KOTA KINABALU: Site clearing work for the long delayed 300-megawatt power plant in Lahad Datu has finally started and a final decision on what type of fuel will be used to power the facility will be decided by January, said Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili.
Met after the launch of the Sustainable Energy Convention here yesterday, he said the ministry is currently conducting a comparison study for two possible fuel options – natural gas or liquefied natural gas (LNG).
“We have to make a conclusion on the matter in the next 60 days. Actually Petronas has started spending some money, it is just that given the existing price of gas and the intention of the government to slowly reduce the subsidy of gas and fuel, so we ought to look at the whole prospect for comparison,” he said to reporters.
Maximus said a rough estimate on the cost for each option was already available but a proper study needed to be conducted, to detail out all short and long-term factors.
Among the things that needed to be taken into consideration included the transportation of the fuel to be used, he added.
“My own view is that if the difference in cost is not that huge, then maybe gas is the way to go for the long term. At least, you could have a spin off, other industries can benefit and be developed.
“I hope not later than January we will have a clearer picture. We don’t want it to be delayed further, we want to proceed because it was supposed to come on stream two years ago. We must harvest the 300MW no matter what,” he said.
The proposed power plant was initially mooted some years ago as a measure to improve power security in Sabah, but was later scrapped ahead of the May election, following strong objections from quarters who were concerned about the environmental impact of using coal as fuel.
Using the gas to be extracted from Sabah Oil and Gas Terminal (SOGT) in Sipitang as an alternative has been floated since the beginning but concern on the huge additional cost in sending the fuel to the east coast kept the idea from being materialized.
Increasing power demand and pressure to improve current electricity services in the State left the government with no choice but to reconsider the option.
“We lost a lot of time, almost seven years, that’s part of the reason why the (capacity increase) margin has not been very good. That’s why we have to set up the 100MW and 300MW plants in Sipitang to compensate for that.
“The Federal Government has approved the plant to be powered with either LNG or gas. We are looking into this, my ministry will brief the State Government on whatever decision that will be made,” said Maximus, adding that the cost factor for LNG at the moment was considered prohibitive.
Maximus said Prime Minister Datuk Seri Najib Razak has instructed his Ministry to decide on the matter within the next 60 days.
“We hope this can be clarified by the New Year. I think both TNB (Tenaga Nasional Berhad) and Petronas are also waiting on this, because they are the partners in this project,” he said.
Meanwhile, on related development, he said, the additional 400MW from the two facilities in Sipitang would be enough to accommodate the State’s increasing demand for at least three more years, once they are completed and fully operational.
For the long term, he said, several renewable projects were in the pipeline, including the Ulu Padas Hydro Station, which was expected to come online four years from now, to produce up to 180MW.
Additionally, 30 percent from the existing generating capacity could be saved from efficient energy usage, but more has to be done to increase awareness and to get the public and the industry on board to consume electricity efficiently.