THE Energy, Green Technology, Science and Climate Change Ministry has cancelled four independent power producer (IPP) contracts awarded under the Najib Razak administration, citing issues with the direct-negotiation process.

Minister Yeo Bee Yin said other IPP contracts will be reviewed and some projects will be subject to tender. She did not name the cancelled contracts.

“For certain reasons, the previous government approved a lot of IPPs, IPP contracts, through direct negotiations, direct awards, to build up our capacity,” she told a town-hall session with energy stakeholders this morning.

“Users need to pay for that capacity. Because of this, the new government is reviewing many of the IPP contracts,” she told 1,500 participants at the event, co-organised by the Sustainable Energy Development Authority (Seda).

Yeo said industry players should not be disappointed if they fail to organise a “one-to-one” appointment with the ministry.

“You are on a level playing field when it comes to anything we open for tender in the ministry.”

During the keynote address, Yeo stressed the need to boost renewables for the energy grid from the current 2% to 20% by 2025.

Dependence on coal increased from 8.3% in 1996 to 42.5% in 2016, she said, and this is a strategic issue as Malaysia does not produce coal. 

During the session, the participants raised issues, such as ensuring a level playing field for local energy producers and reducing red-tape or regulatory laws that bind ministries.

An online poll conducted during the session showed that the biggest concern is corruption during Seda’s implementation of the feed-in-tariff (FiT) programme, which is alleged to cost industry players an additional RM1 million per megawatt.

The second most urgent call was for the government to end Tenaga Nasional Bhd’s (TNB) monopoly, to give others a chance to enter the renewables market.

Yeo told the participants that the ministry is keen to receive feedback on corruption allegations.

“I need more information on this FiT quota, and how we are going to proceed. But rest assured, some of you who actually have evidence and all that, you can email to [email protected].

“We are going to investigate it. If it involves corruption, we will forward the case to the Malaysian Anti-Corruption Commission. But rest assured, the FiT quota will be back.”

She said the TNB issue will be addressed as part of a looming power sector reform.

“When I entered the ministry eight days ago, I was told about the renewable energy programme. Then, the Energy Commission told me about the power sector reform coming up. And then, I was told about the Energy Efficiency Act, which will also come up.

“And of course, in the cabinet, we discussed the waste-to-energy plan. And then, close to my heart, there’s the rural electrification plan, and some of you now ask me about electric vehicles.

“So, the entire plan now is that, in my ministry, there is the renewable energy, energy efficiency and power sector reform coming up.

“But, I don’t want to tell you the plan yet, because there was no synergy to the plan when I came in eight days ago. I want to come in and listen to you, and go back and look at all the plans for now, and then come back to you later.

“So, that will take some time. I want everything to have synergy and at least come under one plan. After that, we will have more engagement.”

Yeo said further engagements with experts and policymakers will be conducted before another town-hall session with industry players to report on the reform’s progress.

“We elected a lot of MPs who are in the policymaking process, we will hold caucuses that include state reps to discuss the plans. I’ll come back to you.

“There are a lot of strategic plans. But one thing I’ve found out is that Malaysians make a lot of plans, but Malaysians do not have the will to implement the plans with excellence.

“In the short term, we will have policies coming forward. We need time for more engagement for long-term planning,” she said, adding that she intends to have long-term plans crystallised in the form of institutions that will continue serving industry players after she has left office. – July 12, 2018.