NEWS & EVENTS ONLINE EXCLUSIVE

Thermal power continue to dominate local power projects

Despite positive growth potential for renewables in the market, Malaysia’s power infrastructure sector will continue to be dominated by thermal sources, according to BMI Research.

Based on its Key Projects Database, 78 per cent of the 12,300MW of capacity in planning or construction stages are conventional thermal power plants, The Malay Mail Online reports.

BMI Research forecasts that Malaysia’s power infrastructure sector will grow at an annual average of 5.4 per cent in real terms between 2018 and 2027.

As an oil and gas producer, Malaysia’s power infrastructure has historically been dominated by thermal sources. The vast majority of ongoing and planned power projects in peninsular Malaysia are coal- or gas-fired facilities, and are being implemented by a mix of state-owned and private companies.

Major conventional thermal power projects include Projects 3A and 3B, consisting of two 1,000MW coal-fired power plants currently under construction by 1Malaysia Development Bhd and Mitsui in 2014. These projects are are expected to come online on schedule in 2017 and 2018, respectively.

Projects 4A and 4B, consisting of two gas-fired power plants, are making progress after an earlier setback in which YTL Power withdrew from the  RM3 billion 4B project.

At the same time, regulator Suruhanjaya Tenaga plans to gradually build renewables capacity and has set a target to implement 500MW of large-scale solar projects annually through 2020. Hydropower projects are also underway in  Sabah and Sarawak.

Investment in renewable projects will be further facilitated by market reforms in the sector, which is currently in its second generation of power purchase agreements (PPAs).

BMI Research expects robust growth in non-hydro renewables capacity over its 10-year forecast period to 2027. It forecasts  total non-hydro renewables capacity to expand by nearly 150 per cent between 2017 and 2027, with growth mostly in the biomass and solar segments.

While at a regional level, the size of the market remains limited compared to regional counterparts—notably India, China and Thailand—it  expects the market to outperform in terms of its attractiveness to investors and balance between rewards on offer and risks to investment. — Construction+ Online

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