Tadmax, Ranhill projects among those axed?

KUALA LUMPUR: Tadmax Resources Bhd’s 1,000 megawatt (MW) project in Selangor and Ranhill Holdings Bhd’s 300MW project in Sabah could be among the four new directly-awarded independent power producers (IPPs) to be cancelled by the government, industry observers said.

A source close to the industry said a project by a governmentlinked company (GLC) could also be among the four.

The source said Tadmax’s RM3.5 billion power plant in Pulau Indah would most likely be axed when the cabinet decided next week.

“The project in Pulau Indah was a highly political one and will most likely be scrapped as there are many huge power plants already under way.

“What should also be looked at are the tariffs these IPPs offer, lower (tariffs) increase their chances on being given the green light to go ahead.”

On Thursday, Energy, Green Technology, Science and Climate Change Minister Yeo Bee Yin said four IPP projects would undergo review pending an announcement by the ministry.

The move, said Yeo, was to allow for more competition in the electricity retail space, which was dominated by Tenaga Nasional Bhd (TNB).

Analysts at MIDF Research, who attended the new minister’s maiden townhall on Thursday, said Tadmax and Ranhill’s gasfired power projects could be among those to be scrapped. Others might involve large-scale solar (LSS) projects given to Quantum Solar Park group.

Quantum Solar was the first IPP to be awarded LSS projects under the LSS initiative on a direct award basis, they noted.

The group is building projects generating 50MW each in Melaka, Kedah and Terengganu.

MIDF Research analysts said Edra Power Holdings’ 2,242MW development in Melaka and TNBSIPP Energy Sdn Bhd’s Track 4A in Johor could come under scrutiny as they were awarded under direct negotiation.

“Among the major projects in the pipeline, we think Edra’s Track 4B with a massive 2,242MW capacity could come under scrutiny given that it was a directly awarded project.

“Track 4A by TNB-SIPP was a controversial project awarded on a directly negotiated basis (previously to the TNB-YTL-SIPP consortium) back in 2014,” they said.

They added that the TNB-SIPP project was already well under way, with a 28 per cent completion.

MIDF Research also highlighted Malaysia’s abundance reserve capacity of 30 per cent, which was higher than most countries despite a slower demand growth of between two to three per cent in the last few years.

“Three first generation power purchase agreement (PPA) extensions (combined capacity of 1,660MW, or about six per cent of installed capacity) are scheduled to expire up till 2020.

“While there is no indication of an ideal or target reserve capacity, the new minister indicated that the abundant reserve capacity gives the industry decent time to build up its renewable energy capacity within the next three to seven years, without the need for much more major new plant-ups in the near-term.”