MyPower to review PPAs

KUALA LUMPUR: The Government's recently set-up special purpose unit called MyPower Corp will review the much-criticised power purchase agreements (PPAs) between Tenaga Nasional Bhd (TNB) and independent power producers (IPP) and make the necessary recommendations to three ministeries soon, said Energy, Green Technology and Water Ministry (KeTTHA) deputy secretary-general Badaruddin Mahyuddin.



The unit that was set up a year ago under the ministry, said a source, is headed by Datuk Abdul Razak Majid, a veteran in the power sector who was formerly TNB's senior vice-president of corporate affairs.

“Part of its (MyPower) task is to review and discuss the contents of the PPAs and come up with suggestions for both TNB and IPPs. Before submitting these recommendations to the three ministries KeTTHA, Prime Minister's Office and Finance Ministry the unit will jointly discuss them with the Energy Commission (EC),” Badaruddin elaborated to StarBiz yesterday.

On planting up to meet future energy demand, Badaruddin said the Government was currently examining the need to build new plants or extend the life of some existing plants. “We are going to lose 4,000MW because of the expiry of both TNB's and IPPs' old plants. We need the capacity,” he said, adding that the country's current reserve margin of 40% was based on installed capacity.

MyPower will make recommendations on TNB-IPP power purchase agreements.

The Energy Commission (EC) had offered TNB to develop the first unit of 1,000MW coal-fired power plant on its existing power plant site in Manjung, Perak.

Last month, Malakoff Bhd had accepted the conditional offer from EC to undertake the construction and development of a 1,000MW coal-fired power plant which will be located alongside the existing Tanjung Bin power plant.

Another main task of MyPower is to study a possible restructuring of the country's electricity supply industry. For this, it will conduct a study on the domestic landscape based on nine aspects which also include governance issues as electricity supply is currently being handled by various ministries, according to Badaruddin.

Earlier, he announced the upcoming conference Power-GEN Asia 2011/ Renewable Energy World Asia 2011 to be held from Sept 27-29.

MyPower's task also involves restructuring the legal and regulatory framework of the industry to be more equitable, competitive, liberalised and provide a level playing field. It will also be looking into moving the industry towards a cost-based structure.

In late May, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said the ministry was being assisted by MyPower and the EC to implement several changes in the country's electricity supply sector as identified by state-owned investment fund Khazanah Nasional Bhd in a research on the need for reforms in the energy sector completed in 2009. “These changes are needed for a vibrant energy sector,” he had said.

Meanwhile, on the 1% levy to cover cost associated with the Feed-in Tariff (FiT) scheme for renewable energy, Badaruddin said the ministry was currently working to get the Sustainable Energy Development Authority (Seda) set up so the governing body could implement renewable energy (RE) by Sept 1.

Seda will be responsible to manage the FiT mechanism for RE in the country as well as to award licences for renewable energy plaers for the production of RE.

Badaruddin said although the government had announced a tariff hike recently, the 1% tariff for RE had not been incorporated in consumers' bills.

He said the 1% levy for RE was expected to raise about RM300mil a year for Seda.

“Most probably,” Badaruddin said when asked if Badriyah Abdul Malek, the ministry's undersecretary for sustainable energy will helm Seda.

Earlier, StarBiz reported that Badriyah had been identified to assume the post in the governing body.

http://biz.thestar.com.my/news/story.asp?file=/2011/7/13/business/9088598&sec=business