KUALA LUMPUR: The consortium of SIPP Energy Sdn Bhd (SIPP), YTL Power International Bhd (YTL) and Tenaga Nasional Bhd (TNB) have been picked for a power plant project in Pasir Gudang, Johor.
The Energy Commission said on Saturday the group was picked based on their ability to offer competitive rates in the recently concluded tender exercises. This was on condition the technical and commercial proposals were acceptable to the commission.
The consortium will develop a fast track combined cycle power plant (CCGT) using proven technology with a capacity of 1,000 MW to 1,400 MW in Pasir Gudang.
“The levelised tariff that may be considered competitive must be comparable to the Prai CCGT tender exercise concluded in 2012,” it said.
It said since 2010, in consultation with the Minister of Energy, Green Technology and Water, they opted for three procurement methods to secure new generation capacity to meet the increasing demand for electricity.
The three methods were direct award, restricted bidding and open bidding exercises.
The commission explained the selection of the procurement methodology hinged on the date when the plant should be operational, the time required for the development and completion of the plant, availability of a suitable site to meet the commercial operation date requirement, and the time required to adhere to environmental and regulatory requirements.
It said the recent drop in available capacity due to unexpectedly high unscheduled outages of power plants, fuel supply issues, deration of plants and transmission constraints raised concern on the security of our electricity supply system.
It cited the incident was on 7 May 2014 when Tenaga Nasional Bhd’s grid system operator had to initiate load shedding causing supply interruptions in several states in order to stabilize the grid system.
“In consideration of medium term planning scenario and current operational parameters, the Energy Commission has decided that there is a requirement to fast track the construction of a plant that was scheduled to be operational in 2020 to an earlier date in 2018 to meet the system requirements.
“The optimal way to meet this deadline is through a conditional offer whilst still stipulating the need for competitive bid for the engineering, procurement and construction (EPC) portion of the project,” it said.
The commission also said it would vet the EPC tender and the use of only proven gas turbine (GT) technology to ensure all reputable GT manufacturers could participate in the tender.
“Other aspects of the project, namely the technical and commercial proposals, will also be subjected to review and approval by the commission.
“The government will always ensure that the procurement of new generation capacity will be done in a manner that is beneficial to the nation and also at competitive prices,” it said.