KUALA LUMPUR: Renewable energy (RE) demand in Malaysia is expected to remain resilient despite higher-than-expected grid access charges under the Corporate Renewable Energy Supply Scheme (CRESS), supported by growing demand from data centres and corporate decarbonisation commitments.
Hong Leong Investment Bank (HLIB) Research and MBSB Research maintained their positive outlook on the RE sector, saying the revised charges were unlikely to materially dampen demand for green electricity.
This follows a clarification by the Energy Commission that green consumers under the CRESS Acceleration Package will have to pay an additional system access charge (SAC) of four sen per kilowatt-hour (kWh), on top of the 14 sen/kWh charged to renewable energy developers.
This effectively brings the combined SAC to 18 sen/kWh, rather than the previously understood 14 sen/kWh. This represents a net reduction of just 2 sen/kWh from the previous 20 sen/kWh, compared with the 6 sen/kWh headline reduction initially perceived.
Ultimately, this is still a -7 sen/kWh (-28.0%) reduction for firm SAC since the inception of CRESS in 2024.
HLIB Research said the revised structure was slightly negative for RE developers as it narrowed the room for negotiations with green consumers.
However, it expects near-term CRESS demand to remain intact, supported by data centre operators' decarbonisation commitments and potential electricity cost savings.
"Although we view the revised SAC structure as slightly negative for RE developers, the near-term CRESS demand is expected to remain intact," it said in a report.
MBSB Research, meanwhile, viewed the revised structure as a more balanced allocation of costs and risks between RE developers and green consumers.
Under the revised arrangement, developers will pay a fixed SAC of 14 sen/kWh for 10 years from the commercial operation date (COD), while green consumers will pay a separate four sen/kWh charge through Tenaga Nasional Bhd
's (TNB) billing system.
The charge payable by green consumers will be subject to review every three years under subsequent regulatory periods.
MBSB Research said the revised structure provided greater transparency on the costs associated with integrating renewable energy into the national electricity grid.
It noted that green consumers continued to rely on the national grid for transmission, system balancing, network capacity and backup supply even when purchasing electricity directly from RE developers.
Without an adequately cost-reflective charge, the additional infrastructure costs could ultimately be passed on to other electricity consumers, it said.
Based on an illustrative electricity bill presented during an industry engagement session, MBSB Research said an ultra-high-voltage consumer using 48 million kWh of electricity monthly, including 18 million kWh procured through CRESS, would see its monthly bill fall to RM28mil under the Acceleration Package.
This compares with RM28.4mil under the previous CRESS arrangement and RM28.8mil without CRESS, representing overall savings of 2.6% and 1.4%, respectively.
Both research houses said the revised charges were unlikely to materially affect demand from data centre operators and large corporate consumers.
HLIB Research said industry feedback remained positive, with data centre operators keen to secure RE supply to meet decarbonisation targets and hedge against potential increases in grid electricity tariffs and fluctuations in monthly automatic fuel adjustment charges.
MBSB Research also noted that the move towards a "bring your own power" model for data centres could further support CRESS adoption.
It cited a proposed 21-year renewable energy supply agreement involving a joint venture between Gamuda, Gentari and SD Guthrie and a US multinational technology company.
The proposed arrangement involves a 680-megawatt alternating current (MWac) hybrid solar photovoltaic facility supported by a four-hour battery energy storage system (BESS), targeted for commercial operations in 2029.
MBSB Research said the project demonstrated that large corporate consumers could continue pursuing CRESS arrangements even without preferential SAC rates, provided the overall commercial terms remained viable.
Meanwhile, both research houses highlighted potential opportunities for RE players from the existing CRESS project pipeline.
HLIB Research said that as of May 2026, 11 RE developers and eight green consumers had registered with the Single Buyer, representing a combined capacity of 3,148 megawatts (MW).
It estimated that these projects represented an addressable market worth between RM12.6bil and RM15.8bil for solar industry players.
The research house identified Solarvest Holdings Bhd, Samaiden Group Bhd, TNB and Northern Solar Holdings Bhd as potential beneficiaries.
However, both research houses cautioned that the strict Dec 31, 2028 deadline for projects to achieve commercial operations under the Acceleration Package could pose execution challenges.
MBSB Research said projects that failed to meet the deadline would lose their eligibility for preferential charges and become subject to the prevailing SAC rates.
It also warned that the concurrent development of CRESS and the sixth Large Scale Solar programme (LSS6), with commissioning targets around 2028 and 2029, respectively, could intensify competition for suitable grid connection points.
HLIB Research expects the Acceleration Package to primarily accelerate projects already undergoing offtake negotiations and preliminary development rather than generate substantial new demand.
On individual companies, both research houses noted that Solarvest remained on track to secure between 300MW and 500MW of CRESS contracts by the end of 2026.
Samaiden, meanwhile, has indicated that the revised charge has not materially affected ongoing negotiations or offtaker interest.
MBSB Research said Samaiden was targeting two to three CRESS projects for completion by 2028, each with a capacity of at least 100MW.
HLIB Research maintained its buy ratings on Solarvest and Samaiden, with target prices of RM4.85 and RM3.13, respectively.
MBSB Research also maintained its buy call on Samaiden, with a higher target price of RM3.72.
The research house identified TNB, Gamuda, Solarvest, Samaiden and Pekat Group Bhd as companies positioned to benefit from the acceleration of RE projects.
It maintained buy calls on TNB and Gamuda, with target prices of RM16.31 and RM5.60, respectively, while retaining a buy rating on Pekat with a target price of RM2.45 under review. Solarvest was not rated by MBSB Research.
Looking ahead, HLIB Research maintained its overweight rating on the RE sector, citing continued data centre expansion and the potential requirement for data centres to source 30% of their electricity from renewable energy.
MBSB Research also maintained its positive stance on the subsector, saying the need for long-term green electricity supply would outweigh near-term tariff uncertainties.
Both research houses expect the CRESS Acceleration Package to support project development and contract awards, although further SAC revisions and project execution delays remain key risks.
