Sabah must take charge of its power generation assets: Yusof
Published on: Tuesday, April 23, 2024
By: Mohd Izham Bin Hashim
Deputy Chief Minister Datuk Joachim Gunsalam (right) and Datuk Shahelmey Yahya.
Kota Kinabalu: Sabah must take charge of its power generation assets to provide a stable and reliable power supply and ensure future energy security.
“Sabah does not own enough power generation assets in the State which are mostly generated by independent power producers (IPPs),” said Sindumin Assemblyman, Datuk Yusof Yacob.
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He stressed the importance of the State in managing its own energy assets rather than relying solely on IPPS to manage them.
“The proper management of power supply is vital for Sabah’s development and economic growth, as the state cannot afford to leave these issues unresolved, or else we will lose out in the future,” said Yusof.
He underlined that the State cannot afford to lose control over power generation which is crucial for energy security, power development and attracting investors to the state.
According to SESB Chairman, Datuk Seri Madius Tangau, SESB is currently only able to generate and own 20 per cent of the power baseload requirement, while the rest is generated by IPPs before being sold to SESB.
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Yusof pointed Sabah’s power supply is heavily reliant on IPPS, which increases the risk of outages and supply disruption whenever IPP-owned power plants are undergoing maintenance or faulty infrastructure.
“A closer look reveals that the majority shareholders of these IPPS are outsiders while Sabah only holds a minority stake of 25 per cent,” he said.
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Yusof noted of the 15 IPPS in Sabah, four are registered locally, while most are owned by outsiders.
He lamented persistent power supply problems in the State can be attributed to Sabah’s low reserve margin of a mere 7.9 per cent, which is below the recommended industry standard of 25-30 per cent, which is considered prudent for ensuring reliable power supply.
He echoed the SESB Chairman’s views on the need for SESB to develop its capacity to generate baseload power before venturing into renewable energy.
According to Yusof, the State Government has taken serious steps towards ensuring energy security which was outlined in the Sabah Energy Roadmap and Master Plan(SERAMP)2040 presented in September 2023.
“The launch of the roadmap is followed by the creation of the Sabah Energy Commission (ECOS) takes over the regulatory authority of the State’s electricity supply, to provide a holistic solution to tackle power supply issues in the State.
“It is high time for the state government to address the power supply issues and develop a plan for a smooth takeover of SESB,” said Yusof.
He reiterated it as also important to note SESB still receives subsidies from the federal government between RM700-800 million and also from the Ministry of Finance for diesel at RM300 million.
Yusof noted among the ongoing initiatives were Large Scale Solar Power Generation, improving efficiency of existing power generation infrastructure, additional energy generation such as hydropower and biomass, rental of generator and battery storage, launch of Grid-Connected Solar Photovoltaic sustem for self-consumption programme in Sabah( SELCO - PV Sabah), and Ocean Thermal Energy Conversion.
Additionally, he said a strategic takeover plan is needed for IPPS in the State.
“There is no need to renew licenses of IPPS whose concessions will end, and should be eventually replaced by Sabah-owned IPPS,” he said.
He adds that state-owned IPPs can be managed under EKOS together with local players such as Sabah Energy Corp, Khazanah and SESB.
Yusof has stated that foreign investors may be permitted to produce their own power supply during the interm programme, but there must be a well-planned strategy in place to regulate the power generation capacity in the state.
“If this trend continues, then all power generation will eventually be controlled by foreign entities. There has to be a strategic plan for the state to maintain control over power generation capacity, it probably will involve alot of funds but it can be addressed with loans or Sukuk programmes,” he said.
Moving forward, Yusof also reiterated his call for the revival of the ‘Southern Link’ project which was supposed to be handled by the Federal Ministry of Rural Development but was delayed.
“It is hoped we can also urgently complete Sabah’s power grid by pushing for the Southern Link project,” he said.
The Southern Link project will involve the construction of a 330km transmission line from Sipitang to Tenom and then to Kalabakan and Tawau.
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