Govt agrees to palm oil biomass for power project28 February 2001 - THE Government has, in principle, agreed to the palmoil biomass project for the generation of power although electricityproduced this way may be priced slightly higher than that of gas, Energy,Communications and Multimedia Minister Datuk Amar Leo Moggie said.

This is because the Government hopes to bring the cost down when theproject can be efficiently connected to the national grid.

Electricity produced from biomass and energy manufactured from oil palmwastes, will be in the range of between 13 sen and 17 sen per kW/hour.

Speaking to reporters in Kuala Lumpur yesterday, he said the Governmenthas estimated that 5 per cent of the total national electricityconsumption will be met through renewable energy resources such as biomassand solar by the end of the Eighth Malaysia Plan (2001-2005).

Leo Moggie said the target can be achieved if the biomass project provedto be successful.

Malaysia Energy Centre chief executive officer Dr Mohd Zamzam Jaafarargued that the maximum price of 17 sen per unit per cost of the biomassenergy is justified, considering the review that the Government is doingon the gas pricing.

"The price of gas is being reviewed by the Government and may go up.

Therefore, the price of gas sold by independent power producers to TenagaNasional Bhd may also go up," he said.

The Government is in the final stages of studying a Five-Fuel Policy whichwill incorporate more environment-friendly energy sources.

The existing Four-Fuel Policy covers natural gas, coal, oil and hydropower.

The new policy, currently studied by the Economic Planning Unit, includesrenewable energy sources such as solar, wind and biomass.

"The fifth resource is a combination of renewable resources and efficiencyin utilising the current resources.

Biomass has been identified as one of the main renewable resource that canbe developed further.

Although there are others such as solar, biomass has a bigger potential,"Leo Moggie explained.

He said the Government, through Petroliam Nasional Bhd (Petronas), willcontinue to subsidise gas pricing for the power industry until it has aclear understanding on the impact that it will bring to the electricitysector.

He said the Cabinet has yet to discuss the issue fully and a study iscurrently conducted to analyse the impact of the change in gas pricing,particularly to the electricity tariff.

"The question is how long this level of subsidy can be sustained.

At the moment we have not had that paper presented," he said.

Petronas is currently charging Tenaga Nasional Bhd RM6.40 per million BTU(British Thermal Units) for gas supplies as compared to the market rate ofRM18 per million BTU.

Earlier, the minister witnessed the signing of the memorandum ofunderstandings (MOUs) for energy audits and energy service companies(Esco) business development workshop, organised by Malaysia Energy Centre.

The MOUs signified the support of the Malaysian Industrial EnergyEfficiency Improvement Project, an RM80 million four-year project designedto improve industrial energy efficiency.

The associations which took part in the signing were Malaysian Iron andSteel Association, Cement and Concrete Association, Malaysian Timber BoardIndustry and Malaysian Rubber Products Manufacturers' Association.

BUSINESS TIMES

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