The state of Sarawak in Malaysia is strategically developing its hydroelectric power resources in a bid to diversify and develop its economic potential.

The region is blessed with flourishing rivers and the state and low population density and limited domestic demand has left it with a huge power surplus that can be made directly available to heavy industry. Demand stands at 1700 MW-1800 MW, well below its 3600 MW installed capacity.
Bakun dam
Samalaju Industrial Park — a 7000-hectare area in northern central Sarawak — has persuaded a raft of smelting companies to relocate in recent years to produce aluminium, ferrosilicon and manganese alloy.

Several of these companies have shifted operations away from China in the face of rising costs. Sarawak, meanwhile, can offer highly competitive energy costs tied into supply contracts that can last up to 20 years, as well as low trade duties.

Sarawak’s biggest dam, the eight-turbine 2400 MW Bakun dam, supplies all of the industrial park’s power requirements. But energy demand is expected to surge over the next decade. The authorities’ long-term plan to meet this demand is to expand installed capacity to 6000 MW by 2020 and 12000 MW by 2035.

Two large new hydroelectric dams are set to be located in Baram and Baleh, each with installed capacity of 1200-1300 MW, according to FT Confidential Research, a Financial Times research service.