Fuziah Salleh

Mendamba Politik Baru


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Don’t blame IPPs for energy woes: group


Dec 3, 08 2:24pm

The Association of Independent Power Producers (Penjanabebas) fended off accusations today that its members are to blame for the billions of ringgit ‘wasted’ in paying for the unnecessary excess in energy supply.

While energy reserve margins are essential to ensure a reliable supply of electricity, the actual amount of standby capacity is a matter of debate, argued association president Dr Philip Tan in a statement to Malaysiakini.

He said that the final decision as to how much of such reserve energy is needed is best left to the government.

Tan was responding to last week’s report that taxpayers were paying RM8 billion to IPPs for providing unnecessary excess of backup energy.

Last Thursday, Kuantan MP Fuziah Salleh argued that the country needs a reserve energy margin of only 20 percent, instead of the existing 40 percent.

She said that billions of ringgit could have been saved by lowering the reserve energy margin instead of paying IPPs to produce power which is ultimately not used.

Fuziah was responding to Deputy Energy, Water and Communication Minister Joseph Salang, who had revealed in Parliament that state-owned Tenaga Nasional Berhad paid 13 IPPs some RM43 billion for energy, including the reserves, over the past four years.

She urged the government to “stop burdening the people” by reining in the IPPs that she accused of “acting without any accountability.

IPPs: We cannot resolve energy issues alone

However, Tan said reserve margins are essential for “integrated grid system supply reliability and security”, citing the power blackouts in the early 1990s as serving to underscore the importance of having a reliable supply to meet rising demands.

He went on to explain that the magnitude of the reserve margin for a grid system would depend upon “the system size, the availabilities of the power plants, and hydrological inflows to the reservoirs of the hydro power plants as well as the security level of supply planned for the grid system.”

“Some countries choose to have higher reserve margins (70 percent in Singapore) while others may opt for a lower standby capacity,” said Tan.

“While the margin of standby capacity is a source of debate, the association’s stand is that the matter of energy supply versus demand is best left to the authorities entrusted with the planning of such matters,” he added.

On the claim that RM8 billion was being wasted on payments to IPPs, Tan said this and other issues, such as the perceived high tariff rate borne by taxpayers, is not for the association to answer alone.

“While it is convenient to blame the IPPs for the shortcomings in the energy sector, including the perceived high tariff rate, it should be recognised that an industry-wide restructuring may be the best option to address these shortcomings.

“The IPPs, as one of the many players in the sector, cannot by themselves resolve the industry’s issues. It is the collective responsibility of the regulators, industry players and other stakeholders to restructure the industry towards a more sustainable model.”



December 7, 2008 Posted by | Politics | 6 Comments