PETALING JAYA: Tenaga Nasional Bhd (TNB) will continue to pursue growth in renewable energy (RE), both in the domestic and international markets, as it sees significant opportunities in this area.
As the world shifts to more sustainable energy sources and despite rising competition, TNB’s chief strategy and ventures officer Datuk Fazlur Rahman Zainuddin (pic, below) sees growth potential in the United Kingdom, Europe and South-East Asia.
According to him, TNB has gained considerable experience and capabilities through its two RE investments in the UK, namely Vortex Solar and Tenaga Wind Ventures.
“These two investments have been performing above expectations at both technical and financial levels over the past three years, ” he told StarBiz.
According to him, the electric utility group will continue to expand in the region in line with its international RE growth strategy through the establishment of a renewable asset company (RACo), with Vortex Solar and Tenaga Wind Ventures serving as seed assets.
“RACo will be the platform for TNB to achieve our RE target of 5GW (gigawatts) by 2025. We will also be pursuing greenfield RE opportunities in markets and technologies that we are familiar with and where we have presence on the ground, ” he added.
TNB’s aim of 5GW RE capacity, worth RM33bil, would contribute some RM2bil in earnings before interest and taxes (Ebit) by 2025.
However, Fazlur said “assets acquisition would not come cheap as investors continue to demand and invest into RE assets, driving prices in the secondary market up steadily over the past three years”.
Within the region, TNB is eyeing expansion in Vietnam and Singapore markets.
“With the high growth in Vietnam feed-in tariff, it is an obvious destination for RE investors. Besides solar, Vietnam also offers wind potential, which is a resource that we intend to explore, ” he said.
As for Singapore, there’s high demand for green corporate power purchase agreements or PPAs in that market.
With Malaysia and Singapore already connected via the grid, he said it is ideal to offer “green” cross border energy to the wholesale market, corporate customers and even retail customers.
On Malaysian prospects, Fazlur said TNB is positive on developments, especially in the solar industry where it is looking forward to the subsequent rounds of the LSS (large scale solar) bidding.
Besides this, it is also exploring options in the new enhanced dispatch arrangement or NEDA, corporate PPAs, rooftop solar and sustainability solutions for customers.
“Through our subsidiary GSPARX Sdn Bhd, we have seen rooftop solar capacity increase by 54.5MW in 2020, bringing the total number to 81.07MW. GSPARX is targeting an additional 100MW in 2021, ” he said.
Fazlur said the utility group’s solar assets performed well last year despite Covid-19, similar to its RE assets in the UK.
“TNB Sepang Solar has outperformed its energy yield target for the second consecutive year in a row since achieving commercial operation date (COD) in November 2018. The TNB Bukit Selambau project was commissioned 114 days earlier compared with the scheduled COD, and has been operating effectively, meeting our expectations since the COD on Sept 8,2021, ” he shared.
In 2020, disruptions brought about by the pandemic saw the utility group reviewing and refreshing its strategic transformation plan - Reimagining TNB - with a new aspiration to be the leading provider of sustainable energy solutions in Malaysia and internationally.
Of the RM65bil capex set aside for the 2020-2025 period, RM27bil has been set aside to grow its generation assets including developing RE assets in Malaysia, South East Asia and Europe; explore new hydro power expansion; and scale up the turnaround program of its thermal generation assets.
Meanwhile, RM36bil has been allocated to modernise its distribution and grid network, including the roll-out of its smart meter programme across the peninsula.
“This is part of our strategy to deliver the Grid of the Future, which is a prerequisite to a successful energy transition for the country and to effectively enable a sustainable energy future, ” said Fazlur. The remaining RM2bil would be invested in new digital offerings by the retail business to win customers in both electricity and beyond electricity business.
TNB is due to announce its financial result for the fourth quarter ended Dec 31,2020 tomorrow.