GEORGE TOWN: Deputy Prime Minister Datuk Seri Fadillah Yusof tonight witnessed the signing of a memorandum of understanding between the Penang Development Corporation (PDC) and TNB Power Generation Sdn Bhd ( TNB Genco).
The MoU marks the start of the implementation of a feasibility study for a potential joint venture in the development of the Aeroderivative Gas Turbine (AGT) and Battery Energy Storage System (BESS) at the Gelugor power station.
The Gelugor power station has been operating for over 20 years and continues to reliably meet electricity demand in Penang.
With a generation capacity of 330MW, the station supplies about 40 per cent of Penang's current electricity demand, while the remainder is supplied through grid connections from the mainland.
Penang, often referred to as Malaysia's Silicon Valley, is home to numerous heavy industries and microchip factories that are currently operational and set to open soon.
These industries are highly sensitive to voltage dips, which can negatively impact them.
Speaking to newsmen later, Fadillah congratulated TNB Genco and PDC for signing the MoU to explore green energy-based power generation in Penang, specifically at the Gelugor power plant.
He said he had personally seen the area earlier in the day.
"And the potential for green energy supply in this region is very promising. I am very pleased to see the collaboration between the state and TNB, and I hope this will drive and ensure the reliability and stability of the energy supply, especially for Penang.
"This initiative not only aims to create job opportunities but also to increase revenue for the state itself," he said.
TNB Genco managing director Muhamad Nazri Pazil said the addition of data centres would significantly increased energy consumption, as data centres could be completed in a shorter time compared to power generation plants.
He said, furthermore, aligning with the government's goal of achieving a 40 per cent renewable energy mix by 2035 and 70 per cent by 2050, this will increase generation intermittency, especially in the northern zone where most solar installations are expected due to better radiation.
"Therefore, once the Gelugor power station ceases operations, a 100 per cent dependence on supply through the cross-sea grid poses risks if there are no generation plants on the island to act as an 'UPS' to support megawatt or voltage dips quickly.
"Thus, TNB Genco and PDC plan to revitalise the site with the proposal to install Aeroderivative Gas Turbines (hydrogen ready) and BESS at the Gelugor Power Station.
"Once completed, this plant will be one of the most modern in its class, featuring a unique design, environmentally friendly features, and an aesthetic appearance that harmonises with the surroundings.
"This project also offers cost savings due to existing infrastructure such as gas pipelines and transmission lines," he said in his speech.
Nazri said the project implementation plan is expected to be completed in two phases: the first phase included the Aeroderivative units with a capacity of 300MW and BESS with a capacity of 200MWh on a nine-acre vacant land, subject to the feasibility study's results.
He said the second phase would accommodate 900 MW BESS on the remaining site
"The potential collaboration between TNB Genco and PDC will commence the Aero–BESS feasibility study after the signing of this MoU and is expected to be finalised within a maximum of 12 months.
"If all goes well and the Aero and BESS project award letter is obtained in early 2026, the BESS project is expected to reach commercial operation in 2027 with a 12-month lead time for procurement and site implementation.
"Subsequently, by the end of 2028, the Aeroderivative project is anticipated to begin operations after a 30-month lead time for procurement and site implementation.
"The redevelopment of the Gelugor power station will undoubtedly result in continuous economic spillover effects in Penang, benefiting the local economy and the supply chain industry.
"This collaboration signifies our dedication to adopting advanced technology that will not only ensure a stable and reliable power supply for Penang but also contribute to the national energy transformation goals," he added.
Meanwhile, PDC chief executive officer Datuk Aziz Bakar described this collaboration as historic and meaningful.