Solar energy project enters 3rd phase


Qualified bidders now has the opportunity to be part of the government’s open tender for the third phase of the country’s large-scale solar (LSS3) project with a development value of RM2 billion.

Energy, Science, Technology, Climate Change and Environment Minister Yeo Bee Yin (picture) said the move is part of the government’s aim to increase clean energy generation of up to 20% from renewable energy (RE) by 2025, which is a huge jump from the current 2%.

She said the competitive bidding process for the LSS3 programme, which offers 500MW, will be opened for a six-month period before Aug 19, 2019, while the outcome of the exercise is expected to be announced by the end of the year.

“This is an open tender, free for all. Whoever that can give us the lowest price for the first 500MW and pass the financial and technical requirement will be the winner,” she said at a press conference on the LSS3 scheme bidding process in Putrajaya last Friday.

The bidders are also required to source expertise in engineering, construction and commissioning from local firms, while the project could be partially owned by foreign firms.

“Foreign ownership can be up to 49% , but the contractor for engineering, construction and commissioning must be 100% local as there are enough competitive local players in Malaysia, who, however, may not have enough financial muscles.

“We (also) do not limit procurement because we want the best price, so we can reduce the cost of the project,” Yeo said, adding that the project will create 10,000 employment for Malaysians.

Yeo said upon commercialisation, every 1MW solar plant would be able to generate up to 1,490MW of energy.

As a result, she said the project could produce electricity to about 160 houses and reduce 1,034 tonnes of carbon dioxide (CO2) emission annually.

“That equals to a 1,000 acre (404.7ha) of CO2 absorption from the forest. In a year, 500MW of RE could reduce up to 517 kilo-tonnes of CO2,” she said.

LSS3 is the continuity of LSS1 and LSS2 — a total of 958MW clean energy generation which is scheduled to be realised by 2020.

Both phases were heavily oversubscribed which saw more capacity awarded than originally tendered.

For instance, the LSS2 tender was originally only for 460MW before the capacity was increased to roughly 563MW.

Yeo said for the LSS3 scheme, the quota limit offered to each developer will be increased to 100MW from 30MW previously, which would allow project developers to obtain better financing rates from financial institutions and have a better economy of scale.

She said the quotas offered to developers will no longer be based on the capacity of range in order to allow companies to bid for higher capacities.

Yeo said the government is confident that by 2030 or earlier, electricity tariffs can be lower and competitive against the conventional power generation such as fossil and coal.

“Tariffs are more stable for RE because they are calculated based on the levelised cost of electricity or energy, depending on how long the project is.

“It does not rely on the global prices of fuel which is an issue we are currently faced with,” she said.

As such, Yeo said LSS3 could offer a better tariff to the public at large, which could be lower than the LSS2 — rated at 33.98sen per kilowatt hour (kWh).

“While solar tariffs went as low as 33.98 sen per kWh under LSS2, we believe that tariffs could go lower with this open tender exercise and welcome the lowest prices,” she said.

The request for proposal form for LSS3 is open for purchase until Feb 27, 2019.