Ministry to review IPP contracts, four cancelled

PUTRAJAYA: The Energy, Green Technology, Science and Climate Change Ministry has cancelled four Independent Power Producer (IPP) contracts that were awarded under the previous administration, said its minister Yeo Bee Yin (pic).

She said the ministry will continue to review the contracts of other IPPs.

"The previous government had approved many IPP contracts through direct negotiation and direct award," said Yeo in her inaugural town hall session with energy stakeholders on Thursday.

"We are reviewing the IPP contracts, especially those that bring no cost implication to the Government," she said.

It is estimated Malaysia consumes 133 billion kilowatt hour (kWh) of electric energy annually and produced 141.9 billion kWh, leaving it with a strong reserve of 30%.

Yeo said the reserve gives the Government time to cancel some IPP contracts and to develop a new energy industry centred around renewable energy.

She said that her Ministry wants an "affordable, reliable, sustainable and long-term energy" for Malaysia.

"If you look at our country over the past two decades, we are seeing a lot of coal-fired power plants," said Yeo.

Malaysia is heavily dependent on coal-fired power plants, with Yeo saying that the dependence has increased to 42.5% in 2016 compared with 8.3% in 1996.

"If we do not stop this, there will be more to come. Some people say that because it’s cheap, we should be allowed to go ahead," she said.

"But I want to tell you that because we do not produce coal in Malaysia, our country will be in trouble because we are reliant on something that we do not have.
"That is the reason why renewable energy is something the Government wants to move forward to," said Yeo.

In the Pakatan Harapan manifesto, the coalition pledged to increase renewable energy from the current 2% to 20% by 2025.

Pakatan also pledged to reduce the dependence on coal-fired power plants which is one of the power generation methods that has a serious impact on CO2 emissions.

"We have an ambitious plan and now we have the responsibility to fulfil the promise we made," said Yeo.