Tag Archives: TNB

1MDB AND IPP

IG041

1MDB AND IPP

In order to justify 1MDB’s huge debt,the IPPs have become the convenient whipping boy for the 1MDB supporters to stir up public sentiment for the past few weeks.

IPPs have been portrayed as the leeches to the government’s coffer. And to deal with it, we need 1MDB and multi-billion debt.

Is that true?

Basically, it is due to the lack of transparency in the first generation of IPPs back in the 1990s when the ‘take or pay’ deal enjoyed by the IPPs seems unfair to the Government.

We must understand that when Malaysia experienced a national power crisis, it requires a quick and expensive solution which can only be made possible by private sector venture.

Because it involved multi-billion capital and the risks it undertook were thought to be incredibly high, the deal ‘take or pay’ was included.

It is strange to see at some of the  these IPPs which are now seen as “locusts”, were the “white knights” which had come to aid the Government to plant-up quickly, using private sector funding.

If not for the IPPs, the peninsula might have experienced more severe and persistent power outages in the 1990s and the 2000s as TNB did not deliver value and quality electricity to consumers.

Actually the ‘take or pay’ deal was only given to YTL Power. And YTL’s license will expire in this year hence there will be no more ‘take or pay’ deal to any IPP’s in Malaysia.

Why were the IPPs given subsidies when the people were not?

Actually the cheaper gas from Petronas for the IPPs and TNB is meant to benefit the people in the form of low tariff rates.

It is not like the IPPs or TNB can sell and trade the subsidised gas for their own profit.

In fact if there is no subsidy given to them, the people will have to pay the market price for electricity.

It means that all the ‘billions lost causef by IPPs’ that the 1MDB supporters keep harping about is actually went to the public.

Some may say all the IPP licenses were given to the cronies of one former Prime Minister. Hence, the IPPs are bad.

But cronies or not, the frequency and minutes of interruptions would have driven away many investors if the IPP solution was not initiated in 1990.

The involvement of IPPs in the power generation business had introduced efficiency besides contributing significantly towards stabilising the nation’s reserve margin.

Not only that, thousands of job have been created and today we proudly see some of the IPPs have ventured into the international market to do business in energy sector.

But the most important thing is, IPPs have brought competition to TNB in an industry that TNB had long monopolised.

Today, while TNB is the sole electricity distributor in this country, it is not the only electricity producer.

Given of all these contributions (and that is real), 1MDB supporters have to stop maligning the IPP as if they are the raison d’etre of 1MDB’s debt.

Please consider this:

The average returns for the first-generation IPPs were 17.8 per cent, while the second- and third-generation boasted average returns of 14.4 per cent and 11.7 per cent, respectively.

The fourth-generation IPPs is expected to reduce the average returns to 9.1 per cent.

Question number one:The first, second and third generation of IPPs enjoyed a much smaller return even before the inception of 1MDB.

If that’s possible to reduce IPPs’ earning without having to incur billions of debt through a strategic development company, why do you need 1MDB?

Question number two: Just for the record, Petronas already has to forgo revenues amounting up to RM12 Billion annually because of the discounted gas price given to TNB and IPPs.

The imported gas has to be subsidised at about RM40 per mmbtu instead of the market rate of RM145 per mmbtu.

It means Petronas can only sell the gas at one-third of the cost.

Can we say now, Petronas is the real saviour in reducing our electricity tariff, not 1MDB?

MatRodi

Tagged , , , , , ,

CERITA TNB DAN IPP LAGI

Maaf jika bercerita pasal TNB dan IPP lagi. Ini adalah koleksi tulisan saya di fb. Sengaja disiarkan di sini supaya blog tidak bersawang sangat. :-p

Harap bermanfaat dan jemput baca!

IPP DAN TNB

1. Kesimpulan daripada kritikan terhadap artikel Soal Jawab TNB sebelum ini adalah:

a- Kerajaan memberi subsidi kepada Penjana Bebas Eletrik (IPP) sebanyak RM8 billion setahun. Jumlah ini yang sewajarnya dikurangkan- bukan subsidi yang diterima rakyat.

b- TNB terpaksa membeli setiap elektrik yang dijana IPP pada kadar yang tinggi walaupun tidak menggunakannya.

c- Oleh yang demikian margin simpanan (reserve) elektrik di Malaysia adalah 31%- sangat tinggi dari kebiasaan.

d- Sudah jelas kerajaan sepatutnya ‘menekan’ IPP berbanding menekan rakyat dengan kenaikan tarif elektrik.

2. Ini adalah sentimen kebanyakan mereka yang marah mengenai kenaikan tarif elektrik. Bagaimanapun, terdapat beberapa perkara yang perlu diperbetulkan dan dijelaskan antaranya:

3. Kerajaan tidak memberikan subsidi kepada IPP. Sebaliknya kerajaan hanya membuat bayaran kapasiti (capacity payment) iaitu bayaran yang telah ditetapkan bagi pembinaan loji penjana elektrik. Ini tidak ubah seperti bayaran pinjaman kereta bulan-bulan ataupun bayaran progresif kepada kontraktor bagi setiap projek.

4. Bagaimana pula dengan harga gas murah yang dinikmati IPP? Gas ini dibekalkan oleh Petronas kepada TNB yang kemudiannya menyalurkan kepada IPP bagi penjanaan eletrik. Tarif gas ini ditetapkan oleh kerajaan sebagaimana kadar harga petrol. Disebabkan terpaksa menjual gas di bawah harga pasaran, Petronas terpaksa menanggung kehilangan pendapatan sekitar RM 8-12 billion setahun.

5. Mengapa Petronas menjual gas kepada TNB dengan sebegitu murah? Jawapannya adalah untuk memastikan tariff elektrik di Malaysia kekal rendah. Oleh yang demikian, subsidi yang kononnya diberi kepada IPP bukanlah untuk keuntungan IPP semata-mata. Analoginya samalah seperti subsidi gula- ia untuk memastikan harga segelas teh tarik kekal sama, bukannya menjadikan towkey gula kaya raya.

6. Sebagaimana yang diterangkan, industri tenaga memerlukan modal yang amat tinggi. Malahan pada tahun 90-an, industri ini masih baru di mana sebarang pelaburan adalah berisiko tinggi. Jadi bagaimana kerajaan boleh meyakinkan pihak swasta untuk melabur berbilion ringgit membina loji jana elektrik supaya negara mempunyai bekalan tenaga yang cukup? Hakikatnya ketika itu Malaysia memerlukan bekalan tenaga yang banyak dan cepat kerana ekonomi sedang bertumbuh pesat.

7. Oleh itu, klausa ‘pay or take’ diletakkan di dalam perjanjian sebagai jaminan supaya IPP berjaya perolehi pinjaman daripada bank. Praktis ini tidak jauh beza dengan sesetengah kontraktor yang menjadikan kontrak projek mereka sebagai jaminan untuk mendapatkan pinjaman bank.

8. Walaubagaimanapun, klausa yang berat sebelah ini hanyalah tertakluk kepada IPP generasi pertama iaitu seperti YTL Power. Dan perjanjian YTL bakal tamat pada tahun 2015.

9. Bagi generasi kedua IPP, TNB membayar berdasarkan terma ‘rental plus energy’ yang merangkumi kos overhead dan minima tenaga yang diperlukan untuk IPP balik modal. Bagi IPP generasi ketiga pula TNB hanya membayar apa yang digunakan.

10. Secara ringkasnya, TNB sudah tidak ‘mengsubsidi’ IPP dalam bentuk jaminan klausa ‘pay or take’. Yang ada hanyalah subsidi gas daripada Petronas.

11. Sebab itu keuntungan IPP semakin berkurangan mengikut generasi. IPP generasi pertama untung sekitar 17.8% setahun. IPP geenrasi kedua (14.4%), ketiga (11.7%) dan IPP generasi keempat hanyalah sekadar untung 9.1% setahun.

12. Berkenaan dengan rizab tenaga yang tinggi, sebenarnya tidak ada satu penanda aras yang tepat untuk menentukan berapakah kadar rizab yang sesuai kerana ia berkait rapat dengan pertumbuhan ekonomi. Pun begitu, Malaysia memerlukan rizab yang tinggi kerana grid elektrik di negara kita tidak saling berhubung dengan negara jiran. Ini bermaksud sekiranya berlaku kecemasan, Malaysia tidak boleh membeli eletrik daripada Singapura mahupun Thailand.

13. Ini menjelaskan mengapa Singapura mempunyai rizab elektrik setinggi 47% pada tahun 2013. Negara Thailand pula yang rizabnya sekitar 11% terpaksa membeli elektrik daripada Kemboja dan Myanmar pada tahun ini. Cadangan seorang bekas timbalan perdana menteri yang mahukan rizab elektrik Malaysia dikurangkan sebanyak 20% bukan sahaja tidak praktikal, malah tidak bertanggungjawab terhadap kelangsungan bekalan tenaga negara.

14. Hakikatnya terdapat begitu banyak lagi pembaharuan di dalam sektor tenaga di Malaysia antaranya:

a- Kontrak IPP generasi pertama telah dirunding kembali pada Mac 2013. Rundingan ini dijangka membawa penjimatan sebanyak RM1.76 biliion bagi 4 tahun akan datang.

b- IPP-IPP terpaksa bersaing sesama sendiri untuk membina loji elektrik.di Malaysia sejak pengenalan ‘competitive bidding’ pada 2011. Setakat ini sudah 4 ‘competitive bidding’ dijalankan di mana lebih RM4 billion ‘generation cost’ dapat dijimatkan melalui praktis tersebut.

c- Sejak pengenalan Windfall Tax Levy Act 1998, IPP telah membayar cukai ‘durian runtuh’ sebanyak RM500 juta pada tahun 2008 hingga 2010.

d- Tambahan dari itu, IPP menyumbang 1% daripada jualan elektriknya kepada Malaysia Electricity Supply Industry Trust Account (MESITA). Dana ini yang sudah mencecah RM1.12 billion digunakan untuk menyalurkan elektrik di kawasan pedalaman.

15. Apapun, di sebalik kesemua sumbangan IPP, jasa terbesar IPP adalah berjaya menamatkan monopoli TNB di dalam sektor tenaga. Hasilnya hari ini purata masa gangguan elektrik yang dialami pengguna (System Average Interruption Duration Index (SAIDI) telah berkurangan sehingga 64 minit. Ini adalah lebih baik daripada kebanyakan negara maju contohnya United Kingdom (68 minit).

16. Jika ini semua masih tidak meyakinkan pengkritik IPP, sila lihat keadaan di Sabah yang masih lagi mengalami ‘blackout’.

MatRodi

Tagged , , , , , ,

IPP, PETRONAS AND MONOPOLY

IPP

Admittedly we can’t talk about electricity without discussing about IPP.

Why IPPs have become the convenient whipping boy for the Opposition to stir public sentiment for few decades?

Basically it is due to the lack of transparency in the first generation IPPs back in the 1990 where the ‘take or pay’ deal enjoyed by the IPPs seems unfair to the government. We must understand that when Malaysia experienced a national power crisis, it requires a quick and expensive solution which can only made possible by private sector venture. Because it involves multi-billons capital and the risks it undertook were thought to be phenomenally high, the deal ‘take or pay’ was included.

It is strange to see at some of the  these IPPs which are now seen as “locusts” were the “white knights” which had come to aid the Government to plant-up quickly, using private sector funding. If not for the IPPs, the peninsula might have experienced more severe and persistent power outages in the 1990s and 2000s as TNB did not deliver value and quality electricity to consumers.

Actually the ‘take or pay’ deal was only given to YTL Power. And YTL’s license will expire in 2015. It means, in two years’ time, there will be no more ‘take or pay’ deal to any IPP’s in Malaysia.

Why IPPs are given subsidies when the people are not? Actually the cheaper gas by Petronas to IPPs and TNB are meant to benefit the people in the form of low tariff rates.  It is not like IPPs or TNB can sell and trade the subsidized gas for their own profit.

In fact if there is no subsidy given to them, the people will have to pay the market price for electricity. This is what happening right now. The government has decided to gradually remove the subsidy (cheaper gas) thus resulting the increase of electricity tariff.

Some may say all the IPP licenses were given to cronies of the government. But cronies or not, the frequency and minutes of interruptions would have driven away many investors if the IPP solution was not initiated in 1990. The involvement of IPPs in the power generation business had introduced efficiencies besides contributing significantly towards stabilising the nation’s reserve margin.

Not only that, thousands of job have been created and today we proudly see some of the IPPs have ventured international market to do business in energy sector.

PETRONAS

How about Petronas? Shouldn’t Petronas’ profit be used to subsidise the energy sector?

Petronas is already has to forgo revenues amounting up to RM12 Billion annually because of the discounted gas price given to TNB and IPPs. It would be better if this revenue channeled to further develop high-value downstream activities.

Not only the revenue is falling, the gas supply from local offshore gas fields is depleting, hence, the need to import gas from Australia and Qatar. The imported gas has to be subsidised at about RM40 per mmbtu instead of the market rate of RM145 per mmbtu. It means Petronas can only sell the gas at one-third of the cost. It’s a loss-making business.

How long Petronas can sustain this? It is worth mentioning that Petronas is not the biggest and the largest oil company in the world.

MONOPOLY

Some readers questioned why TNB is the sole electric provider in this country. They argue in most developed countries there are few providers that compete with each other in giving the best rate to the consumer.

To be fair to their suggestion, it is not accurate to say TNB has monopolised the electric sector in Malaysia given the current practice. While TNB is the sole electricity distributor in this country, it is not the only electric producer.

Under the Malaysia Electric Supply Industry (MESI) transformation, TNB will have to compete with IPPs in terms of building a new plant and generating electricity. The competitive bidding (apart from ensuring transparency), allows the government to choose the most competitive rates and eventually pass on the savings to consumers.

For the record, the government has recently conducted its first competitive bidding process for the new power plant in Prai, which was won by TNB and the extension of PPAs for some of the first-generation IPPs.

Obviously IPPs brought competition to TNB in an industry that TNB had long monopolized.

ONE OFF VS GRADUAL INCREASE

Many wonder why the government hasn’t impose the price hike gradually? Why it should be one-off increase.

Politically, I don’t think any government in the world would want to portray themselves as an unpopular government by keep announcing price hike, even for a small increase. After all, one-off increase suits well with the Malaysians attitude that forgets easily.

Economically, one-off increase will give a faster result and substantial savings whereas the savings from the gradual increase might be insignificant.

MatRodi

Tagged , , , ,