Saturday, August 21, 2010

TNB may need alternative power plant solutions for Lahad Datu

TNB may need alternative power plant solutions for Lahad Datu

Courtesy from :By LEONG HUNG YEE  (THE STAR)

PETALING JAYA: Tenaga Nasional Bhd (TNB) may need to to find alternative power plant solutions for the east coast of Sabah given the rejection of the 300MW Lahad Datu coal plant Detailed Environmental Impact Assessment by the Department of Environment (DOE).

It was reported that the main reason cited for the rejection was that the assessment report did not address numerous important environmental parameters in respect of the proposed project.

Earlier, it was reported that TNB expects its 300MW coal-fired plant, costing more than RM1.3bil, to generate enough power supply to spur the development of the palm oil industrial cluster.

TNB had yet to revert StarBizWeek queries at press time.

“The DOE’s rejection of the Lahad Datu coal plant’s DEIA will likely mean that TNB needs to find alternative power plant solutions,” OSK Research Sdn Bhd research head Chris Eng said.

"Given that the DOE has exercised independent judgment on the matter, we believe TNB which has a 40.8% stake in the Lahad Datu plant, would be forced to consider other alternatives such as biomass given the abundance of oil palm plantations in Sabah or the long discussed Liwagu dam in central Sabah,” he said.

However, he pointed out that the cost of investment for using biogas would be more costlier than a coal-fired powerplant.

To a question, he said the terrain in Sabah, which was “too mountainous,” would make it costly to get the power across from Bakun.

“TNB needs to sit down with the environmental groups to discuss the issue and come up with an economically feasible solution,” Eng said.

He said for now, given the uncertainty over possible alternatives, OSK left its assumptions on the Lahad Datu plant unchanged as an investment in associates in TNB’s balance sheet.

Another power analyst said the rejection was just a temporary setback. “It is still uncertain but it does not mean that the plant is cancelled. It is just a temporary setback.”

He said there was a need for a power plant in Sabah given the power shortage in the state.
He opined that by adding additional capacity in the west coast and transmit power throught the existing grid would not address the shortage of power in east coast.

The analyst said the cost of transporting power from Bakun dam would be very high and risky. He added that the cable had to pass through a lot of forest reserve and land.

“There is a possibility of them (TNB) looking for a new location in the east coast of Sabah but it is not easy.

“They have been facing criticism from people from the area affected and acquiring a new site would mean they might need to cut down trees and would be criticised by the environmentalists,” he said.

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