7/17/2017 Doubling up in Malaysia - International Water Power

Doubling up in Malaysia
1 April 2003

David Hayes reports on the Malaysian Government's plans to

increase hydroelectric power output in the country

GOVERNMENT plans to double hydroelectric power generation by the end

of the decade are back on course again following the recent award of the
civil works contract for Bakun dam in Sarawak, East Malaysia. Construction
of Malaysia's largest hydro power scheme is due to be completed in five
years time and the first electricity supplied to customers by the end of 1997.
Several other hydroelectric schemes are also due for completion during the
same period as Malaysia expands hydro power and coal-fired generation to
reduce dependence on gas-fired generation. Plans include the
development of pumped storage power in Peninsular Malaysia to make use
of growing off-peak coal-fired power supplies.
Hydro power represents the largest indigenous renewable energy resource
in Malaysia. The total amount of technically exploitable hydro potential
countrywide is 123,000GWh per year. About 70% of this lies in the East
Malaysian state of Sarawak due to regular tropical rainfall and the state's
topography which is characterised by numerous rivers flowing between
steep, narrow, interconnected ridges rising up to 1200m high.
In a detailed survey on hydro potential carried out in 1980, a total of 51
hydro projects with an exploitable potential of 20,000MW and energy output
of 87,000GWh per year were identified in Sarawak. The power from these
projects constitutes the major portion of Malaysia's unexploited hydro
power resources.
Bakun dam
Among the various priority dam sites identified in Sarawak, the Murum and
Bakun hydroelectric schemes are two of the largest schemes for which
feasibility studies have been carried out, confirming their technical and
economic viability. In 1994, the government decided to implement Bakun
dam as an independent power producer (IPP) project targeted for
commissioning in 2003. However, following the impact of the Asian financial
crisis in 1997-98, the original government-appointed Bakun dam project
developer, Sarawak tycoon Ting Pek Khing, was unable to proceed with the
project and returned it to the government receiving US$110M
compensation.
After deferring the project for three years the government has decided to
revive Bakun, which will now be undertaken by Sarawak Hidro Sdn Bhd, a
wholly-owned subsidiary of state-owned Minister of Finance Incorporated.
Business analysts in Malaysia expect the government will try to privatise
the Bakun project again with wealthy businessman Syed Mokhtar
understood to be negotiating to buy a majority stake in Sarawak Hidro.
Engineering work began on 8 October 2002 on Bakun hydroelectric dam
scheme and is being carried out by the seven-member Malaysia-China joint
venture Berhad, while the main Chinese partner is China Water Resources
and Hydro Power Engineering Corporation.
Construction work was completed early last year on the US$78.9M Bakun
cofferdam and three river diversion tunnels, the first phase of the massive
dam project. The US$2.4B hydroelectric dam project, which involves
flooding an area the size of Singapore, will involve relocating about 10,000
local inhabitants away from areas that will eventually lie under water.

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Bakun dam is scheduled to commence commercial operation by the fourth

quarter of 2007. The project will have a total generating capacity of
2400MW, of which 1700MW is firm capacity.
Sarawak Hidro has tendered contracts for the dam's electrical and
mechanical works. Bids for the first set of four 300MW turbine generators
have already been submitted and are being evaluated for the contract to be
awarded.
Bakun dam power house will to be installed with eight 300MW turbines
eventually. As Bakun will meet East Malaysia's growing power needs for a
number of years, no other major hydro power development schemes are
likely to be needed for some time afterwards.
Aluminium smelter
Government support for Bakun dam is due to the prime pumping effect the
massive project will have on the East Malaysian economy. Originally Bakun
was planned to supply 1500MW of its power output to Peninsular Malaysia
through a submarine transmission cable to help diversify the Peninsular's
growing power needs.
Constructing the submarine cable has now been abandoned as too costly.
Instead, Bakun's largest customer will be an aluminium smelting plant that
will be built as part of Sarawak's economic diversification programme.
At the end of March 2003, Sarawak Hidro and Smelter Asia Sdn Bhd
announced they had reached agreement on the proposed bulk sale and
purchase of electricity to be generated by Bakun dam, following the earlier
signing of an MoU between the two parties.
Smelter Asia, a joint venture company between Gulf International
Investment group and DUBAL, will develop an aluminium smelting plant on
a 250ha site at Similajau near Bintulu on the coast of Sarawak.
Construction of Smelter Asia's aluminium smelting Phase 1 project for the
production of 250,000 tonnes of aluminium ingots per annum is due to
begin in 2005.
According to the recently signed power purchase agreement the amount of
electricty to be purchased under the Phase 1 project is about 450MW.
However, the aluminium smelting production capacity is expected to double
to 500,000 tonnes when Phase 2 is completed by 2012. As a result, the
power purchase requirement will double to 900MW.
Electricity to be sold by Sarawak Hidro to Smelter Asia will be transmitted
to the smelting plant by transmission lines to be constructed and owned by
Sarawak Electricity Supply Corporation (SESCo), the state's power
generation, transmission and distribution utility. Smelter Asia will enter into
a separate power transmission agreement with SESCo for this.
In addition, a three way agreement between Sarawak Hidro, SESCo and
Smelter Asia will be necessary to ensure an unbreakable supply of
electricity to the aluminium smelting plant.
SESCo will also supply electricity from Bakun dam to its existing
customers. The utility plans to build a 700km double circuit HV transmission
line from Bintulu to the state capital Kuching to reinforce the existing double
circuit line and supply up to 1000MW of electricity from Bakun to customers
along the transmission route.
Transmission schemes
Elsewhere in East Malaysia, Sabah Electricity Sdn Bhd (SESB), an 80%
owned subsidiary of Tenaga Nasional Bhd (TNB), is constructing phase one
of a US$254M East-West power transmission grid interconnection scheme
to enable the utility to reduce its dependency on diesel and oil fuels by
purchasing power from Bakun dam.

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SESB supplies electricity in the state of Sabah. The first stage of the project
connecting the areas of Sandakan, Lahad Datu, Tawau and Semporna was
originally scheduled for completion by the end of 2001 but has been
delayed to next year due to various factors including problems in obtaining
way-leave permission.
Stage two of SESB's grid interconnection is also due for completion by the
end of 2004, while stage three of the power transmission line is due to be
completed in 2005. Once the interconnection is completed and Bakun dam
starts up, the power supply situation in Sabah will be greatly altered.
Sabah also has its own hydroelectric power potential that has been studied
since 1994 and could be developed in the future. Several mini hydro
schemes with capacities of 250kW to 1MW have been suggested to
replace oil-based plants currently serving as isolated stations. Two larger
hydro projects identified for implementation are the 165MW Liwagu hydro
scheme in central Sabah and the 150MW Upper Padas hydro project in
southern Sabah which would be able to generate a combined 1300GWh a
year.
Peninsular Malaysia
Meanwhile, in Peninsular Malaysia where 18M of Malaysia's total 23M
population lives, government policy since the 1980s to utilise the country's
large natural gas reserves has led the Peninsular to become heavily reliant
on gas-fired power generation.
While proven recoverable gas reserves lying offshore Peninsular Malaysia
are sufficient to last another 20 to 30 years at the current rate of
consumption, state-run Tenaga Nasional Bhd (TNB) plans to develop a
more balanced power generation fuel mix programme by increasing the
proportion of coal-fired and hydro power generation in future.
Currently about 80% of Peninsular Malaysia's electricity output is generated
by gas-fired stations while hydro schemes and coal-fired stations account
for about 8.5% each of the Peninsular's power production. In contrast, oil-
fired units are used to generate just 2% of total power output.
TNB's plans call for hydroelectric and coal-fired generation to increase to
20% each of Peninsular Malaysia's total electricity output before 2010. TNB
also plans to use coal-fired generation to increase hydro power output. TNB
and Tokyo Electric Power Company of Japan have carried out a feasibility
study on building a pumped storage scheme in Pahang State. TNB
proposes to use off-peak power generated by the almost complete
2100MW Manjung coal-fired station to pump water into the upper reservoir
at night for use generating peak load electricity the following day.
Development of hydro in Peninsular Malaysia dates back about 75 years to
the pre-Second World War British colonial period. Malaysia's oldest
hydroelectric scheme is the Chenderoh scheme completed in 1927 in
Perak State where the dam was built to supply electricity to tin mines.
Rehabilitation work on the dam, which is part of the seven station Sungai
Perak hydro power scheme, was completed in August 1999 when
installation of three 10MW turbine generator sets was completed.
In November 1998, TNB formed a subsidiary, TNB Hidro Sdn Bhd, to
manage, operate and maintain all TNB hydro power stations in Peninsular
Malaysia including all generators, turbines, pumps, dams, spillways, gates,
waterways and catchments.
Currently TNB Hidro operates 43 generating sets installed in 15 hydro
power schemes. TNB's largest dam is the 600MW Pergau scheme.
TNB's plans to develop hydro power in Peninsular Malaysia include the
construction of Kenyir II, the 300MW phase two scheme that will involve
installing two 150MW turbine generating sets. The Japan Bank for
International Cooperation has agreed to fund the project for which electrical
equipment bids have been tendered and are now under evaluation.

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Bidding opened in September 2002 and closed in December 2002. The

project is an extension of Kenyir I.
Large hydro
Another area of interest to TNB is the rehabilitation and upgrading of
various existing hydro power schemes. Contracts are due to be awarded in
2003 to rehabilitate the Cameron Highlands cascade scheme running over
50km in length through three states, Kelantan, Pahang and Perak, which
consists of seven mini hydro and regular hydro power houses and includes
three reservoirs.
The Cameron Highlands rehabilitation project is not being publicly tendered
and is expected to be awarded on a negotiated basis. The smaller units
range from 800kw to 2.5MW in installed capacity while larger units installed
in the main stations include four 25MW and three 50MW turbine generating
sets. The various turbines are understood to average about 40 years old.
Rehabilitation of each hydro station will be undertaken in two stages.
Although the turbine generators can have an extended life, the auxiliary
parts will need replacing. Also, TNB is asking for some automation to be
installed to reduce manpower and help with operations and maintenance

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