logging is being carried out at the site of a new 212MW dam in Kuala Berang, Terengganu. See report here.
Is this another manifestation of a disease afflicting the country which we can ill-afford: construct, pocket the profits of construction (and of logging), and leave the people with humongous white elephants or worse?
This from the Business Times/Bloomberg:
Meanwhile, Tenaga will invite bids next month for the construction of two hydroelectric plants valued at RM2.8 billion.
Five groups, including companies from Europe, Japan and China, have pre-qualified to bid for the hydro plants in Pahang and Terengganu states with a combined capacity of 500 megawatts,
Tenaga expects to announce the winner by the end of the year for building to start in 2010, he said.
The state-controlled utility, with annual generation capacity of 11,942 megawatts, needs to secure supply as it predicts its excess capacity to drop to 25 per cent by 2013 from more than 50 per cent now, Che Khalib said.
“The current capacity can take us up to 2013, 2014,” said Che Khalib. “By then new capacity will be needed.”
The two plants would add to the 2,400-megawatt hydroelectric dam being built in Sarawak on Borneo, planned to start operating in 2010.
The Bakun hydroelectric project, which will flood an area the size of Singapore in the rainforest interior of Borneo, was revived in 2001 after being postponed twice, once because of the Asian financial crisis of 1997-98.
Tenaga, which expects to own 40 per cent of the sub-sea cable project to transmit the electricity from Bakun to peninsular Malaysia, plans to invite international bids for the construction of the cables in early 2010, Che Khalib said.
Sarawak Energy Bhd and the Ministry of Finance are the other two shareholders of the project.
“We will require about six months for the evaluation” of the bids, he said. Based on his calculation, the physical works would start in 2011 and the first line would be completed in 2015. As much as 1,600 megawatts of electricity will be transmitted to the peninsular from Bakun, Che Khalib said.
About 30 per cent of the project may be funded by equity, which Tenaga will pay by cash, and the rest by ringgit debt, he said. Tenaga will start raising borrowings to fund the power transmission project in the middle of 2010, he said.
The first debt issue would be to cover the cost of the first stage of the project in the first two years, Che Khalib said. “We won’t do it all in one go” in order for the local market to be able to absorb it, he said, declining to disclose any figures.- Bloomberg