Highlight Sarawak Energy looking at more hydroelectric dams

by **hlk** Sat 02 Nov 2013, 15:26

Business & Markets 2013
Written by Isabelle Francis of theedgemalaysia.com
Friday, 01 November 2013 16:00
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SARAWAK is hungry for power to meet growing industrial demand.
The impoundment of its third hydroelectric dam in Murum began just last month
and already it is mulling over a plan to build two more hydroelectric dams with a
combined installed capacity of 2,500mw to ease the electricity shortage that is
forecast to happen after 2020.
Sarawak Energy Bhd (SEB) has projected that come 2020, the power
generated by the two dams in Bakun and Murum plus a coal-fired plant in
Balingian will be sufficient to meet demand for 4,380mw.
However, by 2025, the power supply will not be sufficient as there is also a
need to put aside reserve capacity of 600mw to ensure power network security.
SEB anticipates a power shortfall of more than 1,800mw by then.
This shortage, sources say, could be resolved when two new hydroelectric
dams, one in Baleh and the other in Baram, are built. Baleh is estimated to
have an installed capacity of 1,295mw while the first phase of Baram will offer
1,200mw of power, according to SEB’s corporate website.
However, when contacted, SEB CEO Datuk Torstein Dale Sjotveit tells The
Edge that the decision to build the new dams is subject to many factors,
including the environmental studies that will be completed by the end of the
year.
“Studies on Baleh are completed and the results are being reviewed internally,”
he says. “As for Baram, the decision gate for us to obtain approval for the
dam’s construction will only open when we are ready to present the final
investment decision to our board that is targeted for the end of 2014.”
The Sarawak Corridor of Renewal Energy (SCORE) is the state’s biggest consumer of electricity. SEB estimates that the first phase of
SCORE will require 2,550mw of power by 2020 and the second phase, 3,700mw by 2025. By comparison, the requirement this year is
880mw.
The power distributor remains non-committal on the two hydroelectric dams despite a directive from the state in mid-July to compulsorily
acquire 4,090ha of native customary land for the development of Baram.
Sarawak has already invested in infrastructure surrounding the two dams, namely a 73km road to Baleh and a 60km road to Baram.
“The land acquisition notice issued by the Land and Survey Department is really a survey process that needed to be deployed first in
advance of the actual approval.
“The reason is that data collation takes a long time to be completed. If in the event Baram is approved for construction, the information will
be readily available,” explains Sjotveit.
He says the construction of the dams, if found to be feasible, will only be carried out based on demand and not only to meet immediate
needs, but also future projected growth.
The construction of the 944mw Murum gives a rough idea of
how long it will take SEB to build the new hydroelectric dams.
Work on Murum, the third hydroelectric dam to be commissioned
after Bakun and Batang Ai, started in 2008 and is 80%
complete.
Its impoundment, which started at end-September, is expected
to take another 10 to 12 months, meaning it could take a
minimum of six years to build a hydroelectric dam of such
capacity and on such terrain.
This suggests that SEB will likely develop another power plant
to meet the future surge in electricity consumption.
The directive on the land acquisition came one month after a
statewide blackout in July. SEB blamed Sarawak Hidro Sdn
Bhd, which manages the Bakun hydroelectric dam, for the
power outage that affected industries in SCORE. The
federal government owns Sarawak Hidro.
The blackout was a harsh warning to SEB to not depend too
much on Bakun as SCORE’s selling point.
To recap, three
years ago, the
federal and state
governments
agreed to direct all
of Bakun’s power
supply to SCORE.
But the statewide
blackout, caused by
the power supply
from the powerful
Bakun faulting and
tripping the
inadequate existing
transmission lines,
dented investor confidence in SEB’s ability to provide an uninterrupted supply of electricity to its SCORE clients.
Seven SCORE companies in total have signed power purchase agreements with SEB for a combined 1,920mw for power plants in
Samalaju Industrial Park. Bakun has an installed capacity to generate 2,400mw.
Sjotveit says the total investment to date by the PPA customers is RM13.62 billion while SEB is investing RM10 billion in SCORE.
Nonetheless, SEB says to meet future power requirements, hydro-based power plants would be ideal because unlike gas and coal, water
is not subject to market forces.
“By using hydro, SEB reduces its exposure to fossil fuel price variability risk as there is no fuel cost associated with water in the reservoir.
The state has a favourable geographical terrain for hydro sites with abundant rainfall to harness and meet our energy needs,” says
Sjotveit, adding that SEB is considering a number of new coal and gas power stations throughout Sarawak.