TNB and YTL finally ink PPA

PETALING JAYA: Tenaga Nasional Bhd (TNB) and YTL Power Generation Sdn Bhd have finally inked a new Power Purchase Agreement (PPA), delayed by a judicial review request by TNB last Tuesday, after the Energy Commission (ST) issued a letter of award to YTL Power to continue operations on April 20, 2017.
To recap, TNB filed for a judicial review in July 2016 after the Energy, Green Technology and Water Ministry and the ST directed it, among others, to remove the incorporation of conditions precedent required by TNB in the proposed new PPA, that is the subject of negotiations between TNB and YTL Power.
Following an announcement of a stay order won against the ST and the ministry direction in November 2016, no further updates were given on the judicial review sought, until the announcement made on Tuesday. It is not known if the conditions precedent required by TNB were removed under the new PPA.
YTL Power, under the new PPA, is to provide up to 585MW power to TNB from its combined cycle power plant located in Paka, Terengganu for a period of three years and 10 months. The scheduled commercial operation date of the plant is Sept 1, 2017.
A new land lease agreement (LLA) will replace the terms and conditions of the original land lease agreement dated July 30, 1993 between TNB and YTL Power. Further to this, the new LLA will govern the lease of the portion of TNB’s land in Paka used by YTL Power and demobilisation of the plant thereafter.
In 2015, the government through the ST conducted a competitive bidding exercise to procure additional power supply on a short-term basis by extending the PPA of the first generation independent power products (IPP) for which three IPP’s namely Port Dickson Power Bhd, Kuala Langat Power Plant Sdn Bhd and YTL Power were selected.
According to the ministry, YTL Power was the only one out of the three to have not signed a new PPA due to the conditions precedent set by TNB on its PPA.