EC launches baseload gas tender
The Energy Commission of Malaysia has launched a tender for new baseload generation capacity with gas as the energy source, to meet daily power needs.
The tender is divided into two categories. The first category is for upgrades or continued use of existing facilities whose power purchase agreements are expiring within the next four-to-five years. Additional capacity may be awarded to these plants. The second category is for the development of new greenfield gas-fired power plants.
EC did not indicate the amount of capacity it requires but it said that successful bidders in the first category will have their concession period extended and additional capacity to the facility will be granted.
The RFP is seen as rare opportunity for the development of new gas power plants in Malaysia, as the country moves towards heavier reliance on renewable energy, to ensure the sufficiency and stability of continuous energy supply.
This is the first tender for combined cycle gas-turbine (CCGT) power plant in Malaysia since 2016 when the 1.2GW Pulau Indah power plant developed by Worldwide Holdings, 75%, and Korea Electric Power Corporation, 25%, was awarded. The scheme commenced operation this year.
While the country has not had a power plant award since 2016, the Energy Commission has been holding tenders for solar power capacity. Tenaga is reported to have already signed 5.9GW in power deals with data centre operators, with demand projected to grow 5% a year.
For the latest tender, the commercial operation for the new projects is targeted to be between 2025 and 2029 as 9GW of existing capacity is set to expire by 2030 and with limited new projects, the country could face an estimated shortfall of 4GW–5GW of new CCGT capacity by then.
The tender is expected to stabilise Malaysia’s power supply and maintain reserve margins at optimal levels. The current level is said to be around 40% but this is expected to decline steeply by 2028 and 2029 due to rising demand for data centres and industrial expansion.
The tender is expected to fill the gap expected between 2027 and 2029 when a number of power purchase agreements will expire. These include: Prai power plant owned by Malakoff, 350MW, expiring in August 2025; Segari Energy Ventures, Malakoff, 1.3GW, 2027; Gelugor power plant, Tenaga Nasional, 310MW, 2027; Edra Power, China General Nuclear Power Corp (CGN), 720MW, 2027; Teknologi Tenaga Perlis Consortium, 650MW, 2027; SJ Tuanku Jaafar, Tenaga Nasional, 1.5GW, unit one in 2028 and unit 2 in 2030; and Kapar Energy Ventures, Tenaga/Malakoff JV, 2.2GW, 2029.
Tenaga and Malakoff appear to be the leading contenders for Category 1, as both currently operate about 2GW of gas-fired capacity and their PPAs are expiring soon. They are expected to benefit most from Malaysia’s first power plant tender in more than 10 years, as demand rises sharply due to data centres. Edra Power, which has 1GW in existing capacity, is also expected to compete.
For Category 2, likely bidders include Tenaga, Malakoff, YTL Power International and Edra. Petronas Gas has been mentioned as likely to submit a bid as well.
They are all expected to participate in the latest tender, either through PPA extensions with new capacity or greenfield power plant developments.
The RFP documents were available for purchase until May 20. Bid submissions are to be made by June 16 this year for Category 1 and July 14 for Category 2.
Assuming a four-year timeline to develop a greenfield CCGT power plant, the Energy Commission may have to award projects within the next 12–19 months.
