SEB to invest RM2.5bil in a 600MW coal-fired plant

KUCHING: Sarawak Energy Bhd (SEB) is close to making “a final investment decision” on a new 600MW coal-fired power plant in Balingian, Mukah Division at a cost of about RM2.5bil to cope with the strong demand for power from industries in the Sarawak Corridor of Renewable Energy (SCORE), sources said.

If commissioned, the plant is expected to be completed by 2015.

The sources said the plant's feasibility studies had been done and were now in design stage.

SEB owns and operates two other coal-fired power plants in Mukah and Kuching, which have an installed capacity of 270MW and 210MW respectively.
More power: SEB has to cope with the strong demand for power from industries in Sarawak Corridor of Renewable Energy. It needs five more hydro dams and one or two coal-fired plants like the Jimah plant in Negri Sembilan by 2020 to build up an additional generation capacity of 6,200MW from the present 1,250MW.

The planned new 600MW plant will be SEB's second single biggest investment in power generation after the 944MW Murum hydro dam, now under construction.

The Murum hydro dam is expected to come on stream in late 2013.

Sarawak Public Utilities Minister Datuk Awang Tengah Ali Hassan said last month that at least five more hydro dams and one or two coal-fired plants would have to be developed by 2020 as SEB needed to build up an additional generation capacity of 6,200MW from the present 1,250MW.

He said this was to meet the future rapid growth in power demand from energy-intensive industries in SCORE.

According to Sarawak Chief Minister Tan Sri Abdul Taib Mahmud, SCORE has attracted more than RM26bil in investments exceeding the target set two years ago.

“The demand for power from potential investors is now more than what SEB has to sell,” said the source, adding that more than 70% of the firmed 1,776MW from the 2,400MW Bakun dam had been committed.

SEB signed separate power purchase agreement (PPA) term sheets with the first batch of four pioneer SCORE investors - Press Metal Bhd, OM Materials, Asia Minerals Ltd and Tokuyama Corp - three months ago.

The four investors, which planned to invest some RM9.5bil in energy-intensive industries in Samalaju Industrial Park, Bintulu, required a combined long-term supply of 1,200MW to power their plants.

Press Metal is now constructing its proposed RM5bil new aluminium smelter. OM Materials has started work on a manganese and ferro silicon smelter project while Asia Minerals's investment is also in a manganese smelter.

Also under construction is Japan Tokoyama Corp's RM3bil polycrystalline silicon factory.

The source said the announcement of the PPAs with the first batch of SCORE investors and the inking of the PPA between SEB-Sarawak Hidro last month had sent a powerful signal to the market that Bakun power was in strong demand.

“There is now a tidal wave' of investments coming into SCORE. The supply and demand of power has shifted to SEB's favour,” added the source, recalling the different scenario last year as there were doubts by certain quarters if there were enough takers for Bakun power.

SEB is negotiating with 25 potential SCORE investors (compared with 16 in April) mainly in industries related to aluminium, manganese and silicon derivates.

These investors are mostly from Asia, the Middle East, India and the United States.