TRACK 4A PROJECT: Tenaga planning technologies that will lower Johor power plant’s operational cost
TENAGA Nasional Bhd (TNB) is in the midst of finalising a proposal to the Energy Commission (EC) featuring technologies that will be able to lower the cost of operating the Track 4A power plant in Pasir Gudang, Johor.
“We have signed a heads of agreement with SIPP Energy Sdn Bhd in July and we have one more month to finalise our proposal to the EC so that discussions can proceed in regards to this contract,” TNB president and chief executive officer Datuk Seri Azman Mohd told Business Times on the sidelines of the Global Economic Symposium Kuala Lumpur 2014 (GESKL), here, yesterday.
“The proposal will mainly concentrate on coming up with new technologies that could help lower the operational cost of the new plant. It is still being developed and once submitted, it would be up to the EC to decide,” he said.
The Track 4A project has been in the spotlight since the EC announced that a three-party consortium led by SIPP Energy with the participation of YTL Power and TNB had been conditionally awarded the contract to build a new 1,000MW-1,400MW combined cycle gas turbine (CCGT) power plant in Johor.
The EC conditioned that the tariff for the contract should be comparable to the 34.7 sen per kilowatt-hour tariff that TNB had offered for the 1,071MW Prai CCGT power tender which the latter had won in 2012.
The award raised eyebrows as it was a departure from the EC’s practice of conducting competitive bidding for the building of new power plants.
This drew criticisms and the subsequent withdrawal of YTL Power from the project on June 19.
Earlier reports had indicated that TNB was not keen in being awarded the tender.
“TNB finds itself stuck between a rock and hard place when it comes to the Track 4A contract. To agree with the deal will mean a high operational cost for the utility firm, one that it does not need to undertake ... but to reject the offer would mean to incur the wrath of its partner SIPP Energy,” said a source close to deal recently.
The power plant is scheduled to be operational in June 2018.
Meanwhile, in his GESKL panel discussion, “Bringing Electricity to the Poor”, Azman noted that Malaysia is one of the most successful countries to bring electricity to the poor because of the government’s centralised efforts through the Economic Transformation Programme (ETP): Phase 2.
“As of now, 98.8 per cent of Peninsular Malaysia has been fully electrified, while electricity supply to Sabah and Sarawak stands at some 82.2 per cent. Under the ETP Phase 2, TNB will increase it to 99 per cent, if not 100 per cent, for Peninsular Malaysia and 95 per cent for Sabah and Sarawak by 2020.
“I believe this is achievable given our centralised grid network as well as openness in embracing renewal energy such as solar for outlying areas, where it is too expensive and difficult for the traditional grid to reach,” Azman said.
This is the first time the GES, established in Germany in 2008, is being held in Asia. The three-day event features 176 speakers and 700 delegates from 11 countries.