This write-up is TNB’s response to the recent decision by the Sabah State Government to cancel the Lahad Datu coal fired 300 MW power plant. Tenaga Nasional Berhad (TNB) views with deep regret and concern the decision by the Sabah State Government to scrap the 300 MW Lahad Datu coal-fired power plant project. Sabah faces an acute power shortage problem and the urgency to provide for the additional 300 MW from the Lahad Datu project is VERY REAL. The proposed power plant is necessary to reinforce and stabilize the Sabah Grid on the East Coast. Now, with the cancellation of the project, the people of Sabah will have to face the inevitability of a power crisis situation.

It is necessary to emphasize that when TNB received the green light to plan for the Lahad Datu power plant project, we have given due considerations to the socio-economic requirements, supply security, power quality as well as environmental effects of the project.

While TNB fully understands the decision by the Sabah State Government is made due to the pressure from various NGOs, environmentalists and other interested parties, we would like to clarify to the people of Sabah that much of the claims made by opponents of the project do not comprehend the gravity of the power supply situation in the State. Nor have the project’s “nay-sayers communicated to the people the true picture of the project site and its allegedly destructive environmental impact on the “green field” and “pristine” area surrounding the Darvel Bay.

Critical Power Supply Situation Ahead

We foresee 2010 to be a critical year for Sabah with the cancellation of the Lahad Datu coal-fired plant project.

Currently the East Coast of Sabah is served by aging and polluting diesel power plants, which are hopelessly unreliable. As a result, frequent power disruptions have affected the business community and domestic customers. High operations costs of diesel generators as a result of spiraling oil prices have also forced Sabah Electricity Sdn Bhd, (SESB) to retire its old and uneconomical diesel generators. It is our intention to retire these plants once the Silam Power Plant is up and running. Now, with the cancellation of the plant, the population, especially in the East Coast, will have to brace itself for more frequent interruptions of power supply. Opponents of the project also questioned the necessity of building the power plant now that Sabah East-West Grid is completed. While we acknowledge the role of the Sabah Grid in stabilizing electricity supply to East Sabah, the Grid is intended to support up to a certain percentage of the supply. From the security aspect, any requirement of more than 20% would put risk on the security supply to the East Coast if the West Coast Grid is down.

Also, while TNB acknowledges the possibility of transporting the power from the yet-to-be completed Bakun dam, we also wish to highlight that the cost of transporting this power will be very high and risky. It has to pass through at least 600 KM of native land and forest reserves, including habitat for endangered plants and species such as the rafflesia.

Also, to provide land reserve for the building of transmission grids we must be prepared to sacrifice substantial land and corridors amounting an area larger than Singapore. All these are factors to consider, and we haven’t even looked at operation and maintenance costs to expand the grid.

A New Site?

Silam was strategically chosen as the project site because of its proximity to the East-West Sabah Grid and to the sea, which will facilitate easy importation of coal cargoes coming via the sea route. These considerations are crucial in locating a new site.

Also, as past experience shows, in scouting for a possible site, the syndrome of “not-in-my-back-yard” will always be there as we face criticisms from people from the areas affected. Inevitably, acquiring a new site may also incur more cutting of trees!

Viability of Alternative Fuel Sources

As part of the energy supply criteria, TNB had considered using fossil fuels as well as renewable energy. However, the current technology for renewable energy can only supply capacities of around 1MW per plant, whereas immediate supply-demand requirements of Sabah is about 200 MW as at end of 2010. Hence it would be very prudent and appropriate to go for the fossil fuel technology, i.e. steam generating sets at 4 x 80MW to meet the short-to-medium term requirements.

Choosing renewable energy would mean taking up a huge expanse of land for planting up solar panels and wind turbines. Even these technologies cannot guarantee continuous supply of energy output as this would be dependent upon sunshine and consistent wind currents. To build a 300MW solar plant, we require 16 KM square area. Meanwhile for enough wind turbines we require land area of about 92 KM.

The request for proposal issued for the implementation of the project had identified Silam as the project site. Silam is on the sea, facilitating an easy importation of coal cargoes coming via the sea route apart from providing adequate cooling water. It is convenient because of its proximity to the existing East-West Grid Interconnection.

Google Map photo shows satellite view of Silam and Darvel Bay. The area surrounded in blue indicates the site of the power plant.

We also wish to clarify that the site of the power plant is not a green field area. In fact the site was formerly an integrated timber complex with a power generating facility to feed the timber complex. TNB is unable to ascertain whether there was any environmental protection or any mitigation plant installed to preserve the pristine condition of Darvel Bay.

Photos show view from current site of the integrated timber complex.

TNB is also fully aware of the controversial view towards coal as a resource. As a national utility company, what we can do to respond towards this is to employ the technologies available that can support the plans for plant development. This is why we made the effort to require clean coal technology in the generation methods for this plant.

Artist’s impression of the completed power plant. The plant will be employing clean coal technologies as a measure to ensure minimal effects on the environment.

Clean coal technology is the name used to describe technologies for improvement of efficiency and environmental acceptability of coal extraction, preparation and use. In Malaysia, the technology has been used in our own Stesen Janakuasa Sultan Azlan Shah (SJSAS) at Manjung, Perak.

As in SJSAS and in the proposed plant, TNB has made voluntary efforts to go above the local Department of Environment standards. We also chose to benchmark ourselves against World Bank and WHO environmental standards instead when it came to emissions levels of the power plant. This means that we will be taking every measure to ensure that effect on the environment is minimal.

The EIA Report has been submitted to the Department of Environment. The executive summary of the report can be viewed Here