KUALA LUMPUR (Jan 6): Comintel Corp Bhd is now faced with another delay in providing renewable energy (RE) to Tenaga Nasional Bhd (TNB) due to problems relating to feedstock and its synthesis gas (syngas) engine.

The company first announced the delay last year after a gasifier system failed to operate at optimum capacity.

In a filing with Bursa Malaysia, Comintel said it had requested a second extension for the date of commencement of its Feed-in-Tariff (FiT) to May 31, 2016 from Dec 31, 2015.

The Sustainable Energy Development Authority Malaysia (SEDA) had approved Comintel's request for an extension in a letter dated Dec 30, 2015 received yesterday (Jan 5).

"The reason for the FiT commencement date extension was that the company needs time to set the syngas engine to run in harmony with all the other seven engines," the filing read.

"Besides that, we also have feedstock supply problem, which is the supply of feedstock was not in accordance with the agreed terms of the contract with the supplier," it added.

Comintel said the "out of size" feedstocks have caused disruption to its automated material handling system.

Comintel said its unit Comintel Green Technologies Sdn Bhd (CGT) is in talks with the supplier to ensure that the supplier provides consistent quality woodchips that are within the specification as agreed in the contract.

The company said, barring any unforeseen circumstances, CGT will be able to meet the new extended FiT commencement date.

"Therefore, this green energy venture by CGT, which is initially expected to contribute positively to the performance for financial year ending Jan 31, 2016, will only start contributing in financial year ending Jan 31, 2017," the filing read.

Comintel had announced to Bursa Malaysia on July 22 last year that its RE supply to TNB will be delayed by seven months as its gasifier system is not operating at its optimum capacity to produce syngas in a stable condition to supply to the syngas generator to produce electricity.

SEDA had given its approval for the FiT commencement date to be extended to Dec 31, 2015 from May 31, 2015.

The group had estimated that the annual revenue contribution from the RE business is RM6.67 million.

CGT was granted a FiT approval on July 9, 2014 by SEDA to convert biomass into RE and supply it to TNB at 42.31 sen per kWh for a 16-year period.

CGT had in June 2015 signed a RE power purchase agreement with TNB to start supplying the RE from May 31, 2015.

Comintel shares closed one sen or 1.2% lower at 82 sen, with a market capitalisation of RM114.1 million.

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