[ad_1]
KUALA LUMPUR, Oct 25 — The government has terminated four independent power producers (IPP) in a move that will potentially save consumers up to RM1.26 billion in electricity tariffs.
Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin told Parliament during Question Time that the move will also optimise the nation’s power capacity.
“Around 30 per cent of the electric bill we pay today is for capacity payment and the capacity payment depends on electricity supply reserve margin and the terms in the Power Purchase Agreement (PPA) with the IPP.
“The nation’s electricity reserve margin is still at an optimum level of 32 per cent; if these projects are allowed to continue, it will increase our reserve margin to a far higher level from what is needed and it will increase our capacity payment.
“When the capacity payment is increased, the electricity bill will also increase,” said Yeo.
The terminated IPP are: Malakoff Corporation Bhd and Tenaga Nasional Bhd (TNB) 700 MW Gas Power Plant in Kapar, Selangor; Aman Majestic Sdn Bhd and TNB Gas Power Plant 1,400 MW Gas Power Plant in Paka, Terengganu; Sabah Development Energy Sdn Bhd and SM Hydro Energy Sdn Bhd 300 MW Gas Power Plant in POIC Sandakan Sabah and; Edra Power Holdings Sdn Bhd 400 MW Solar Power Plant.
Yeo also gave assurances that the government is free from any legal or financial implications from terminating these projects since the IPP have breached the terms and conditions in the offer letter.
“These projects were awarded through direct negotiaton and it could not guarantee competitive terms for the government in the PPA.
“The government is committed to ensure that future projects will be conducted through open tender,” she said.
Source link
