Read more: http://www.btimes.com.my/articles/20111230232140/Article/
Kuala Lumpur: Malaysia's power sector is expected to sizzle particularly in the second half of next year and 2013 with 4,500 megawatt (MW) of newly installed capacity under way, an investment bank said. OSK Investment Bank also expects Tenaga Nasional Bhd (TNB) to benefit after the general elections as it could get the nod for new tariff hike. OSK noted with the new 4,500MW of new capacity coming on stream by 2016, it may be boom years again for the power engineering business. The replacement of the first generation power purchase agreements (PPAs) with new power deals should be positive in the long-term for both the independent power producers (IPPs) and TNB, although the impact would only be felt in 2016, it added. In its research report to investors, the investment bank said some 4,105MW of first generation capacity will be expiring between 2015 and 2017. Of this, at least 4,105MW of capacity needs replacing. Even with the 1,000MW expansion of Janamanjung and the 1,000MW expansion of Tanjung Bin, this still leaves Malaysia 2,105MW short, not to mention the expected growth in electricity demand. "With Bakun power in no way heading for Peninsular Malaysia, it would appear we are on the cusp of a power plant building frenzy. "This is reminiscent of 1993 when the first generation of PPAs were first awarded and it was contracts aplenty for power engineers in Malaysia. "We expect some of the new PPA licences to be awarded by mid-2012 to allow for plant completion in 2016," said OSK, which has tagged a "neutral" on TNB. Although the utility firm's long-term outlook is positive, OSK noted that over the short-term, the gas shortage issue will continue to nag TNB next year with eratic supply and gas price hike likely to be postponed. This would lead to a cut in the group's earnings forecast in the short-term.
Kuala Lumpur: Malaysia's power sector is expected to sizzle particularly in the second half of next year and 2013 with 4,500 megawatt (MW) of newly installed capacity under way, an investment bank said. OSK Investment Bank also expects Tenaga Nasional Bhd (TNB) to benefit after the general elections as it could get the nod for new tariff hike. OSK noted with the new 4,500MW of new capacity coming on stream by 2016, it may be boom years again for the power engineering business. The replacement of the first generation power purchase agreements (PPAs) with new power deals should be positive in the long-term for both the independent power producers (IPPs) and TNB, although the impact would only be felt in 2016, it added. In its research report to investors, the investment bank said some 4,105MW of first generation capacity will be expiring between 2015 and 2017. Of this, at least 4,105MW of capacity needs replacing. Even with the 1,000MW expansion of Janamanjung and the 1,000MW expansion of Tanjung Bin, this still leaves Malaysia 2,105MW short, not to mention the expected growth in electricity demand. "With Bakun power in no way heading for Peninsular Malaysia, it would appear we are on the cusp of a power plant building frenzy. "This is reminiscent of 1993 when the first generation of PPAs were first awarded and it was contracts aplenty for power engineers in Malaysia. "We expect some of the new PPA licences to be awarded by mid-2012 to allow for plant completion in 2016," said OSK, which has tagged a "neutral" on TNB. Although the utility firm's long-term outlook is positive, OSK noted that over the short-term, the gas shortage issue will continue to nag TNB next year with eratic supply and gas price hike likely to be postponed. This would lead to a cut in the group's earnings forecast in the short-term.
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