Kota Marudu Member of Parliament

Third PPA extension will be granted, says Ongkili

KUALA LUMPUR: A third power purchase agreement (PPA) extension will be granted to an independent power producer (IPP) once “technical matters” in relation to the award are ironed out, said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili.

He did not name the IPP, though speculation was rife earlier this month that Malakoff Corp Bhd would be one of the IPPs that would get extensions on their PPAs from the Energy Commission (EC).

Malakoff Corp, however, has come out to clarify that neither it nor its indirect wholly-owned unit Port Dickson Power Bhd had been notified of the outcome of its bid for a renewal of its Port Dickson power plant PPA — due to expire on Jan 21 next year — by the EC, submitted on April 13 this year.

Ongkili told The Edge Financial Daily yesterday that six bidders had participated in the short-term capacity bid called by the EC, which was meant to extend the selected concessions to between two years and 10 months, and three years and 10 months.

He added that while two had been awarded extensions — 1Malaysia Development Bhd’s (1MDB) 434mw Powertek plant in Melaka and YTL Power International Bhd ( Valuation: 1.40, Fundamental: 1.50)’s 585mw Paka Plant — with a third soon to be granted, the government would not be awarding anymore PPA extension.

At least, it doesn’t intend to do so unless there is a need for additional energy in the future, he said.

It was previously reported that the bidding exercise was to address a power shortage that arose from the delay in several power projects, including 1MDB’s Project 3B, a 2,000mw coal-fired power plant that was due to be completed in November 2018.

Earlier yesterday, Ongkili told the Dewan Rakyat that the government could not disclose the content of the PPAs signed between the IPPs and Tenaga Nasional Bhd ( Valuation: 1.80, Fundamental: 1.30), as they were commercial agreements with a confidentiality clause.

“Therefore, no information with regards to the agreement could be disclosed to the public without the permission of both parties,” he said in reply to an oral question from DAP Batu Gajah member of parliament V Sivakumar.

Sivakumar had asked Ongkili to state the efforts taken by the government to renegotiate the PPAs, and whether there was any plan to amend any legislation to allow the agreements to be made public.

In response, Ongkili said the new amendment in the Power Supply Act 1990 (Amendment 2015) mandates that any arrangement by licence holders be subject to the EC’s approval.

He added the EC launched the New Enhanced Dispatch Arrangement (Neda) on Sept 29, which allows IPPs with concessions to offer a reduced rate of the variable operating rate in their generation cost.

 

Source - The Edge