Power Poser
By SC Chan
THE TIMING COULD NOT HAVE been more ironic. Just days after Sarawak announced it was building 12 hydropower dams across the state, a massive power failure plunged most of the state into darkness.
Kuching, the capital, and all major towns and their suburbs, fell into total darkness and severely affected businesses and industries for several hours on a busy Saturday night on Aug 9, 2008. It raised questions, among other things, about the management of power supply in Sarawak.
The power interruption affecting some 2.2 million people throughout Sarawak was on an unprecedented scale, triggered by what the state Public Utilities Minister Datuk Seri Awang Tengah Ali Hasan described as a series of trippings of power generation stations connected to the statewide grid from one end of the state to the other.
The power outage, which the Chief Minister Tan Sri Abdul Taib Mahmud described `as not as serious as the one that hit New York in 1965′, also happened just after the State Cabinet had approved the construction of a third hydropower dam project of a 944-MW- generating capacity in Murum, above the 2,400MW Bakun Hydro Dam now in the advanced stages of construction in central Sarawak.
`It is not due to a shortage of power supply but a technical problem,’ was how Taib described the reason behind the power outage. And his deputy Tan Sri Dr George Chan, who holds the industrial development portfolio, has ruled out the state paying out any compensation for losses to manufacturing industries.
The various chambers of commerce and industries have also not made any public statements on the matter, but this does not preclude the possibility of individuals taking action to pursue legitimate claims for business losses.
Electricity tariffs in Sarawak are the highest in the country, a factor that has always been cited as one of the reasons for the higher investor cost in Sarawak, apart from the higher cost of imported materials due to higher shipping charges, among others.
After the recent fuel price hike, the Sarawak government assured there would be no review of the current tariffs by the power utility company Sesco Bhd, a wholly-owned subsidiary of 65%-state-owned listed power group Sarawak Energy Bhd (SEB), after the last tariff increase in April last year.
Sarawak currently produces about 800MW of electricity, more than enough for its needs. However, with the completion of the Bakun HEP in two or three years’ time and the Murum HEP by 2012, total power supply available will be around 4,000MW, most of which is planned for use by energy- intensive industries such as aluminium smelter plants, taking into account the annual increase in the state’s normal consumer demand, and possibly exporting some of the power through the proposed 800km-long undersea power cable into the national grid in Peninsular Malaysia.
Despite growing concerns by civil society groups and strong criticism from environmental groups, both local and foreign, including the Swiss- based Bruno Manser Fund, the Sarawak government is intent on going ahead with building the 12 hydro-power dams across the state, which will generate a total capacity of 7,000 MW to be available by 2020.
The present hydro dams are the 170MW Batang Ai HEP, the first built in Sarawak in the 1970s with Japanese yen credit, the Bakun HEP which is under construction and the Murum HEP which has been awarded to China Three Gorges Project Corporation (CTGPC) for about RM3 billion. Malaysian Business understands that SEB has already issued the Letter of Award to CTGPC and that the contract is to be signed this month.
According to SEB Group Managing Director Tan Sri Abdul Aziz Husain, who is also a former State Secretary and brother-in-law of Taib, SEB is also going ahead with gradually phased diesel-run power stations and building more coal-fire power stations, apart from the 270MW coal-fired power station, the first in Mukah, which is being commissioned and connected to the statewide grid.
Sarawak’s highly-ambitious power-generation (hydro and coal) plan is being justified by the state authorities by what it sees as the need to ensure that over the next 10 to 20 years, an abundance of power will be available at the most competitive rates for future industries that the state government hopes to attract within the SCORE (Sarawak Corridor for Renewable Energy) area between Similajau and Mukah.
The state government is well aware that after the recent power outage, affecting 90% of the state’s 2.4 million population, public concerns and questions have been raised over issues relating to power supply management. Large manufacturing industries could suffer enormous losses in the event of periodic power failures, and one of the issues is that to attract foreign investors, there has to be some form of guarantee that adequate compensation will be paid if the problem of supply is management and technical in nature.
`In its enthusiasm to harness the potential of hydro power, the Sarawak government needs to look into SEB/Sesco’s house-keeping requirements, whether you have the expertise and experience to ensure security of supply for major investors,’ an economist says.
According to a Kuching-based lawyer, there is no point building a big fat project without the necessary expertise in management to overcome such failure. `It is just like buying an expensive car, and not even knowing how to drive it well and maintain it.’
In the recent episode, fortunately, there was no known report of burglaries and thefts and sabotage was ruled out. The government should guarantee that there would be no recurrence of a failure of such magnitude. `It is a lesson to be learnt,’ says Sibu-based consumer Munan Laja. `We have to prepare early and by the time we have all 12 dams running as planned by SEB, we would be ready for any eventuality.’
Writing in his blog two days after it happened, DAP Bandar Kuching Member of Parliament Chong Chieng Jen said he was amused to read the Chief Minister’s statement describing the Aug 9, 2008 blackout `as nothing compared to that in New York in 1965′.
`Are we comparing ourselves with the 1960s USA? The Chief Minister might as well say it is only a few hours of no electricity, not as bad as the time there was no electricity at all,’ he added.
The state public utilities minister’s explanation as widely reported in the local media suggested the power outage was caused by the shutting down of Circuit 1 between Sibu and Bintulu. Awang Tengah went on to say that `due to insufficient generation capacity to meet the load demand in the Kuching-Sibu sub-system, the generators in Batang Ai and Sejingkat Power Corporation (SJC) tripped, causing a blackout in areas in Kuching, Sri Aman and Sibu’.
Chong then asked: `If the shutting down of Circuit 1 will have such a repercussion, why did Sesco technicians not know the effect before the shutting down of Circuit 1? So much for talk about the increased efficiency of Sesco after privatisation.’
The DAP elected representative said that before the privatisation of Sesco, there was only one statewide blackout. It lasted only less than half an hour and even then, according to Chong, it happened during vote- counting in the 1999 general election (at the height of the Reformasi Movement and what he described as a critical moment for the Barisan Nasional).
After privatisation, electricity tariffs in Sarawak `skyrocketed’, making them the highest in the country. And as the Aug 9 blackout showed, despite the increased payments by consumers, `we do not have a better and more efficient system in place’.
A senior academic with a Kuching-based public university says: `I think it’s most unfortunate that in this day and age, with the available technology and skills, Sesco is unable to assure consumers of a reliable and uninterrupted power supply.’
It is also regrettable that Sesco and the state government do not see any need for compensating consumers who incurred losses during the recent power blackout, he adds.
`What Sesco and the state government forget is that when consumers sign on for power supply, they do so on a contractual basis,’ continues the senior academic. `It is time the state government acts in the interest of consumers and the public when it comes to issues linked to Sesco.’
(c) 2008 Malaysian Business. Provided by ProQuest LLC. All rights Reserved.