By CECILIA KOK cecilia_kok@thestar.com.my
With Sarawak deciding to keep the energy generated by Bakun for itself, will there be sufficient offtake for such huge power supply when the dam becomes operational?
AFTER a long history of controversies, challenges and delays, the multibillion-ringgit Bakun hydroelectric dam in Sarawak is finally getting ready to unleash its power. It is expected to first start with one turbine generating about 300 megawatt (MW) of electricity by the middle of next year. This will be increased to around 600MW to 900MW by the end of 2011.
And when all the eight turbines at the massive dam are fully commissioned by the end of 2012, the plant will be able to generate about 2,400MW of hydropower, all of which will be contained within Sarawak for its own consumption.
At a glance, critics would say that there is too much power for the state to absorb, given that its current generation capacity is already considerably higher that its peak demand. Sarawak’s electricity generation capacity at present is around 1,300MW, while peak demand barely exceeds 1,000MW.
But these numbers, based on historical information, may not paint the real picture of what’s in store for the state.
For one, there is the Sarawak Corridor for Renewable Energy (Score) project, which is expected to attract energy-intensive industries such as aluminium smelting and solar-panel manufacturing. Then, apart from having to meet the state’s gradually growing organic demand, there is the longer term plan to position itself as a major power and utility player in the region, exporting electricity to neighbouring regions.
Score influences
“Big plans are in the pipeline with the establishment of Score; the state needs to guarantee a sustainable supply of energy at competitive rates to encourage inflows of investments to drive its economy,” an industry observer explains.
Score is expected to expand Sarawak’s economy five-fold, causing it to grow at an average of up to 8% per year, and its population to double to 4.6 million, by 2030.
According to projections by the state’s sole electricity supplier, Sarawak Energy Bhd, Score would need about 500MW in 2012 to power up industries operating within the economic development zone. By 2014, the amount of power needed by industries in Score will likely increase four-fold to near 2,000MW.
“The state would have to prepare for the anticipated substantial growth in electricity demand by industries in Score,” an analyst explains.
“And in such instances, it is clear that Sarawak Energy does not foresee any power glut looming in the future.”
Sarawak Energy is the sole rightful buyer of power generated from the Bakun dam. The dam is owned and operated by Sarawak Hidro Sdn Bhd, which is 100% owned by the Federal Government via the Minister of Finance Inc.
Sarawak Energy’s ambitious projections of the state’s future power demand, however, are not enough to pacify sceptics. This is because the state utility company has yet to secure any firm commitment from investors to take up power.
Their concern is that the dam will not be fully utilised when the expensive project becomes operational. The thing is, electricity generated cannot be stored. Once generated, the power has to be used; otherwise, it will be wasted.
Sarawak Hidro engineers at the Bakun Dam project.
“Bakun dam has to be fully utilised because the nation has spent so much time, money and effort in developing that gigantic project,” an analyst opines.
Tapping potential
It is understood that the state is still negotiating with investors to finalise the commercial terms for their agreements. Among these include energy-intensive aluminium smelters such as the joint venture between Cahya Mata Sarawak Bhd and Australia-based Rio Tinto Alcan, which requires between 900MW and 1,200MW for an initial annual capacity of up to 720,000 tonnes; and the joint venture between Tan Sri Syed Mokhtar Al-Bukhary’s vehicle GIIG Holdings Sdn Bhd and China’s Aluminium Corp, which requires at least 600MW for an initial annual capacity of 330,000 tonnes.
“There seems to be quite a number of interested parties wanting to invest in Score, and we have been made to understand that the state is very close to securing several foreign direct investment projects for the economic development zone. And these are besides the aluminium smelters that have already expressed their interests earlier,” an industry player explains.
The state is reportedly engaged in talks with less energy-intensive industries such as poly-silicon, manganese and ferro-silicon industries to set up base in Score. These industries are expected to require around 150MW to 200MW of power to start their operations.
“Anyhow, the state needs to secure firm commitments from investors to take up power as soon as possible; otherwise, there is the risk of a power glut in the state, especially so with other hydroelectric dams coming onstream in the next couple of years,” an industry player says.
Building up power
The RM3.5bil Murum dam, owned by Sarawak Energy, is expected to become operational by the end of 2013. The plant will add about 940MW to Sarawak’s generating capacity.
On top of that, plans are already underway to develop other hydroelectric dams in the state. According to Sarawak Energy, the list includes a 1,400MW dam in Balleh, 1,000MW in Baram, 150MW in Limbang and 300MW in Metjawah, among others. In total, Sarawak has more than 20,000MW of hydropower potential based on studies done earlier for the state utility firm.
“Leaving any of the hydropower plants, especially Bakun, idle is not an option. It is likely that Sarawak Energy would draw down power from Bakun, and shut down its gas and coal-fired plants for maintenance, or it may even phase out those plants that are powered by fossil fuel totally and replace them with renewable energy,” an industry source says.
There are plans to export electricity to the surrounding regions such as West Kalimantan in Indonesia and Brunei as well as Sabah and Peninsular Malaysia. But new commitment to export power is unlikely to take place any time soon until Sarawak is able to meet its own anticipated growth of electricity demand, industry sources say.
It has long planned for the Bakun hydroelectric plant to be a part of the solution for peninsula’s growing energy demand. But after the plan for the RM10bil undersea cable connecting Sarawak and peninsula was scrapped in the middle of the year, consumers in the peninsula can forget about getting power from Bakun.
Facing the possibility of an energy crunch in the next five years, the Government has desperately sought for replacement power sources to fill the gap (about 1,600MW) now that the Bakun option is off the table.
“It is ironic that we see a concern of a power glut on one side of the country, and a power crunch on the other side,” an analyst says. “This matter can be resolved but it requires political will on both sides of the divide.”
But as it is now, the peninsula will have to depend on power players such as Tenaga Nasional Bhd, Malakoff Bhd or Jimah Power Sdn Bhd to crank up their coal-fired facilities to meet the power demand, while Sarawak works on transforming itself into a major energy hub in the region.
