Press statement by Kua Kia Soong, SUARAM Adviser 24 Sept 2019
During the week when the whole world was marching for change to address the climate emergency, was there outrage among Malaysians over the shocking “business as usual” article by Mangai Balasegaram, “We’re polluting the air to generate power we don’t need”? (The Star, 22 Sept 2019)
Mangai was highlighting the abominable RM3.5bil contract awarded to Tadmax Resources to develop a coal-fired power plant in Pulau Indah, Klang:
“We are approving power plants we don’t need, leaving us with way more power than we’ll ever need while also polluting the environment. Such deals are also binding for two decades or so, limiting supply options, such as using cleaner energy to tackle the climate crisis… Why so many plants? Suffice to say that the energy industry is one of the most lucrative around with opportunities for billion-dollar deals…”
Was there an open tender to this contract as promised by the Energy Minister? Reporters should ask her. So what has changed in “New Malaysia”? And what sort of “Clean New Energy” is this coal fired plant going to produce? How much haze is the PH government going to contribute to our Malaysian air?
Just like the many power projects I blasted during the Nineties in Parliament (See my “Damned Dams & Noxious Nukes”, Suaram 2013), experts have questioned awarding the contract to a company with no experience in the field. As with the other IPPs (Independent Power Producers) in the Nineties, Tadmax has apparently roped in Korean Electric Power Corp to provide the technological skills needed for the project.
Mangai points out that we produce way more power than we’ll ever need; Our “reserve margin”, or generation capacity above peak demand, was 36% in Peninsular Malaysia. It was the same with the Bakun dam which had an installed capacity of 2400 MW when the total electricity demand for Sarawak during the Seventies was just 1000 MW. The World bank has recommended reserve margins of not more than 10 per cent otherwise all that plant is sitting idle and costing us a lot of money.
The Failure of our Privatised Services
While the IPPs have reaped millions through Mahathir’s privatisation exercises since the Nineties, for privatisation to be in the rakyat’s interest, certain criteria must maintain:
(i) The privatised service must be cheaper and better than that formerly provided by the state; If not, what benefit is it to the people?
(ii) The privatised service must be more efficient than that provided by the Government.
(iii) The privatised industry must not have assistance from the Government in order to be viable.
Here, the IPPs have been relying on their connections with the ruling elite for access to licences and other conveniences, especially sources of funding. They have failed to get international banking sources and have instead relied on EPF, the pension funds of Malaysian workers for funding. In terms of unit cost, the electricity which these IPPs produce is more expensive and thus fails the first criterion set out above. Thus, it looks as if those in power are more interested in making mega bucks out of the mega projects rather than a responsible and sustainable energy policy and plan.
Lack of Planning and Prudent Energy policy
The country is told that excess capacity can be exported. The on-off submarine cable project to transmit Bakun energy to the peninsula since it was first brought up in the Eighties shows the alarming lack of planning and total energy policy. The on-off contracts with the aluminium smelters since the Seventies reveal the complete absence of concrete energy demand projections. The intention to export energy from the mega dams in Sarawak to Brunei, Sabah and Kalimantan likewise exposes the indiscriminate hunger for mega projects without the required feasibility studies and realistic demand projections.
In Malaysia, we do not have a prudent energy policy and that is why we will continue to see such dirty business as usual. We do not even have a proper energy needs inventory giving us reliable data on the possible sources of renewable energy and detailed breakdown of domestic and industrial consumption. All that we are given by the Government whenever energy needs are discussed are total production and consumption patterns. This is not good enough.
If the new Prime Minister really wants to know the state of the Malaysian energy industry, he should ask for independent audits on every power station in the country. These should preferably be done by reputable international audit authorities from outside Malaysia. Since the Nineties, I have raised questions about power stations that are not working at full capacity and other questionable practices.
At a time when the price of solar power has dropped so dramatically and the planet is in crisis, we need to tap the vast potential for renewable energy resources in Malaysia and the Government is expected to play the main role.