Malaysia expects competitive bidding for 4,500MW project

Malaysia's Energy Commission is targeting to have a total of 4,500MW power-generation capacity involving a combination of new and existing power plants through bidding.

An EC official told StarBiz that this is meant to replace the capacity of the first generation power-purchase agreements and to cater to future demand.

“Basically, what we're looking for are players who can offer us the least cost,” he said.

The power plant was to sell its capacity and energy to Tenaga Nasional Bhd under a new PPA. The site or sites would be made available by the EC, or alternatively, prospective bidders could propose new sites for EC's consideration.

According to Energy, Green Technology and Water Minister Datuk Seri Peter Chin, 4,500MW more of gas-based power generation would be required by 2017 to replace retired capacities and meet future energy demand in the peninsula.

The first generation PPAs, accounting for around 4,100MW of gas-based generation capacity, would be expiring in 2015 or 2016.

“The idea to allow the first generation PPAs to lapse is to pave the way for an open-tender process and more competitive pricing for TNB,” an analyst said.

“It is clear why TNB prefers to have an open-tender process. For one thing, it would push players towards greater efficiency and result in lower input prices for the supply of power, both of which would benefit TNB, and ultimately, consumers,” he explained, while noting the fact that it was very difficult for TNB to increase the selling price of electricity to end-users, as the prices were currently controlled by the Government.