Wednesday May 26, 2010
This is despite the decision for Bakun dam’s power to remain in Sarawak
PETALING JAYA: Sarawak Energy Bhd (SEB) is exploring the potential for long-term transmission of hydro power from Sarawak to Peninsular Malaysia.
Apart from the supply from Bakun dam, which will be used in Sarawak itself, other sources of hydro power can also be tapped from sites with a combined capacity of 20,000 MW.
“SEB needs to establish the right pricing for hydro power that should be more competitive compared with that from coal-fired plants,’’ an industry source said, adding that SEB’s plans would be more relevant post-2017.
Tenaga Nasional Bhd (TNB) has been reported to be studying the possibility of expanding its Manjung plant in Perak to generate more power by 2015.
Datuk Seri Che Khalib Mohamad Noh ...
"If it makes financial and technical sense to bring power from Sarawak, we will consider it."
“Against economic growth of just 4%-5% per year, the potential for growth in electricity demand in Peninsular Malaysia is huge,’’ said the industry source. For the first half of its financial year ended Feb 28, 2010, peak demand hit 15,072 MW against installed capacity of 22,000 MW, which was higher than projected.
When contacted, TNB chief executive officer Datuk Seri Che Khalib Mohamed Noh said: “If it makes financial and technical sense in the future to bring power from Sarawak, we will consider it. However, there is no concrete proposal for us (at this juncture) to look into.’’
According to reports, pre-feasibility studies have been conducted at some of the potential sites in Baleh, Baram and Limbang in Sarawak. However, the approach will be demand-based with commitment from offtakers.
The management of environmental issues is likely to be handled by a specific department set up by SEB.
Regarding the power talks between SEB and Sarawak Hidro Bhd, the owner of the Bakun dam, the source said discussions were ongoing and the details on pricing was targeted to be ready by the end of the third quarter.
Basically, both parties aimed to reach a compromise on the internal rate of return (IRR), which is the rate of return on investment taking into account the net present value of money, for the Bakun project.
Based on calculations using a lot of financial models, the cost of power to SEB should be less than 10 sen per kWh.
“Anything below 10 sen per kWh should be competitive based on long term pricing,’’ said an analyst, adding that lower prices may be obtained elsewhere but with certain conditions.
Apart from the Bakun dam, hydro power can be tapped from 52 sites in Sarawak
The payment of a carbon tax and guarantee of long term contract are potential issues in countries like Australia and Africa.
Accessibility to markets mostly in Japan and China is another factor.
“Sarawak’s tariff price may not be the lowest but most competitive when viewed from many aspects,’’ said the industry source. “Electricity cost may be one of the biggest cost components for aluminium smelters but they should not just look at things in isolation.’’
Reports have indicated that smelters wanted cheaper power from Bakun Dam, as transmission costs from the dam would have to be included.
