Bus iness Overvi ew Sect ion 01 23 Annual Report 2022 ENGINEERING SERVICES SECTOR Outputs, Performance Highlights & Achievements, Values Created Potential Risks, Issues & Challenges Opportunities & Strategic Priorities Business Strategies - Ranhill Water Services (“RWS”) • Additional 25 MLD saved from undertaking NRW projects in Johor. Total NRW reduction track record now stands at 751 MLD. • Established 26 DMAs (95% connection coverage in Johor). • Secured two pipe rehabilitation contracts from PAAB and JKR with a cumulative value of RM100 million. • Secured an integrated command centre development contract with Ranhill SAJ. • Collaboration with PETRONAS Global Technical Solution (“PGTS”) to co-develop analytical tools to further upgrade AquaSMART. • Inability to deliver on contracts due to further lockdowns or delays in regulatory approvals. • Lack of skilled and specialised industry talents. • Lack of competent and qualified contractors and sub-contractors post the COVID-19 pandemic. • Opportunities to propose and undertake NRW loss management programmes under Approach 2 of the Matching Grant for Johor, Melaka, Selangor, Perak, Penang and Terengganu. • Target private sector players and as government agencies for NRW related projects. • Develop strategic partnerships with OEM product manufacturers.to strengthen supply chain and drive cost efficiencies. OUR STRATEG I C SNAPSHOT ENERGY SECTOR Business Strategies / Focus Areas Outputs, Performance Highlights & Achievements, Values Created Potential Risks, Issues & Challenges Opportunities Strategic Priorities • Continued implementation of COVID-19 SOPs across power operations. Strictly follow the SOP to prevent operational disruption and protect staff and stakeholders from the risk of infections. • Maintain a high level of operational performance to ensure continual achievement of industry regulator’s and Power Purchase Agreement (“PPA”) KPIs with high Equivalent Availability Factor (“EAF”), RPI/Availability Target (“AT”), RPII and low Force Outage Rate (“FOR”), RPI/Unplanned Outage Rate (“UOR”), RPII. • Reduction of gas consumption to reduce OPEX through efficient heat rate management. • Continue the pursuit of new conventional power plant projects in Sabah (immediate term), Peninsular Malaysia and South East Asia (long term). • Increase efforts to explore RE potentials, both locally and abroad. • Both RPI and RPII had achieved total gas consumption that meet the requirement of the Gas Sales Agreement (“GSA”). No penalty is imposed. • Generated 2,392 kWh for the Sabah electricity grid. • Outperformed the PPA for EAF/AT and FOR/ UOR. • GT11 and GT22 at RPI was successfully commissioned with a new refurbished Rotor and Rotor that has undergone the Lifetime Extension. • RPOMII, which is operating and maintaining RPII, Rugading Power Station, achieved ISO9001 certification in first quarter (“Q1”) of 2023. • Lack of conventional plant-ups or RE projects in Sabah. • Lack of heavy industries to drive up consumption demand. • Low power dispatch during off-peak. • Changes in state government policies and regulatory with regard to the energy sector in Sabah. • Non-renewal of PPAs. • Lack of success with the Rugading Tax appeal. • The requirement for both Teluk Salut and Rugading to stay connected to the grid for prolonged periods to support peak demand can disrupt scheduled maintenance activities. • Uncertainty of currency exchange rate may escalate project costs. • Expected increase in plant-ups to address Sabah’s low energy generation capacity situation. • Expected increase in manufacturing based investments into Sabah to provide increased impetus to expedite plant-ups. • Continued positive prospects in demand for RE projects in Malaysia and Southeast Asia. • Ability to leverage the Group’s international presence to pursue potentials in Southeast Asia. • Increasing appetite among private sector companies to adopt RE, notably solar i.e. Corporate Green Power Program (“CGPP”). • With the possible liberalisation of the gas supply industry and the implementation of the third-party agreement in the future, there is potential to explore a wide range of suppliers. • Continuous running of both plants has improved the Load Factor (“LF”) which is translated to high Net Energy Output (“NEO”) gained. • Continued stakeholder engagement for projects such as LSS potentials, the 100 MW CCGT in Sabah and Tawau geothermal power plant. • Pursuit of potential opportunities in hydro, mini-hydro, wind and solar, locally and abroad. • Continue to outperform the EAF/AT and meet the requirement of FOR/OUR in the PPA by proper execution of scheduled and preventive maintenance. • Achieve Commercial Operation Date (“COD”) for Ranhill Solar 1, 50 MWac in Bidor, Perak.
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