The Malaysian Insight

PUTRAJAYA has cancelled four independent power producer projects which would cause electricity hikes if went ahead with.

Energy, Science, Technology, Environment, and Climate Change minister Yeo Bee Yin said by building more IPPs, the capacity payment would increase, which would translate into electricity price hikes.

“The total margin of electrical supply reserves in the country is at an optimum level, which is 32%. If these (IPP) projects continue. It will raise the reserve margin to a higher level than the supply needed, and this will raise the capacity payment.

“When the capacity payment increases, the electricity will be also be raised,” she told the Dewan Rakyat today.

Yeo added the government will save RM1.26 billion by cancelling the four IPP projects.

The DAP lawmaker also said Malaysia is already at “optimum” capacity payment for power supply.

The IPP projects were also cancelled as the previous administration awarded the contracts via direct negotiations.

“These projects were awarded by direct negotiation and did not fulfil the competitive terms for the government in the power purchase agreement,” Yeo said.

Among the IPP projects that were cancelled were gas projects in Kapar (Selangor), a gas project in Paka (Terengganu), a gas and hydro project in Sandakan (Sabah) and a solar project for Ezra Power Holdings. – October 25, 2018.