KUCHING (Dec 29): TA Securities Sdn Bhd (TA Securities) believes that Ranhill Utilities Bhd (Ranhill) is one of the front runners in its bid for a 100MW Combined Cycle Gas Turbine (CCGT) plant tender at West Coast Sabah.

This new project is expected to achieve its first commercial operation date (COD) in April 2024 and final COD in January 2025. Note that under the 12th Malaysian Plan (12MP), a new power plant will be constructed, and the Sabah East-West Grid transmission will be upgraded.

To recap, Sabah’s East Coast faces a supply deficit due to a lack of generation capacity. This is, in contrast, to the supply surplus on the West Coast.

The latter will enable the dispatch of an additional 400MW of electricity supply from Sabah’s West Coast to the East Coast.

“Moreover, we believe that Ranhill’s established track record in Sabah will boost its chances of securing this project,” TA Securities said.

“To recap, Ranhill is the largest Independent Power Producer (IPP) in Sabah, with a 40 per cent market share based on installed capacity.”

The group currently owns two CCGT power plants at Kota Kinabalu Industrial Park. This is via its subsidiaries, Ranhill Powertron Sdn Bhd 1 and 2 (RP1 and RP2). Each Plant has a capacity of 190MW and 21-year power purchase agreements (PPA) with Sabah Electricity Sdn Bhd (SESB) under Build-Own-Operate concessions.

The latter is owned by Tenaga Nasional Bhd and the Sabah state government. The PPA for RP1’s Plant (60 per cent stake) at Teluk Salut will expire in 2029, whilst RP2’s (80 per cent stake) is due for expiry in 2032.

Ranhill is currently in negotiations for RP1’s extension for up to 10 years.

“Furthermore, recent developments reinforce our view that power generation plans in Sabah will be expedited,” it added. “To recap, recently, in August 2022, Sabah Chief Minister Datuk Seri Hajiji Noor revealed that a bill that will pave the way for the formation of the Sabah Energy Commission would be tabled at the State Legislative Assembly on April 2023.

“With the setting up of the Sabah Energy Commission (SEC), the state will have total control in managing its energy resources, especially electricity. In tandem, the state government would move to reacquire SESB.”

According to Hajiji, the SEC would be set up first to pave the way for a regulatory framework to devolve authority over the matter from the federal government to the State.

Additionally, proposed projects to be implemented under the 2022-2041 Sabah Power Supply Generation Development Plan include a 100MW CCGT plant at Kimanis in Sabah’s West Coast and an upgrade of the power distribution grid from Segaliud (Sandakan) to Dam Road (Lahad Datu) and Mengalong (Sipitang) to Lawas, Sarawak.

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