Friday 29 Mar 2024
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KUALA LUMPUR: The government has given the greenlight to accelerate the nation’s planting-up, paving the way for an upcoming combined cycle gas turbine known as Project 4A to be awarded through direct negotiations.

This comes on the back of last week’s blackout in five states.

According to industry sources, the Cabinet last week approved the award of Project 4A through direct negotiations instead of an open tender that would have added a year to the project’s timeline. The blackouts occurred a day before the Cabinet meeting on Wednesday.

It is not yet clear to whom the project will be awarded. Project 4A will be part of the fourth track of the nation’s planting-up exercise and commencement of the tender for the project was originally scheduled to be this year. The project will boast a larger capacity than the initially planned 1,000mw.

According to industry sources, the project may have a total capacity of up to 1,400mw.

Tenaga Nasional Bhd (TNB) recently called for an expression of interest in equipment, engineering, procurement and construction. The site proposed by TNB is in Pasir Gudang, southern Johor, where there are many existing gas-fired plants. This has led to speculation that TNB might be partnering with the Sultan of Johor to undertake Project 4A.

The Sultan, via his vehicle SIPP Power Sdn Bhd, has expressed interest in securing a power asset. SIPP Power partnered with YTL Power International Bhd to bid for the 2,000mw coal-fired plant, Project 3B, which was given to 1Malaysia Development Bhd (1MDB) earlier this year, although the YTL-SIPP consortium had put in a cheaper bid.

If this goes through, it will be the second power plant to be awarded on a direct negotiation basis after the Energy Commission awarded a 50mw solar power plant to 1MDB last month.

The accelerated planting-up and the blackout on May 7 point to low generation reserve margins, raising questions on the 20% to 25% margins that the regulators have bandied around.

The blackout in the five states, which occurred around 2pm when electricity demand rises to its daily peak, was the result of a load-shedding exercise or controlled blackouts by TNB after several key coal-fired power plants were shut down for repairs.

Based on documents seen by The Edge Financial Daily, it is learnt that an “orange warning” had been issued by TNB a day before the blackouts after two of its three 700MW coal-fired blocks in Janamanjung plant in Perak were forced to shut down after leaks were detected in the boiler.

At the same time, one 700MW block at 1MDB’s Jimah Power Station in Negeri Sembilan was also shut down for repairs on leaking boiler tubes.

Both the Energy Commission and TNB did not respond to questions on the matter from The Edge Financial Daily .

In the orange warning notice, TNB had warned that the condition was expected to persist until the affected units were restored.

According to industry sources, the leaks detected in Janamanjung were traced to the condenser and have been repaired. Jimah’s leaks, however, were inside the boiler and were much more complex and time consuming to repair.

The sudden shortfall of 2,100MW on May 6 prompted TNB to issue the orange warning in accordance with the grid code, indicating a high likelihood of “load shedding” within the next 24 hours.

Load shedding is undertaken when there is a sudden drop in the grid’s frequency, a result of under-supply or excessive demand. A sudden drop in frequency can cause power plants to trip, in order to protect their machinery.

With load shedding, TNB is able to restore frequency levels and prevent power plants from tripping. This is known as a cascade and can potentially cause a nationwide blackout.

It is learnt that at least two power plants tripped during the blackouts that occurred last week.


This article first appeared in The Edge Financial Daily, on May 16, 2014.


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