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Ensuring SCORE’s power is transmitted smoothly

http://www.theborneopost.com/2011/08/18/s%E2%80%99wak-to-build-multi-billion-alternative-power-line/

S’wak to build multi-billion alternative power line

BETONG: A multi-billion ringgit ‘backbone transmission line’ (alternative line) might be built soon to ensure better security and reliable power supply, revealed Minister of Public Utilities Datuk Amar Awang Tengah Ali Hassan yesterday.

He told The Borneo Post that Phase I of the backbone transmission line from Samalaju to Sibu, costing about RM2 billion, was now at the design stage and might be tendered out soon.

“There is an urgent need to provide security and reliability to our present power supply so that when there is a power failure in the grid system, the backbone transmission line could provide the loop to ensure uninterrupted power supply to customers,” he said after presenting compensations to land owners and handing over Bumiputera Community Land Reserve at Dewan Tan Sri Datuk Amar Stephen Kalong Ningkan here yesterday.

The state currently only has one power grid line stretching from Lundu to Miri. The backbone transmission line would have a capacity of 500KV, which is 225KV more than the present grid system.

“At the same time we also need more power, especially from Bakun hydroelectric (HEP) dam, to provide the much needed energy for power-intensive projects, especially in the Sarawak Corridor of Renewable Energy (SCORE) area, and to meet anticipated increase in demand due to organic growth.”

The state currently consumed between 1,100MW and 1,200MW of electricity while supply from all sources is about 1,500MW.

Awang Tengah revealed that although Bakun had been able to provide 300MW of electricity to the grid system since August 6, the actual power intake was only 180MW.

He added that power from Bakun was still in its infancy and as such the government would not rely on it too much for the time being as it could still experience technical glitches like what happened on Tuesday.

The statewide power failure from 9.06am till 4.20pm was caused by a power trip in Bakun HEP.

Awang Tengah, who is also the Second Minister of Planning and Resource Management, said he was confident that when power from electricity generating dams were fully tapped in future, the state would be able to attract more heavy and power-intensive industries, such as aluminium smelting, poly-silicon, metallic silicon, manganese and ferro-silicon smelting, to invest here.

Sarawak is expected to produce some 7,500MW of power by 2020, out of which about 80 per cent would come from HEP.

The Borneo Post (August 18, 2011, Thursday)

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For our SCORE to achieve its true potential, things like a second transmission line must be put in place.

Smooth and effective transmission of power should be considered as one of the most important aspects of our development strategy, especially since the progress of SCORE depends so much on our ability to generate power and deliver it to customers throughout Sarawak, and also the region.

Sarawak’s ability to deliver on these two important responsibilities will play an important part in determining the success of our SCORE.

 

 

Cheapest electricity tariff in the region draws investors

http://biz.thestar.com.my/news/story.asp?file=/2011/6/2/business/8820772&sec=business

SEB has 50% firm utilisation rate (The Star)

PUTRAJAYA: Sarawak Energy Bhd (SEB), which will have the rights to the Bakun dam’s power at a rate of 6.25 sen per kwh, has a firm utilisation rate of 50% from its four customers.

The electricity from the Bakun dam which is priced at 6.25 sen/kwh with an annual hike of 1.5% under a power purchase agreement (PPA) between Sarawak Hidro Sdn Bhd and Syarikat Sesco Bhd confirmed a StarBiz report yesterday.

StarBiz quoted sources saying the rate represented the cheapest tariff in Asian history but would be escalating at 1.5% per annum for 30 years.

SEB chairman Datuk Hamed Sepawi said the four customers it had secured would utilise some 50% of capacity of the 2,400MW to be produced from Bakun hydroelectric dam.

“We are still discussing with 15 to 16 more potential Sarawak Corridor of Renewable Energy (SCORE) customers. We may need all the energy but it is not just Bakun. The Murum dam will be coming on stream in 2013 as well as a coal-fired power plant,” he said after the power purchase agreement signing between Sarawak Hidro and Syarikat Sesco witnessed by the Prime Minister Datuk Seri Najib Tun Razak and Sarawak Chief Minister Tan Sri Abdul Taib Mahmud yesterday.

Sarawak Hidro is a unit of the Ministry of Finance Inc and owner of the Bakun dam while Syarikat Sesco is the wholly-owned subsidiary of SEB.

Last month, SEB sealed separate PPA term sheets with four major investors Press Metal, OM Materials, Asia Minerals Ltd and Tokuyama Corp. The four companies which plan to invest some RM9.5bil will require a combined 1,300MW to power their upcoming plants in Samalaju Industrial Park.

SEB has also signed an MoU with Smelter Asia Sdn Bhd, which needs more than 600MW to power its proposed US$1.6bil (RM4.8bil) aluminium smelter in Samalaju.

Smelter Asia is a joint venture between Gulf International Investment Group Holdings Sdn Bhd and Aluminium Corp of China.

Earlier, Taib said the state targeted to have a total of 20,000MW power output in the next 20 years.

Hamed said SEB was happy with the PPA with the Federal Government but he did not disclose the details.

The 2,400MW Bakun dam’s first of eight turbines is expected to commercially produce its first 300MW in August to be followed by subsequent turbines at 3-month intervals until all turbines are in operation in 2013.

Hamed said the Bakun dam was built at a very competitive price compared with future hydropower projects. “At the moment the cost is US$1mil per MW, but future projects will cost US$2mil to US$3mil per MW.”

Hamed said the water levy was 1sen out of the 6.25 sen/kwh to be paid to the Sarawak government.

Sarawak Hidro is projected to earn a minimum revenue of RM36mil in 2011 and RM112mil the following year while payments to the Sarawak are expected to exceed RM7mil and RM21mil in 2011 and 2012 respectively.

The Star (Thursday June 2, 2011)

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It seems that the 6.26 sen/kWh for electricity from Bakun seems to have gone down well with investors.

In the coming months, we should expect more deals to be made between the State and the companies from all over the world keen to set up their operations in Sarawak.

Looks like SCORE is going to start getting busy soon.

Price for Bakun power is set at 6.25 sen/kWh

http://www.btimes.com.my/Current_News/BTIMES/articles/bakun01-2/Article/index_html

Power price pact (Business Times)

Putrajaya: The government will sell electricity from the Bakun hydroelectric dam at 6.25 sen per kilowatt (kWh) to Sarawak Energy Bhd (SEB), Prime Minister Datuk Seri Najib Razak said.

Under the deal, the tariff rates will increase by 1.5 per cent per annum for 30 years.

The power purchase agreement (PPA) was signed yesterday by Sarawak Hidro Sdn Bhd (SHSB) and Syarikat Sesco Bhd, a unit of SEB.

SHSB is a unit of the Finance Minister Inc that manages the Bakun dam, while SEB is the utility arm of the Sarawak state.

“I am happy to disclose that the tariff rate of 6.25 sen per kWh fixed for the sale of electricity generated from Bakun, with an annual increase of 1.5 per cent, is reasonable and competitive to attract investors into Malaysia especially to SCORE,” Najib said at the signing ceremony.

SCORE, or Sarawak Corridor of Renewable Energy, is a major initiative undertaken to develop the central region and transform Sarawak into a developed state by the year 2020.

Najib said electricity generated from the Bakun project will serve as the backbone to SCORE’s success.

He said the federal government was committed to helping Sarawak achieve sustainable economic development.

“I am sure all quarters involved in the successful completion of the Bakun project and SCORE, especially the Sarawak government, will seize the opportunity to not only draw foreign investments into Malaysia but support the objective of the New Economic Model to turn the country into a high-income economy by 2020,” he said.

Bakun dam has eight massive turbines which produce 2,400 megawatts (MW) and is expected to commercially produce its first 300MW of electricity in August.

Meanwhile, SHSB said it expects to earn a minimum revenue of RM36 million this year and RM112 million in 2012.

The company, in a statement, said a water levy of RM7 million and RM21 million will be paid to the state government this year and 2012 respectively.

Sarawak Chief Minister Tan Sri Abdul Taib Mahmud said the state government will impose a one sen per kWh water levy on SHSB a year.

“When the full output of Bakun power station can be accepted by the Sarawak electricity grid from 2016, the full volume of water at the Bakun reservoir will be used to generate 17,500 gigawatt hours of energy per year,” SHSB said.

This represents about 15 per cent of the total electricity generated in Peninsular Malaysia and three times the hydro electricity power generated in the country.

Business Times (2011/06/02)

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To most people, 6.25 sen per kWh may just be a number or a figure that may not be relevant to everyday life.

However, to the investors who have been looking at Sarawak for several years now, this number means that that the strategies that they have been planning can take a much more concrete shape.

It gives them the certainty that was not in place before, and thus will help them in the all-important decision-making process regarding their future in  the State from now on.

Now the heavy industries will be able to plan for their electricity bill.

What this all means is that SCORE will also now be able to take a much more visible shape, and pretty soon we can expect to see the plants and factories coming up, especially in the “growth node” of Samalaju.

 

 

Power Purchase Agreement for Bakun Dam settled

http://biz.thestar.com.my/news/story.asp?file=/2011/5/13/business/8673445&sec=business

Main terms agreed for Bakun dam power purchase agreement (The Star)

These include tariff that SEB will have to pay to Sarawak Hidro

KUCHING: Sarawak Energy Bhd (SEB) and Sarawak Hidro Sdn Bhd have reached an agreement on the main terms of the power purchase agreement (PPA) for electricity produced by Bakun hydro dam.

SEB chief executive officer Torstein Dale Sjotveit said the main terms included the tariff that SEB would have to pay to Sarawak Hidro, the dam developer.

Sjotveit declined to reveal the agreed tariff but reliable sources indicate it is likely to be somewhere “between SEB’s offer for a starting tariff of six sen per kwh and the request by Sarawak Hidro for seven sen per kwh”.

Sources also said the PPA terms would go through the Cabinet soon and was likely to be announced at the end of this month. The sources added that negotiations were still ongoing “on a few outstanding issues that require the attention of both the state and federal governments”.

Meanwhile, Sjotveit said SEB and Sarawak Hidro had been working with the Sarawak government (which owns SEB) and the Finance Ministry (which owns Sarawak Hidro) on the main terms of the PPA.

“All parties are working day and night. We will be able to sign the PPA, which will be for 30 years, next month,” he told StarBiz yesterday. The legal documents of the PPA are being prepared.

Sjotveit said the signing of the PPA was imperative to give security to SEB customers that the Bakun power was coming.

The 2,400MW Bakun dam is expected to commercially produce its first 300MW in July. Wet testing of the dam’s first of eight turbines will be carried out next month.

He said SEB’s Similajau sub-station, which was designed to handle more than 4,000MW, was completed last month and ready to receive power from Bakun.

SEB is now constructing a dedicated power sub-station in Samalaju, which will serve industries in Samalaju Industrial Park, Bintulu, within the Sarawak Corridor of Renewable Energy (SCORE). The sub-station is expected to be operational in June next year.

Last month, SEB sealed separate PPA term sheets with four major investors Press Metal, OM Materials, Asia Minerals Ltd and Tokuyama Corp. The four companies, which plan to invest some RM9.5bil, would require a combined 1,300MW to power their upcoming plants in Samalaju Industrial Park.

SEB has also signed a memorandum of understanding (MoU) with Smelter Asia Sdn Bhd, which needs more than 600MW to power its proposed US$1.6bil (RM4.8bil) aluminium smelter in Samalaju.

Smelter Asia is a joint venture between Gulf International Investment Group Holdings Sdn Bhd and Aluminium Corp of China.

Sjotveit said SEB was concluding PPA term sheets with three more SCORE investors which planned to invest close to RM3bil.

Together with the Sarawak State Planning Unit, SEB is also in discussions with close to 20 other potential SCORE customers. “We have more customers than the available power from Bakun,” he added.

Besides Bakun, the supply of electricity for industries in Samalaju Industrial Park will come from the proposed 944MW Murun dam currently under construction by SEB. The project is located upstream of Bakun dam in the upper Rejang River Basin in central Sarawak.

Sjotveit said SEB planned to build another coal-fired power plant with a 600MW installed capacity in Balingian, Mukah Division. The project is expected to come on stream by 2015 to beef up the supply of electricity to industries in SCORE.

SEB now owns and operates a 270MW coal-fired plant in Balingian and another 210MW coal-fired plant in Sejingkat, Kuching.

The Star (Friday May 13, 2011)

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Once the PPA for Bakun Dam has been finalised, we will be able to provide more certainty to our investors.

Coupled with the political stability of our State, a fair PPA would ensure Sarawak becomes an even more attractive investment location in the future.

With SCORE firmly in place within the next five years, Sarawak’s economy will look far different from what we see now.

There will be more jobs for our people and more business opportunities available for our SMIs and SMEs.

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