THE Government would be hard pressed to cancel the Pulau Indah independent power producer (IPP) project as the deal was already signed long ago.
“The Government has to respect the sanctity of a contract. However, moving forward, we need to impose a moratorium on IPP projects for some years.
“Renewable energy or not, we need to bring down our high electricity margin of 40%,” Parliamentary Select Committee for International Relations and Trade chairman Wong Chen told FocusM.
Last week, Parti Sosialis Malaysia (PSM) urged the Government to scrap the Pulau Indah IPP project and invest in green technology instead.
Its central committee member Sharan Raj said the plant would produce 1,200 megawatts (MW) of electricity, raising Malaysia’s electricity margins between 24% and 48% until 2030.
“For a tropical nation like Malaysia, the maximum reserve margin needed would be 20%. Beyond the threshold, the public will be forced to pay higher tariffs for unused electricity,” Sharan told FocusM.
In November last year, former Energy, Science, Technology, Environment and Climate Change minister Yeo Bee Yin said the Government would continue with the Pulau Indah IPP plan due to the need to raise power supply in the central region, to cope with rising demand.
She added that in the event of a power shortage in the central region, the northern and southern regions would not be able to help much due to limited transmission capacity.
Subject IPPs to public scrutiny
Touching on the matter, Wong Chen said that based of Malaysia’s gross domestic product (GDP) growth rate and three-year lead construction time, the nation only needs around 12% to 15% of electricity reserve margin.
Due to the high profits involved, he also said that IPP projects must be open to public scrutiny as most times, the projects are always plagued with allegations of cronyism.
“While the public may not be paying higher electricity tariffs directly but we will be paying via Petronas, which is subsidising the IPPs,” he said.
On that note, Wong Chen said the Government should take back control of power generation and subject future IPP projects to Parliamentary scrutiny.
“Malaysia as a big producer of natural gas will likely continue to produce electricity using this model but we definitely need to stop all coal power plants.
“And a balance of 70% natural gas and 30% renewable energy will probably get us to a carbon neutral position by 2030,” the Subang MP opined. – Dec 13, 2020.
