29 October 2001 (Business Times) - TENAGA Nasional Bhd wants to reduce itsdependence on gas fuel and increase consumption of coal, says chairmanDatuk Dr Jamaludin Jarjis.“The Government is giving Tenaga a 50 per cent subsidy on gas but coal isnow about the same price as gas. Naturally Tenaga should consider usingmore coal in case the subsidies are reduced or removed later,” he toldBusiness Times.Energy, Communications and Multimedia Minister Datuk Leo Moggie has saidgas should be priced around RM7.68 per million metric British thermal unit(mmbtu).The open market price for gas fuel is currently between RM13 and RM14 permmbtu, which means Petroliam Nasional Bhd (Petronas) is giving a discountof about 50 per cent to power generators.Local research house MIDF Sisma said gas-powered plants account for 81.1per cent of Tenaga’s total generation capacity, with coal a mere 8.6 percent, hydro 8.3 per cent, and oil 2 per cent.“This is why Tenaga is pushing for a more diversified fuel mix. It isdangerous to rely so heavily on a single fuel, a supply disruption inwhich would affect overall power production,” it said.Sectoral analysts said Tenaga could more than double its coal consumptionby 2010 with MIDF Sisma projecting that the fuel’s share would rise to 20per cent and gas’ fall to 59 per cent.The industry as a whole is also expected to see a boost in coal usage withthe commencement in 2006-07 of two coal- powered independent powerproducers (IPPs), namely SKS Ventures and Jimmah Power. Their combinedoutput is estimated at 3,500 megawatts (MW).The country’s total capacity currently stands at about 12,000MW.In addition, analysts are saying hydro-power will play a decidedly moreprominent role upon completion of the Bakun project. MIDF Sisma isforecasting a 20 per cent contribution from hydro by the end of thedecade.Jamaludin said Tenaga has not been informed of any decision by theGovernment regarding an increase in gas prices.Under an agreement with Petronas which expired end-2000, gas is sold toTenaga at a fixed price of RM6.40 per mmbtu.Tenaga has continued to pay at this price.Analysts said the Government may not make a decision for a while yet givenunder the current economic circumstances.“Electricity affects everyone, any increase in gas prices will affectelectricity tariffs and add to the inflationary pressure.”“The Government will probably wait for signs of an economic recovery,maybe towards the end of the year,” said an analyst with a local researchhouse.Meanwhile, Jamaludin said Tenaga will continue to work closely with theMalaysian Palm Oil Board (MPOB) on the project to use palm oil as biofuelto generate electricity.Palm oil is already being burned at a boiler plant in Prai and adiesel-fuel station in Sabah.MPOB director general Datuk Dr Yusof Basiron confirmed when contacted byBusiness Times that the biofuel project is ongoing.“We have a trigger price (calculated according to a formula) (todetermine) when to burn palm oil to help prop up the commodity’s price.The lower the price the more we burn,” he said.