Awer calls for audits of all power projects awarded from 2011 onwards

PETALING JAYA: The Association of Water and Energy Research Malaysia (Awer), which had consistently called on the Barisan Nasional government to abandon direct negotiations for power plant projects, has asked the Pakatan Harapan government to audit all approval processes and awards of power plant in KeTTHA, the Energy Commission and the Sustainable Energy Development Authority (Seda) from 2011 onwards.

KeTTHA is the Ministry of Energy, Green Technology and Water during the Barisan Nasional government.

Heartened by the recent announcement of the cancellation of four power plant projects that were awarded through direct negotiations and the review of others, Awer president S Piarapakaran urged the government to launch detailed investigations into power plant construction and costing to reduce overall cost impact on electricity tariff.

Investigations should include an audit of Planning and Implementation Committee for Electricity Supply and Tariff decisions, meeting minutes, documentations and presentations from 2012 onwards; the handling of competitive bidding process for new power plants and documentation including how nodal points and land requirements (greenfield and brownfield) are set should be looked into; waiver of 49% foreign equity limitation for power plant; extension process of old power plants and its bidding process; failure of Seda and FiT (Feed-in-Tariff) to meet renewable energy mix target; and Seda's mysterious set-up process and lack of transparency in the FiT mechanism.

Seda is a statutory body formed under the Sustainable Energy Development Authority Act 2011 (Act 726), to administer and manage the implementation of the feed-in tariff mechanism which is mandated under the Renewable Energy Act 2011 (Act 725).

Piarapakaran reiterated that power plant construction and its costing pose huge cost impact on electricity tariff, competitiveness, goods and services affordability, and investors' confidence.

He said direct negotiations of several gas power plants and large scale solar caused additional cost of over RM25 billion, when compared with projects awarded through competitive bidding, and this cost is paid by consumers. Electricity tariff has a multiplier impact on prices of goods and services. Any unfair increase in electricity cost will hamper the government's effort to manage the increase in cost of living.

"Awer stands firm in its belief that the country can only achieve affordable and equitable electricity tariff via fair and transparent competitive bidding. More than two thirds of electricity cost comes from generation sector," Piarapakaran said, adding that building new power plants via competitive bidding was a promise stated clearly in 10th and 11th Malaysia Plans.

"Cancellation of power plants awarded via direct negotiation will only reflect the correct policy implementation," he said in a statement.