Oil and gas rich Sabah looking at coal again

Environmentalists continue to pose questions on why Sabah, with its vast renewable and green energy options, continues to look at coal as as a solution

By Marvin Agustin

KOTA KINABALU: Speculations are rife here that Sabah is re-looking the option of using coal as a power source despite Prime Minister Najib Tun Razak’s decision in 2011 to call off  the construction of a proposed coal-fired power plant in state following a widespread public outcry over its effects on the environment and health.

Sabah Chief Minister had also toed the line and announced that his government had scrapped plans to  use coal as a power source. Skeptics at the time had opined that the decision was “ploy” because of the 13th general elections.

And now that the GE13 is over, those with business interests, observers said will likely try to push for the coal option to be considered as the state’s final solution for its power woes. In fact FMT recently learnt that various parties within Musa’s administration are “re-looking” at coal as a power generation option to solve the shortage of energy supply in Sabah.

The move apparently was triggered by Sabah Electrical Sdn Bhd Managing director, Abdul Razak Salim’s admission last year that they were struggling to meet the power demands in Sabah following the damage of Independent Power Plants (IPPs) generators that led to Sabah Grid Network System losing 95MW of its power.

The question of whether the new Barisan Nasional governments at state and federal levels will still stick to their promises not to use coal and instead rely on renewable energy sources in Sabah is in doubt.

The 13th Malaysia general election saw the appointment of Kota Marudu MP, Maximus Ongkili as the Minister of Energy, Green Technology and Water. He replaced Sarawak’s Peter Chin Fah Kui. As it stands Ongkili is the only man standing in the way of re-tabling the coal option for oil and gas-rich Sabah.

The coal industry as a whole has been struggling amid continued soft demand that has driven down prices as many utilities companies worldwide turn to cheaper natural gas for their power-producing needs.

Coal prices dips
According to IHS McCloskey, and Petersfield, England-based data provider, as at the end of April 2013, coal prices had dropped US$2.55 (RM7.73) to US$85.85 (RM265.46) a tonne. With coal prices ‘dropping’, the option is looking to be more and more feasible.

Kalimantan, which borders Sabah and Sarawak, is the biggest exporter of low grade coal. It it has seen demand from China fall as their stock pile rises. Kalimantan is now seeking new markets.

Sabah seems to be the fastest solution as the demand for cheap energy is high in the power-starved state. In March 2009, Prime Minister Najib Tun Razak agreed to the sale of excess power from Sarawak to Kalimantan but not to Sabah.

The excess of about 2,000MW from Sarawak could solve Sabah’s energy problem especially in east coast of the state which is only able to generate 950MW. While there have been plans to lay 700km long submarine cables all the way to Peninsular Malaysia, observers have noted there is no plans to link the grid in Sabah via a high capacity transmission cables.

Instead a 512km long gas pipeline costing RM4.6 billion is being built to connect Sabah and Sarawak. Following the cancellation of the coal fired power plant in 2011, the government had begun to look at other source of power options.

Why coal?

A geothermal power plant costing RM419 million has been approved in Apas Kiri, Tawau. When completed in 2014 it will generate about 36mw electricity.

A gas power plant commissioned in Kimanis worth RM1.5 billion will have the capacity to generate 300mw in 2015 while the recently completed 64MW Kubota gas power plant in Tawau, is expected to increase the energy supply to 96MW by 2014 to meet the demand of 80MW in the east coast.

Another power plant pending completion is the 300MW LGN station in Lahad Datu. This is expected to be ready by 2015.

Environmentalists continue to ask why Sabah, with its vast renewable and green energy options, continues to look at coal as as a solution. The state is after all the main producer of palm oil in the country and has a massive amount of biomass such as empty fruit bunches, palm fronds, trunks, palm kernel shells and mesocarp fiber that could be used to generate power.

The state also houses the country’s first 14MW biomass power plant in Kunak, Sabah. The plant is to be connected to the grid and has a renewable energy purchase agreement (REPA) with Sabah Energy Supply Board supply up to 10MW of green electricity for 21 years.