YTL, Malakoff, TNB secure short-term power supply contracts

KUALA LUMPUR: YTL Power International Bhd, Malakoff Corp Bhd and Tenaga Nasional Bhd (TNB) have been granted short-term contracts to supply electricity, said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili.

“The three companies have already received extensions because there is an expansion shortage with some project delay, so we opened competitive bidding for those asking for extension at open pricing.

“The winners were the three, they are already approved for extension. They just have to sort out the land issue with TNB,” he told reporters at the opening of the 33rd Asean Ministers on Energy Meeting yesterday.

Ongkili said the short-term contracts are part of the government’s planning mechanism to maintain the 24% to 25% reserve margin and there are no electricity supply issues.

The Energy Commission (ST) had said it would conduct an open-bidding exercise to extend expiring power purchase agreements (PPAs) to address a power shortage caused by delays in Project 3B and Project 4A, as well as to maximise its existing assets.

Project 3B is a 2,000MW coal-fired power plant while Project 4A is a gas-fired power plant with a capacity of 1,000MW to 1,400MW.

Ongkili said YTL Power will have to sort out land issues with TNB but all three companies have already received short-term contracts. He said the contracts are for three years.

He said the short-term contracts are not under the New Enhanced Dispatch Arrangement (Neda) that was recently introduced by the ST.

“This is not under Neda. This is a new PPA . You have to sign a new PPA together with the utility,” Ongkili said, adding that the commission will facilitate the PPA.

YTL Power Generation Sdn Bhd’s 21-year PPA with TNB expired on Sept 30, 2015, which also affected a leasing agreement between the two parties. YTL Power Generation was to lease TNB’s land in Paka, Terengganu, and Pasir Gudang, Johor, to build power stations.

Ongkili did not disclose the capacity of the short-term contracts awarded to the three companies. However, it was reported that YTL Power could have secured a short-term contract to supply some 580MW of electricity.

On whether the government is agreeable to foreign parties buying 1Malaysia Development Bhd’s (1MDB) power unit Edra Global Energy Bhd, Ongkili: “No comment on that because all are still in the process of discussion and we don’t know who are the people who are participating. It’s internal to 1MDB until they come to us for permission to close the deal.”

According to recent reports, TNB is the sole Malaysian bidder for 1MDB’s 13 power assets while three other bidders face the 49% limit on foreign ownership.

The three foreign potential buyers shortlisted were said to be Qatar’s Nebras Power QSC, Hong Kong-listed CGN Meiya Power Holdings Co and Saudi Arabia-based ACWA Power International. ACWA Power, however, has since denied that it is in the shortlist.