Malaysia

1Malaysia Development Bhd had acquired Tanjong Energy for US$2.81 billion.

RHB Bank and RHB Investment Bank will jointly raise RM1.38 billion to part finance the development, construction and operation of a new coal-fired power plant in Tanjung Bin, Johor. The 1,000 Megawatt power plant, which requires total financing of more than RM6.0 billion, is managed by Tanjung Bin Energy Issuer Bhd, a subsidiary of Malakoff Corporation Bhd. Malaysia's energy demand is projected to grow at 3.4 per cent, annually, given the large number of big-scale infrastructure and construction projects proposed under the 10th Malaysia Plan, said RHB in a statement today. It said with the addition of the coal-fired power plant in Tanjung Bin to the grid, along with the inclusion of other power plants that are due soon, electricity reserve margin was expected to be maintained at an acceptable level. "We are proud of the RHB Banking Group's ability to assist Malakoff in the financing of such an esteemed project that is of national significance," RHB Bank Corporate Banking Division director Mike Chan was quoted as saying in the statement.

Malaysian tycoon Ananda Krishnan's sale of over $3 billion worth of power assets has attracted 12 initial bids with a final round of bidding expected by end of March.

The construction of 12 hydroelectric dams in Sarawak is being opposed by an international NGO coalition.

Alstom as part of a consortium will build a  supercritical coal-fired power plant Malaysia under a $1.10 billion deal.

Tenaga Nasional Berhad's Board of Director's will soon name its new boss.

Bosch will continue the construction of the solar energy plant in Penang, Malaysia at a later date.

Tenaga Nasional Bhd is targeting to develop a 1,400-megawatt coal-based power plant in Cox's Bazar, Bangladesh worth US$2.5 billion.

Malaysia next month will announce a shortlist of companies vying to build a series of more efficient combined-cycle power plants throughout the country.

Nazery Khalid assesses efforts in the shipping sector to go green

Malaysia will increase the percentage of electricity generated from renewable energy to 5.5 per cent from the less than one per cent currently.

Will all the efforts to reduce dependence on thermal energy sources bear fruit or go in vain?

Tenaga Nasional Bhd (TNB) has made it easy for customers to apply for electricity supply with the launch of its on-line service called e-Application. Aimed at improving efficiency, the e-Application can also be used to help customers monitor the status of their applications and verify documents. "It will quickly allow customers to decide on any follow-up action, if necessary, to speed up the application process," TNB said in a statement. TNB chief operating officer and chief executive Datuk Azman Mohd was quoted as saying that the system would assist developers in mananging their request for electricity supply and this would help TNB in planning for the future. E-Application will also facilitate the sharing of information with registered contractors with valid licences from the data base of the Energy Commission. Customers can also select contractors via the online service hence eliminating the risk of engaging unauthorised contractors. The e-application system will be fully implemented by housing developers beginning January 1.

While Tenaga Nasional Bhd (TNB) still faces an erratic gas supply problem, a silver lining may emerge with the coming onstream of 4,500 megawatts (MW) by 2016. In fact, it might be boom years again for the power engineering business in the second half of 2012 and 2013, said OSK head of research Chris Eng. “The replacement of the first generation power purchase agreements (PPAs) with new contracts should be positive in the longer term for both the independent power producers and TNB, although the impact would only be felt in 2016,” he said. “With the gas price hike postponed and gas supply still erratic, we have cut TNB's earnings forecast in the short term. However, the new PPAs coming into force may lead to its capacity payment rates dipping in the long term,” he said. “TNB is a clear-cut post election play as it will likely get to enjoy more tariff hikes and most importantly, a coal cost pass-through after the general election,” he said. While the official reserve margin still stands at above 35%, the shortage of gas and the aging the power plants mean that the country's actual reserve margin is probably significantly lower. “As the first generation PPAs expire from 2015 to 2017, it would be crucial to start the competitive bidding process now to ensure that the new plants are ready by 2016. Without these new plants, Malaysia's reserve margin is likely to drop to 10% by August 2017,” he said. According to him, re-negotiation of the first generation PPAs had ground to a halt because TNB did not see the need to offer the first generation independent power producers (IPP) a discounted cash flow positive deal. There is, therefore, some 4,105MW of first generation capacity expiring between 2015 to 2017. Even with the expansion of 1,000MW at Janamanjung and another 1,000MW at Tanjung Bin, the country is short of 2,105MW of power, not to mention the expected growth in electricity demand. “With Bakun power in no way headed for Peninsular Malaysia, it would appear that we are on the cusp of a power plant building frenzy. This is reminiscent of 1993 when the first generation PPAs were first awarded and it was contracts aplenty for power engineers in Malaysia,'' he said. While all five first generation IPPs had actually submitted proposals for renegotiation of their PPAs, Eng viewed that Genting Bhd and Sime Darby Bhd might be less interested this time around, given the cessation of talks and the invitation for fresh PPA bids. “Genting has indicated that it is keen to sell its power assets and is left with only the 720MW Genting Sanyen CCGT in Malaysia while Sime Darby only owns the 440MW open cycle gas turbine (OCGT) peaking plant in Port Dickson. “The more serious bidders are likely to be MMC (with an effective generation capacity of 5,020MW of 23% of the peninsular's generation, Tanjong (440MW via Powertek and 720MW from Panglima Power) and YTL Power (1,202MW in Paka and Pasir Gudang),” he said. Overall, the industry is still faced with a shortage of gas supply but an erratic supply of gas had been flowing through the Bekok C bypass platform since September. Eng noted that there were days when TNB received less than 1,000 million metric standard cubic feet per day. Factoring in these issues, TNB's earnings forecast has been pared down by 13% for 2012 and 4% for 2013 by the research house. Meanwhile, Maybank Investment Research said there would still be challenges as gas supply was still low, which meant that TNB would still incur a hefty alternative fuel cost bill in the first quarter of 2012 for the supply shortfall.

The Energy Commission (EC) says it expects the competitive bidding process for the 4,500 megawatt (MW) power-generation capacity to involve a combination of new and existing power plants. An EC official told StarBiz that the competitive bidding process was still in its early stage of inviting prospective bidders to register their interest, and that the power regulator was still working on the details of the plan. Nevertheless, he confirmed reports that the EC was targeting to have a total of 4,500MW power-generation capacity to come in through the bidding process. This, he said, was to replace the capacity of the first generation power-purchase agreements (PPAs) and to cater to future demand. “Basically, what we're looking for are players who can offer us the least cost,” he said, in response to queries about EC's notice on Tuesday calling for prospective bidders for the development of a gas-fired power plant in Peninsular Malaysia. Chin says more energy needed to meet future demand. The EC had said in the notice that the power plant was to sell its capacity and energy to Tenaga Nasional Bhd (TNB) under a new PPA. The site or sites would be made available by the EC, or alternatively, prospective bidders could propose new sites for EC's consideration. According to Energy, Green Technology and Water Minister Datuk Seri Peter Chin, 4,500MW more of gas-based power generation would be required by 2017 to replace retired capacities and meet future energy demand in the peninsula. The first generation PPAs, accounting for around 4,100MW of gas-based generation capacity, would be expiring in 2015 or 2016. TNB had in recent weeks announced that the first generation PPAs, involving YTL Power Generation Sdn Bhd, Segari Energy Ventures Sdn Bhd, Port Dickson Power Sdn Bhd, Powertek Bhd and Genting Sanyen Power Sdn Bhd, would not be renegotiated and would be allowed to lapse. Adding to the future power supply pressure in the country was the expected growth of electricity demand by an average of 4% per year in the next five to 10 years. While the independent power producers (IPPs) under the first generation PPAs would see their contracts lapse, TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh had recently said they could still participate in the bidding process for new licences that would be held by way of open tender. TNB, which had been facing an increasing challenge of rising fuel costs that ate into its profit margin in recent years, had for years been subject to high-capacity payments to IPPs under the existing PPAs, especially the first generation ones that were signed in the mid-1990s. Under the deal, the national power company was obliged to pay relatively “high” fixed charges to IPPs for the supply of their power-generation capacity, regardless of whether it was fully utilised. It appeared, therefore, the terms and conditions of the PPAs had always tilted strongly in the IPPs' favour. “The idea to allow the first generation PPAs to lapse is to pave the way for an open-tender process and more competitive pricing for TNB,” an analyst said. “It is clear why TNB prefers to have an open-tender process. For one thing, it would push players towards greater efficiency and result in lower input prices for the supply of power, both of which would benefit TNB, and ultimately, consumers,” he explained, while noting the fact that it was very difficult for TNB to increase the selling price of electricity to end-users, as the prices were currently controlled by the Government. here