Power at Less than 6.25 sen per unit
2
Powerat lessthan 6,25sen per unit sv Jose Barrock arawak ttidro sdn nhd, the unit of the Minister of Finance Inc that man- ages the Bakun Hydro- electric Dam, is said to be close to concluding a power purchase agreement (PPA) with Sarawak Energy Bhd at 6.25 sen a unit, sources say. It is understood that Sarawak ttid- ro has budged from its earlierasking price of seven sen a kwh as pressure mounts on it to find a buyer for the electricity that will soon be generated by the nrvrz.+ billion Bakun dam.The first turbine is to start commercial operations in July. "The rate does not take into ac- count the water levy that Sarawak Hidro has to paythe state.If thewater levy is stripped out, Sarawak Energy pays only 5.25 sen per unit,which is a giveawayr" says a source. It is understood the state is charg- ing Sarawak Hidro a water levy of one sen per unit of electricity gen- erated.Sarawak ttidro is said to have givenwayon the levydespite its ear- lier grouses over other dams such as Pergau and fenyir in Peninsular Malaysia paying only about half a sen per unit. News reports had said that the one-sen water levy comes up to aboul RM15o million ayear. rhis effectively cuts Sarawak Ener' gy's cost to 5.25 sen per kWh,which ir closerto its earlier asking price of fivt sen, compared with Sarawak Hidro'r price tag of seven sen per kwh. Negotiations between Sarawal Hidro and Sarawak Energyto acquirt power from Bakun have been goinS on for several months now. Initially, Sarawak Hidro had start. ed rnrith a price tag of slightly belov Lo sen per kwh. rt was reported that at nine sen per kwh, the tariff ratr would have given Sarawak Hidro ar estimated revenue of about RM1.z billion a year, which would be palat able, considering its investment o: RM7.4 billion. The interest cost alone for tht loan to complete the dam comes tc RMToo million ayear and,after strip ping out maintenance costs,a higher rate would leave something for repay. ment of the loan. A rate of o.zs sen means the rev. enue for Sarawak Hidro will be con siderablylower. On the other hand, the rate woulc favour Sarawak Energy and its planr to sell the electricity to aluminiurr smelters establishing a presence ir Sarawak. col{TtituEs oN PAGE 6r
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Article from last week's (23-29 May 2011) The Edge Malaysia.
Transcript of Power at Less than 6.25 sen per unit
Powerat lessthan6,25sen per unitsv Jose Barrock
arawak ttidro sdn nhd,the unit of the Ministerof Finance Inc that man-ages the Bakun Hydro-electric Dam, is said tobe close to concluding a
power purchase agreement (PPA) withSarawak Energy Bhd at 6.25 sen a unit,sources say.
It is understood that Sarawak ttid-ro has budged from its earlieraskingprice of seven sen a kwh as pressuremounts on it to find a buyer for theelectricity that will soon be generatedby the nrvrz.+ billion Bakun dam.Thefirst turbine is to start commercialoperations in July.
"The rate does not take into ac-count the water levy that SarawakHidro has to paythe state.If thewaterlevy is stripped out, Sarawak Energypays only 5.25 sen per unit,which isa giveawayr" says a source.
It is understood the state is charg-ing Sarawak Hidro a water levy ofone sen per unit of electricity gen-erated.Sarawak ttidro is said to havegivenwayon the levydespite its ear-lier grouses over other dams suchas Pergau and fenyir in PeninsularMalaysia paying only about half asen per unit.
News reports had said that the
one-sen water levy comes up to aboulRM15o million ayear.
rhis effectively cuts Sarawak Ener'gy's cost to 5.25 sen per kWh,which ircloserto its earlier asking price of fivtsen, compared with Sarawak Hidro'rprice tag of seven sen per kwh.
Negotiations between SarawalHidro and Sarawak Energyto acquirtpower from Bakun have been goinSon for several months now.
Initially, Sarawak Hidro had start.ed rnrith a price tag of slightly belovLo sen per kwh. rt was reported thatat nine sen per kwh, the tariff ratrwould have given Sarawak Hidro arestimated revenue of about RM1.zbillion a year, which would be palatable, considering its investment o:
RM7.4 billion.The interest cost alone for tht
loan to complete the dam comes tcRMToo million ayear and,after stripping out maintenance costs,a higherrate would leave something for repay.ment of the loan.
A rate of o.zs sen means the rev.enue for Sarawak Hidro will be considerablylower.
On the other hand, the rate woulcfavour Sarawak Energy and its planrto sell the electricity to aluminiurrsmelters establishing a presence irSarawak.
col{TtituEs oN PAGE 6r
More power- guzzling factories
FRO}I PAGE 12
At present, two smelters have already ex-pressed interest to set up plants in Sarawak
- a CMS-Rio Tinto Alcan ioint venture andanother headed by SmelterAsia. SmelterAsiais a joint venture between Gulf InternationalInvestment Group Holdings sdn ghd andAlu-minium Corp of China.
on top of that, Sarawak Energy has inkeda PPAwith an existing smelter - Press Metalehd.
Other power-guzzling factories to be setup in Sarawak include OM Materials (a unit of
Australia-based OM Holdings Ltd),Asia Miner-als Ltd andtokuyama Corp.
Previous reports had stated that the smelt-erswerewilling to payfourUS cents per kwh,which at the time of the negotiations workedout to 13.6 sen at an exchange rate of RM3.4to the US dollar. rf the reports are accurate,Sarawak Energywill enioygood margins if itgets the Power at 6.25 sen Per unit.
Other than Bakun,sarawak Energyhas theoption of buying electricity from the 944mwMurum Dam, which is being built now andtargeted to generate electriciffby 2oI3. tr
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