Datuk Seri Che Khalib Mohamad Noh ... ‘Expanding the Manjung facility would be the logical thing to do.’ PETALING JAYA: Tenaga Nasional Bhd (TNB) is undertaking studies to expand the generation capacity of its coal-fired power plant in Manjung, Perak, to ensure that its electricity reserves margin does not drop below 20% by 2016, said president and chief executive officer Datuk Seri Che Khalib Mohamad Noh.
“If power generated from Sarawak Hidro Sdn Bhd does not come in time, we will need additional sources of energy in 2015. So, expanding the Manjung facility would be the logical thing to do.
“We are doing this in anticipation. We have no choice but to start planning now. If we don’t do the plant-up in time, it will be too late come 2016,” Khalib told StarBiz in a phone interview.
TNB is supposed to lease the Bakun Hydroelectric Dam via Sarawak Hidro.
Khalib said if Sarawak Hidro did not deliver come 2015, and there were also no new sources of energy, TNB’s reserves margins would drop to below 20% by 2016.
He said the safety margin for TNB’s electricity reserves margin should be not less than 20%.
Meanwhile, Bernama quoted Khalib as saying that the consultant for the preliminary study of the plan would be appointed this week and the study would take six months.
Analysts aren’t surprised with the development plan for the Manjung plant, which is owned by TNB subsidiary TNB Janamanjung Sdn Bhd. In fact, they believe there will be other coal plant expansion, possibly at Tanjung Bin in south Johor and Jimah in Negri Sembilan.
Coal seems to be the best alternative to meet TNB’s electricity demand as it is still considered a relatively affordable commodity. While gas may be a cleaner form of energy, it will continue being in short supply until the liquefied natural gas regasification plant is built in 2013.
“Even then, if gas is bought at international prices, gas-fired (power) generation will cost more than coal-fired generation and TNB may prefer new coal generation,” said OSK Research Sdn Bhd research head Chris Eng.
Meanwhile, the construction cost of a hydropower plant is very high. It was reported that TNB is seeking to increase the Manjung plant’s capacity by 2,000 MW (1,000 MW x 2) from its current capacity of 2,100 MW (700 MW x 3), at an estimated cost of at least RM6bil to RM7bil.
“If this piece of news had broken a year ago, we would have been sceptical, given the big plans to bring Sarawak’s hydropower to Peninsular Malaysia via the Bakun Energy Transmission Grid,” said Eng.
Another power analyst said that while TNB currently had sufficient reserves margin, it still needed other sources of energy.
At present, only the 250 MW Ulu Terengganu and 372MW Ulu Jelai hydropower dams are scheduled to be operational in 2014 or 2015, and these will not be sufficient.
The power analyst added that Bakun’s first undersea cable was expected to be ready in 2015, and the second in 2017.
“If the cable breaks down, what will happen to the electricity supply? Given the uncertainty, it isn’t too surprising that TNB is expanding the coal plant,” he said.
Given the rumoured scale of the coal plant expansion, Eng believes that even if tenders were called next year, the plant can only be completed in 2014. By then, the first-generation independent power producers (IPPs) will be close to their expiry of power purchase agreements (PPA) in 2015 and 2016.
As Janamanjung is now structured as an IPP, Eng believes that a fourth-generation PPA will be signed with TNB if the expansion goes ahead.
TNB will release today its second-quarter results to Feb 28.
The Star 20 April 2010