Malaysian dam gets revival
Malaysia’s government announced on 28 February 2001 that it would be reviving the once-shelved Bakun hydroelectric dam project. The originally envisaged 2400 MW capacity version, costing around RM13.5bn ($3.6bn), is expected to be completed within six years despite environmental concerns.
As a change to the original plans, Energy Minister Datuk Leo Moggie said that the dam would now supply power to the eastern Malaysian states of Sabah and Sarawak. Power generated in the jungles of Sarawak could also supply Kalimantan in Indonesia. The planned construction of a 600 m underwater cable to west Malaysia has been scrapped due to high costs and fears of excessive power loss along what would have been the world’s longest submarine cable.
The government has invited five companies to bid for elements of the project as part of efforts to fast track the venture and save costs. State-owned company Sarawak Hidro Sdn Bhd is set to take charge of the main construction.
Current work on river diversion tunnels is 97 per cent complete while relocation of the indigenous community is now settled. With local elections pending, Sarawak chief minister Tan Sri Abdul Taib Mahmud said that the project would bring net benefits to the local people and boost businesses.
National electricity demand is reported to be growing at 8-10 per cent per annum, and speculative interest in Sarawak-based companies rumored to be involved in Bakun has risen.
Korea to break up utility in 2001
State-owned Korea Electric Power Corp (Kepco) has gained shareholder approval to break up the sprawling utility by April 2001. Plans were announced to split Kepco’s operations into five independent units with the actual sale of the firms to commence in February 2002.
Plans for Kepco’s break up, which is 52.2 per cent government-owned, had led to fierce political debate with the opposition siding with trade unions to block debate. Opponents said that Korea’s energy security would be undermined by the move to deregulate the utility which holds a 94.2 per cent share of South Korea’s power generation market.
Control of nuclear power will be retained by Kepco. As a major change to operations, the five new power firms will trade electricity through a Korean Power Exchange due to be set up on 2 April 2001.
Net profits for the year are expected to reach $1.93bn up 38 per cent from 2000 which significantly benefited from the sale of the two power plants and a 10.5 per cent stake in Powercom. Shareholders approved a 2000 dividend of 12 per cent and nine per cent for government holdings.
China to add on more energy
South China’s Guangxi region is to build more power plants to increase installed capacity to 9 GW in the tenth Five-Year-Plan period (2001-2005). Six new hydropower stations are planned in addition to Longtan hydropower station which is now under construction on Hongshui River. By 2005, the region’s total installed capacity is expected to rise to 11.2 GW.
A state official said that Guangxi will build six new hydropower plants in addition to Longtan, now under construction on Hongshui River.
Meanwhile, a group of China’s top advisory bodies has proposed developing wind power faster in northern China’s Inner Mongolia. China’s total wind power supplies have been estimated at 253 GW, with Inner Mongolia accounting for 100 GW.
Dabhol offers three options
The Dabhol Power Company has offered to sell the entire foreign equity in its integrated power-and-LNG terminal project to the Union government and the government of Maharashtra for $1bn. Under current arrangements, the project sponsors Enron, GE, Maharashtra State Electricity Board (MSEB) and Bechtel are pumping in $1120m as part of their equity contribution to the two-phase project.
US-based Enron has offered the equity along with $500m of non-guaranteed foreign debt to be taken over by the state government.
As an alternative option, the firm has also offered to defer operation of the second phase of the project consisting of 1444 MW until LNG is available. Option three seeks concessions such as ‘mega status’ for the projects, giving 100 per cent tax exemption for ten years and import duty exemption on capital goods.
PowerGen sells stake to repay loans
PowerGen has completed the sale of a 49.95 per cent stake in Auspower Pty Ltd., the Holdings Company of Yallourn Energy, for à‚£286m ($409m) and a 20 per cent equity stake to a new joint venture which is 80 per cent owned by CLP Power International. Funds from the sale are to be used to reduce the firm’s bank borrowings.
Yallourn Energy owns a 1450 MW power station and an associated brown coal mine in the La Trobe Valley in the Australian state of Victoria. PowerGen retains an effective stake in Yallourn of 18 per cent.