Five power purchase agreements extended

KUALA LUMPUR: The Energy Commission (ST) has extended five power purchase agreements of three independent power producers (IPPs) in order to ensure continuous supply of electricity, said its CEO Datuk Ahmad Fauzi Hasan.
"We have already received approval from the ministry to extend several plants totalling 2,915 megawatts (MW), which expired last year, until 2017. These have been extended for various periods, from one year to 10 years. This involves quite a bit of capacity for us to go forward to cover and to give insurance to the system and we will consider further extensions," he told reporters at the 6th National Energy Forum 2015 yesterday.
The extensions were given to Genting Sanyen (expiring in 2016) for 675MW, Segari (2017) for 1,303MW, TNB Pasir Gudang (2017) for 275MW, TNB J. Connaught (expired in 2014) for 300MW and TNB J. Connaught (expired in 2014) for 362MW.
The extensions for Segari and Genting Sanyen were for 10 years while TNB Pasir Gudang was extended for five years. J. Connaught (300MW) was extended for four years and four months and J. Connaught (362MW) for a year.
The extensions were given under Track 2 and done via competitive bids by the three IPPs. The prices will be based on the least cost to the system.
ST chairman Datuk Abdul Razak Majid said the commission continuously reviews the supply and demand situation in the power supply system and will look into procurement options as and when there is a need to balance the demand.
The procurement options include buying a new plant or extending existing facilities, depending on which option gives more competitive rates for the periods when more supply is needed.
"With that exercise, we probably will go out and look at which other assets that others may have, either from IPPs or TNB, who can offer us rates which are very competitive, and economical for the periods, then we will engage them for the necessary duration, either for the short term, two years, or longer term, five years or even 10 years, depending on the offer we can get from these people," he said.
"We are thinking of having a small bidding exercise for those expiring IPPs to let them offer to the system, what can they offer as being competitive rates for us to use? If these rates prove to be uneconomic then we will not accept them, but if they are economic, then why not. These are good facilities, efficient, still running well and we would like to make use of these for another extended period of time," he added.
He, however, declined to comment on the status of 1Malaysia Development Bhd's project 3B.
Ministry of Energy, Green Technology and Water secretary-general Datuk Loo Took Gee said pricing is an important point in considering the extension of expired or expiring concessions.
"The pricing must be something that is competitive. We should be looking at marginal cost so that the users, all of us here, get electricity at better rates compared to earlier. We are talking about first-generation IPPs," she said.
On the long-awaited National Energy Efficiency Action Plan, Loo said the numbers are being fine-tuned and will be off the ground before June this year.
According to Ahmad Fauzi, the ST has consulted stakeholders and refined the numbers, and the plan is in the final stage of reviews.
"We have to update the numbers because it has been on the drafting table for a number of years so a lot of things have changed, and a lot of initiatives have been carried out which was initially appropriate for the original version. So things have to be updated, refined, and we are quite happy with the latest refined version," he said.