KUALA LUMPUR (Dec 19, 2012): Tenaga Nasional Bhd (TNB) will be participating in the tenders to build two coal-fired power plants with total capacity of 3,000-megawatt (MW) in the country, said its non-executive chairman Tan Sri Leo Moggie.
"Yes, we will be bidding," he told reporters after the national utility company's AGM here yesterday.
The Energy Commission (EC) had on Monday announced that it will be calling for open tenders for the construction of two power plants: the first will be for a 1,000MW plant on a fast-track basis and the second will involve a 2,000MW plant at a new site.
"The fast-track 1,000MW will be operational by October 2017 and the second power plant, which is to be developed at a greenfield site, will be commissioned by 2018/2019," the EC had said.
TNB CFO Fazlur Rahman Zainuddin said the company's net gearing is currently at a "manageable level" of 38%.
"Typically, utility companies are comfortable with the level of gearing of between 55% and 60%. (As such,) we still have some room to gear up," he added.
"Having said that, gearing is something that we have to evaluate according to the economic situation. If the economic situation remains uncertain, we have to be more prudent."
Meanwhile, Moggie said TNB, which is investing RM9.7 billion in the next five years to expand its capacity to meet the growing electricity demand in the country, is continuously exploring the purchase of more power assets in Southeast Asia and the Middle East.
"While looking for opportunities abroad, we are sensitive to the fact that we will only consider investing after completing a due diligence and that the risk and return components are fully analysed," he said, adding that nothing has been finalised as yet.
TNB president and CEO Datuk Wira Azman Mohd said electricity demand in the country is expected to grow by 3.5% to 4.6% per year over the next five years, adding that he expects average coal prices to remain at US$100 per tonne for FY13.
He said along with the New Economic Model and the Economic Transformation Programme, electricity demand is expected to hit 20,699MW from 15,826MW as at Aug 31 2012.
TNB is currently building two hydroelectric projects in Hulu Terengganu, Terengganu and Ulu Jelai, Pahang; a biomass plant in Jengka, Pahang in collaboration with Felda Group; and a coal-fired power plant in Manjung, Perak.
These projects are expected to boost the country's electricity capacity by 1,632MW. TNB serves an estimated 8.3 million customers in Peninsular Malaysia, Sabah and Labuan.
On the fuel compensation arrangement, Azman said TNB has submitted its claims for April to August 2012 to the government to seek compensation from Petroliam Nasional Bhd (Petronas) for the additional fuel cost incurred.
"We are waiting for the (reimbursement) from Petronas and the government," he said.
To recap, gas supply from Petronas was disrupted in FY11 following a series of scheduled plant shutdown for maintenance as well as cessation of supply from Petronas' Bekuk plant following a fire that broke out in December 2010. From the required volume of 1,250 mmscfd, the average daily gas supply fell below 1,000 mmscfd in H2 FY11, forcing TNB to substitute it with the more expensive oil, distillate and coal.
The tight spot was expected to ease when the LNG re-gasification plant in Malacca commences operations in 2013, but there has since been a delay in its commissioning.
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