Bakun & Murum will result in considerable oversupply by 2013 in absence of firm commitments
The Star 3/8/2010
PETALING JAYA: There is likely to be a major power glut in Sarawak with the coming on stream of two major hydro power projects by the end of 2013 and the lack of firm commitments from investors to take the power up, industry players said.
There will be
2,400MW of capacity from the RM7.3bil Bakun Dam by the end of 2012 while a further
944MW will be added from the RM3.5bil Murum Dam by the end of 2013.
About 300MW of hydropower from the first turbine at the RM7.3bil Bakun Dam is expected to be generated by the middle of next year and 600-900MW by end of next year; by 2012, all eight turbines are expected to be in place. Murum Dam is currently 27% completed with the RM3.5bil job awarded to China’s Three Gorges Project Corp and sub-contracted to Sinohydro Corp Ltd.
Total installed capacity from these two dams is 3,344MW but firm power that is available for use at anytime will be about 2,420MW (1,770MW from Bakun and 650MW from Murum).
Sarawak’s current capacity of 1,300MW
already considerably exceeds peak demand of 900MW (excluding power to Press Metal’s aluminium smelter, which will initially take up 90MW).
Apart from organic demand, industries from the Sarawak Corridor of Renewable Energy (SCORE) are projected to start taking about
500MW in 2012 and close to
2,000MW by 2014,
according to projections by Sarawak Energy Bhd, the state electricity utility.
Sarawak Energy owns Murum Dam while Bakun Dam is owned by Sarawak Hidro Sdn Bhd which is in turn wholly-owned by the Government’s Minister of Finance Inc.
“By 2015, Sarawak expects a commitment of 2,590MW which exceeds the combined firm capacity of Bakun and Murum (2,420MW),” an industry source said.
However, industry players are not convinced that commitments will materialise to increase the power demand by 2,600 MW a year, nearly three times Sarawak’s current demand.
Sarawak Hidro still does not have an agreement to sell its electricity although the dam is going to be flooded soon. Sarawak Energy can’t make a firm decision to buy from Sarawak Hidro because it in turn does not have firm commitments by anyone to purchase the power. There is no agreement on tariffs as yet.
There are said to be 25 negotiations going on with 12 potential purchasers at an advanced stage of working out the details on the term sheet, sources indicated.
“It is a Catch 22 situation,” said an industry source. “Investors want to know how Sarawak Energy is strategising its position in relation to the Bakun Dam project. Sarawak Energy needs to get the financial commitment from Sarawak Hidro in terms of their financial models (upon which the tariffs will be calculated).”
In the interim, Sarawak Energy is likely to be take power from Bakun to maintain its gas turbines and coal fired plants. “Sarawak Energy needs to do maintenance,” said the industry source. “It will probably shut down these plants and draw down the power from Bakun.”
There has been talk that Sarawak Energy is eyeing the purchase of the mammoth Bakun project at an indicative price of RM6bil (minus compensation costs for a previously botched job as well as resettlement costs) compared with the asking price of RM8bil.
The issue of tariffs is also another thorny matter with Sarawak Energy looking at just below 8 sen per KwH while their heavy offtakers – the aluminium smelters – are only talking of slightly less than four US cents (13.6 sen on an exchange rate of RM3.40 to the dollar) per KwH. At Sarawak Hidro, various costs are imputed, making the tariff range acceptable at 10 to 15 sen per KwH.
Current talks with two potential aluminium smelters are focused on the commercial terms in the initial power purchase agreements.
These are:
·The smelter project by Cahya Mata Sarawak Bhd (CMS) and Australia-based Rio Tinto Alcan, which requires between 900MW and 1,200MW for an initial annual capacity of up to 720,000 tonnes; and
·Smelter Asia with an initial annual capacity of 330,000 tonnes requiring 600MW. Smelter Asia is jointly owned by Tan Sri Syed Mokhtar Al-Bukhary’s vehicle GIIG Holdings Sdn Bhd and China’s Aluminium Corp.
At the same time, there are ongoing talks with smaller users of 150-200MW such those in poly silicon, manganese and ferro silicon industries. They do not use as much power as smelters and cost of power is not a significant part of their overall costs.
The power glut does not stop at Bakun and Murum. Plans to build another five smaller dams are likely to commence later.
A 245MW dam can be built in Limbang if Sarawak Energy succeeds in pushing the Sarawak grid from Miri to Limbang, something which will involve passing through Brunei. “Sarawak Energy hopes to get strong commitment from Brunei before the end of this month for up to 400MW by 2015; the first phase of offtake is for 100MW in 2012,” said the industry source.
The 100MW dam at Lawas may be built in one or two years as Sarawak Energy is expected to engage with Sabah Electricity Sdn Bhd and Tenaga Nasional Bhd on supply of power to the state, pending their decision to proceed with the 300MW Liwagu hydro dam in Sabah.>
Showing posts with label Sarawak Energy Bhd. Show all posts
Showing posts with label Sarawak Energy Bhd. Show all posts
Wednesday, August 4, 2010
Friday, November 6, 2009
Tender for Bakun submarine cable in 3 months time
Friday November 6, 2009By JACK WONG
KUCHING: The open international tender for the proposed submarine cable project to transmit electricity from Bakun hydro dam in Sarawak to Peninsular Malaysia is expected to be called in three months. Sarawak Hidro Sdn Bhd managing director Zulkifle Osman said a German consultant was now helping the special purpose vehicle set up by the Tenaga Nasional Bhd-Sarawak Energy Bhd consortium to prepare the tender documents. Sarawak Hidro, a wholly-owned subsidiary of Finance Ministry Inc, is the dam’s developer and manager.
Zulkifle said submission for the tender was expected to close in August next year. The tenders are for the fabrication and laying of cables across the South China Sea. “The first of the two submarine cables is expected to be completed by 2016 and the second a year later,’’ Zulkifle told a media briefing on the Bakun project here on Wednesday night, adding that each of the two submarine cables would transmit 800MW.
He said the actual route for the laying of the undersea cables, from Tanjung Pueh, Sematan in Sarawak to the southernmost tip in Johor, had yet to be determined. The cables, ranging from 670km to 700km, have to go through Indonesian waters.
The Bakun electricity will first be transferred through Syarikat Sesco Bhd lines to Bintulu and then Kuching before being linked to the submarine cables. Syarikat Sesco is a wholly-owned subsidiary of listed Sarawak Energy Bhd. The company was formerly known as Sarawak Electricity Supply Corp before it was privatised in July 2005.
Zulkifle said the dam, which has an installed capacity of 2,400MW, would be fully operational by 2011. The first of the dam’s eight turbines, which could each generate 300MW, is expected to be commissioned in October or November next year. However, he said the amount of electricity to be generated from Bakun initially would depend on the demand as Sarawak now have an excess of some 200MW.
Power from Bakun is also expected to be exported to neighbouring Brunei.
Zukifle said the dam’s civil as well as electrical and mechanical packages were more than 90% completed.
He added that the project’s actual development cost had not been determined, noting that Sarawak Hidro has not fully utilised the RM4.3bil it had borrowed to finance the Bakun dam construction.
KUCHING: The open international tender for the proposed submarine cable project to transmit electricity from Bakun hydro dam in Sarawak to Peninsular Malaysia is expected to be called in three months. Sarawak Hidro Sdn Bhd managing director Zulkifle Osman said a German consultant was now helping the special purpose vehicle set up by the Tenaga Nasional Bhd-Sarawak Energy Bhd consortium to prepare the tender documents. Sarawak Hidro, a wholly-owned subsidiary of Finance Ministry Inc, is the dam’s developer and manager.
Zulkifle said submission for the tender was expected to close in August next year. The tenders are for the fabrication and laying of cables across the South China Sea. “The first of the two submarine cables is expected to be completed by 2016 and the second a year later,’’ Zulkifle told a media briefing on the Bakun project here on Wednesday night, adding that each of the two submarine cables would transmit 800MW.
He said the actual route for the laying of the undersea cables, from Tanjung Pueh, Sematan in Sarawak to the southernmost tip in Johor, had yet to be determined. The cables, ranging from 670km to 700km, have to go through Indonesian waters.
The Bakun electricity will first be transferred through Syarikat Sesco Bhd lines to Bintulu and then Kuching before being linked to the submarine cables. Syarikat Sesco is a wholly-owned subsidiary of listed Sarawak Energy Bhd. The company was formerly known as Sarawak Electricity Supply Corp before it was privatised in July 2005.
Zulkifle said the dam, which has an installed capacity of 2,400MW, would be fully operational by 2011. The first of the dam’s eight turbines, which could each generate 300MW, is expected to be commissioned in October or November next year. However, he said the amount of electricity to be generated from Bakun initially would depend on the demand as Sarawak now have an excess of some 200MW.
Power from Bakun is also expected to be exported to neighbouring Brunei.
Zukifle said the dam’s civil as well as electrical and mechanical packages were more than 90% completed.
He added that the project’s actual development cost had not been determined, noting that Sarawak Hidro has not fully utilised the RM4.3bil it had borrowed to finance the Bakun dam construction.
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