Harnessing the power of the wind energy in Malaysia

Malaysia is not exactly known as a land where the wind blows, but is there potential in harvesting the little wind we do get into a renewable energy source?

Incredulous as it may sound; non-windy Malaysia could very well have its very first wind farm within the next two years.

The wheels are already turning.

Tenaga Nasional Bhd (TNB) last month roped in Argentina’s renewable energy firm Industrias Metalurgicas Pescarmona S A (Impsa) to determine the actual wind generation potential Malaysia has. If all goes well, the duo would form the nation’s first independent power producer (IPP) running on wind-powered turbines.

Impsa (M) Sdn Bhd Managing Director Juan Aguero tells Malaysian Business: `I can’t give you many details, as some are confidential; but I can tell you that we have already selected the (potential) sites and are starting to do the works for the installation of the measurement towers in collaboration with TNB.’

A wind speed of at least seven metres per second (m/s) is needed to turn the blades of a wind turbine. While Malaysia only has an average wind speed of 2m/s, there are areas that more than meet the 7m/s minimum criterion. Wind along the Malaysian-Thai border, for example, is believed to stream at nearly 15m/s.

Among the potential sites Impsa has identified are in Kota Kinabalu, Mersing, and Kuala Terengganu. Towers of at least 80m high would be erected to measure wind data, such as speed and consistency, in these locations. Typically, a year of `very accurate’ wind data is needed to determine the suitability of a promising site for a wind farm.

`Once we certify the wind data in those selected sites, we will proceed with the feasibility studies for further development. The towers will be measuring wind data for about a year. However, we don’t need to wait that long to commence with the feasibility studies and business analysis. That would be done as soon as we get reliable data. My guess is about the middle of next year,’ Aguero says.

According to Impsa Chief Operating Officer Lucas Pescarmona, it costs between US$ 1.8 million and US$ 2.5 million to generate one megawatt (MW) of wind power.

`I’m sure Malaysia can do anywhere from 500-2,000 MW of wind energy and be competitive about it,’ he says.

The thing about wind-generated power is this: `You know exactly how much wind is going to cost in the future, but do you know how much coal will cost?’ says Pescarmona.

Impsa is currently involved in two wind farm projects in Brazil and five wind farms in Argentina. Closer home, Impsa recently installed six wind towers in Vietnam, the country with the highest wind resource in Southeast Asia.

Impsa, which has a workforce of over 7,000 people worldwide, is the leading developer of power generation from renewable resources in Latin America focusing on hydro and wind energy. It also manufactures components for nuclear power plants.

Impsa has been operating in Malaysia since 1989 and its plant in Lumut is one of the three manufacturing plants it has globally. Impsa Malaysia is better known as a ship-to-shore (STS) crane manufacturer, commanding more than half the market of all locally manufactured STS cranes.

Impsa (M) Sdn Bhd is a joint 40:60 venture company between Impsa and local partners. Emir Equity Sdn Bhd (controlled by Impsa Malaysia Executive Chairman Datuk Moehamad Izat Emir) holds a 20% stake in the company and Bidan Mulia Sdn Bhd the balance 40%.

On the energy side, Impsa Malaysia is supplying four of the eight hydro turbines for the 2,400MW Bakun Hydropower Project. It is also pursuing over RM1 billion worth of contracts to supply hydropower plant components in Asia.

`Some of the projects we are pursuing are in tender stages, like Hulu Terengganu HEPP. Others are under different stages of discussions with developers, as in the case of the Sarawak Corridor of Renewable Energy (SCORE) programme and also some projects in Thailand and Vietnam,’ shares Aguero.

`With the world-class production facility that we have in Malaysia, the only one of its kind in Southeast Asia, we aim to be the leader of the fast-growing renewable energy market in the region,’ he adds.

According to Aguero, more than RM250 million has been invested in Impsa Malaysia in the last five years alone to upgrade its installations, purchase new machinery and training (transfer of technology); and another RM50 million will be pumped in over the next two years.

`We will continue to invest in Malaysia,’ announces Impsa President Enrique Pescamona, who is also the father of Lucas Perscamona.

Pescamona Sr, the third-generation of Pescarmonas running the global family business, is all praise about the operations in Malaysia.

He says the quality and productivity achieved in the Lumut factory is `top of the class in the world’, and describes the local workforce as `very reliable, good workers and learn fast’.

`We hope we can continue to have success in Malaysia,’ he adds.

The Lumut plant not only manufactures parts for Impsa’s local and regional projects, it also makes hydro turbines for projects in Venezuela. Impsa is more than eager to commence wind turbine production there.

`We want to make wind turbines here. We can even start today!’ Pescamona quips.


Impsa describes Bakun as `the most efficient power station in the world’.

`It is a super project, maybe the best (hydroelectric) project in the world. I have never seen a project like this in my life and I’m 67 years old,’ Enrique Pescarmona says.

He says that it is `normal’ that `people like to complain’ about the costs associated with such a mammoth project but the numbers speak for itself. `It is the cheapest hydroelectric plant in the world. If I may say so, dirt cheap,’ he stresses.

He says if a project like Bakun were to start now, the cost for the project would easily be three times more expensive than Bakun (see table).

According to him, Impsa’s original contract for Bakun was RM461 million but last year, it was awarded a commercial settlement of an extra of RM145 million due to delays in the project. The turbines were originally scheduled to be delivered three years ago. Steel prices have since escalated from US$ 400 a tonne to US$ 2,000 a tonne, likewise the prices of other materials such as stainless steel and copper.

`The most important part of the project is that it will save US$ 2 billion a year, meaning the project will be repaid in a year. This is the only project that will repay itself in a year of operation,’ he adds.