SESB very grateful for the statement issued by YAB Chief Minister and his stand on the issue. YAB Datuk Musas remarks reflects his deep understanding on the roots of our problems and the required, necessary solutions.

SESB deeply regret and is very concern over the current shortage of power supply all over Sabah especially acute in the East Coast.

A special briefing session for Government MPS and Legislative Assemblymen was organized yesterday , 18th August 09, at Le Meridien Hotel. The briefing session was chaired by Ybhg. Tan Sri Leo Moggie, SESBs Board Chairman and also in attendance was the CEO of TNB Datuk Seri Che Khalib bin Mohd Noh. The briefing was presented by Tuan Ir. Baharin Din, The Managing Director of SESB. Amongst those who attended the briefing session were the Deputy Chief Minister, YB. Datuk Peter Pang En. Yin, and YB. Tan Sri Datuk Seri Panglima Joseph Kurup, President Sabah BNBBC, Datuk Mockhtar Radin, Sabah Members of Parliament and Legislative Assemblymen.

1. Demand growth versus-power generation capacity-The widening gaps

The acute shortage of power supply experienced in Sabah in the past months and now is due to rapid growth of consumers demand which cannot be contained within the existing generation capacity.

The growth in consumers demand as a result of population increase and developmental trends have been anticipated by SESB, hence the incorporation of major projects in SESB Generation Development Plan. However, as consumers demand grows rapidly, some of these major projects have yet to take off.

The delay in implementation of planned projects has forced SESB to overstretched the capacity of its aging machines.

In the past months most of our machines broke down, one after another. Just the past week, 15 sets were down due to capacity overstretched of machineries.

The past load-shedding was absolutely necessary to facilitate critical maintenance to sustain capacity and/or conduct rehabilitation tasks due to machines breakdown.

The power supply generation-mix in term of installed capacity in Sabah is a shared responsibility between IPP (generating 581 MW or 55%) and SESB (producing 467 MW or 45%). The recent situation became more critical when the ARL Power Station which belongs to the Independent Power Company also experienced serious plant malfunction. This further reduced power generation capacity as a whole.

On the issue of why load-shedding not done in rotation manner, when availability is less than the demand, rotation is no longer applicable. Power generation from the West Coast was very limited to be transferred to the East Coast. SESB have been managing power generation within an average reserve margin between 5%-10% way below the International norm which is at 25%.

But in the past week reserve margin has even gone down to -10. At this negative reserve margin, the system become very unstable, system under-frequency will happen which will jeopordize the whole system stability, thats why load-shedding is immediately conducted in order to stabilize the system or else the whole system will collapse.

The generation capacity in the West Coast could have been better and reserve margin higher if the Ranhill Power plant have been successfully installed in June 2008. Unfortunately there has been delayed in that plan and the earliest that the plant can be installed is January 2010. We appreciate all efforts done by the Ranhill Co. to expedite this matter.

2. Interim Action Plan

Most machineries are undergoing repair and rehabilitation processes, capacity overstretched has resulted in extensive damage to most machines, not merely wear and tear problem, which means longer rehabilitation process (more than a few weeks as some parts have to be replaced and sourced from outside the country).

However, this situation is expected to ease next week when power availability will increase from 620MW to 696MW (though still not up to comfortable margin 730MW), this is due to Tenom Pangi /Melawa plants repair work will be completed and produce 22MW and 18MW respectively (Total projected increase availability 40 MW but this projected availability only valid if we do not encounter major machines breakdown).

To date, SESB has to spend almost RM60 million on repair and upgrading projects to all the aging existing plants, as stop gaps measures to meet the ever increasing demand of our customers.

Furthermore, SESB has taken or in the process of taking the following actions:

i) purchased of 20 units of 1MW ( 1MWx20 =20MW) gen-set in April 2009;

ii) another 20 MW capacity is to be sourced (purchased or rented) soon to be distributed to the East Coast. Total costs for these new gen-sets is RM 48million;

iii) Installation of 2x1mw mobile gen-set in Beluran dan 1 x 1MW in Kota Kinabatangan with the total cost of RM3million

iv) The completion of IPP Powertron II (190MW) in the following phases:

a. By January 2010 -65MW; b. By April 2010- 65MW c. By Sept 2010- 60MW

The implementation of projects as stated above is expected to ease the demand-supply imbalances, however, SESB would like to stress here, these projects are emplaced to upgrade capacity but does not guarantee 100% supply reliability. Reliability is dependent not merely on conditions and capacity of the machines but transmission efficiency, the longer the distance the higher the probability of transmission lines being exposed to disturbances along the way. But if there is a major power plants located at the east coast definitely it will reduced probability of such occurrences.

3. Mid-Long Term Plan

SESBs envisage in the long term, the problems on insufficient power supply can be corrected when all of the following projects are completed:

i) Completion of SPR energy plant which carries another significant capacity i.e (100MW) in 2012-2013;

ii) Completion of Kimanis Power ( 300mMW) -2013

iii) Installation of coal plant (300MW) year 2014-2015.

4. Conclusion

We are grateful to the State and Federal Government for their support and financial assistances. We are doing all that we can within the constraint we face. But we also know all these piecemeal efforts will not gives us a lasting desired result, for we cannot guarantee reliability of supply unless and until we can implement the major projects which have been stated above.

I take this opportunity to appeal to all our customers to support our long term programs so that we can, not just repetitively apologize and emphatize with you but can really do something concrete to solve our problems in a sustainable manner.

I would also like to appeal to all consumers to exercise good sense in the utilization of power in their home or office vicinity, during this critical times we need to share the responsibility of energy saving so that the more save the more can be distributed. The people who will suffer or be impacted by the load-shedding are our own community members. By asking you to use less we will get even lesser revenue, but at this point of time social consideration override our concerns for financial returns. Every unit saved in the homes and offices of our customers will make a lot of difference to the overall supply availability. Please help us make that difference.