Minister Pooh-poohs Power Shortage Talk

tak paham plak aku camana leh ada inconsistent statement between minister dgn MD khazanah nasional ni ek....kena tanya ir knizam at work la camnih

KUALA LUMPUR: The Ministry of Energy, Water and Communications has dismissed suggestions that the country will face a shortage of electricity by 2012 due to a structural problem in the industry.

Its minister Datuk Shaziman Abu Mansor said that Tenaga Nasional Bhd (TNB) has more than enough power and has been bogged by high reserve margins.

“Malaysia has sufficient power. In fact, TNB has more than enough power to supply the country. They have been complaining that the capacity charge has burdened them because they have to pay for unutilised power and that’s why we plan to bring down the reserve margin to around 20% in the next five years,” Shaziman told The Edge Financial Daily recently.

He said that the reserve margin would increase from the current 42% to 47% upon the completion of Jimah Power’s plant in Port Dickson next year. The coal-fired plant with a capacity of 1,400 megawatts (MW) will add to the country’s total installed capacity of more than 20,000 MW. A reserve margin of 47% means that almost half of the capacity lies idle.

Shaziman said that a committee in the ministry, Jawatankuasa Bekalan Elektrik, reviews the energy demand every six months and it was aware of the power supply situation in the country.

“With what we have now, even though we do not do planting, we will have sufficient power supply even until 2013. The only thing we need to do is to strengthen our transmission lines if we are to bring down our reserve margin to 20%. It is not alarming at all,” Shaziman said in response to a recent statement by Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar that the structural problem in the industry may result in a power shortage by 2012.

Describing the structural problem as a “time-bomb”, Azman said it could result in a power shortage and alluded that it could possibly cause the collapse of TNB.

The structural problem is that TNB is unable to pass on the full cost of generating the energy to consumers while it pays the full rate to independent power producers under the cost-pass-through formula. The problem is particularly telling now as TNB’s dependence on power from coal-fired plants is increasing because of the lack of natural gas.

Tenaga buys the coal at market prices but is unable to pass on the full cost to consumers.

Industry observers concur with Shaziman, saying they do not foresee any power shortage in the country.

“There are more projects coming up to provide power to the country, such as Jimah, Bakun Hydroelectric Dam as well as the upgrading of the Tuanku Jaafar Power Station in Port Dickson. Where is the shortage?” Shaziman asked. The Port Dickson plant is capable of generating 750 MW.

In addition, TNB has plans to build two hydroelectric power plants in East Malaysia.

“TNB is going to call for tenders. Also, because of the global economic slowdown, the demand for power will drop. With the government’s effort to bring down the reserve margin by 2012, I really don’t see any possible power shortage,” he said.

Demand for power grows in tandem with the economic growth of a country. Typically, the demand growth is 8% when economic growth is healthy. But considering that the economic growth is only expected at 4% next year, demand is also expected to come down.

Shaziman said the ministry’s only concern was to get a viable energy fuel mix for generation, with emphasis on hydropower.

“We will be bringing in 2,000 MW (of power) from Bakun (hydroelectric) project, and there is no urgency to plant up new coal plants,” he said.

He expected hydropower to play a more prominent role in the country’s generation mix, with its share expected to increase from 5% this year to 35% in 2030 in the peninsula. Apart from hydropower, electricity is also generated in coal- and gas-fired plants.

“By 2030, we estimate that hydroelectricity will account for about 35% of our generation mix,” Shaziman said. Among the projects coming onstream by then are the Murum dam (940 MW), Baleh dam (950 MW) and Pelagus dam (770 MW) in the upper reaches of the Rejang River in Sarawak.

“The Sarawak state government has already awarded the construction of the Murum dam to a successful bidder with an expected completion date of 2013. For the Baleh and Pelagus dams, feasibility studies are being conducted,” Shaziman added.

The power from Sarawak is to be transmitted to the peninsula via a multi-billion-ringgit submarine cable, construction of which has yet to begin.


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