CRESS Acceleration Package Strengthens Firm Renewable Supply -- MBSB IB

KUALA LUMPUR, Sept 21 (Bernama) -- The Corporate Renewable Energy Supply Scheme (CRESS) Acceleration Package is viewed as the most significant enhancement to the framework, with the preferential reduction for firm CRESS reflecting the lower system burden associated with dispatchable renewable supply. 

Recently, the Ministry of Energy Transition and Water Transformation (PETRA) announced an acceleration package for the CRESS, anchored by a lower system access charge (SAC) of 14 sen per kilowatt-hour (kWh) for firm supply. 

The package also includes a minimum 10-year contract period between renewable energy developers (REDs) and green consumers, as well as a commercial operation date (COD) deadline of Dec 31, 2028.

MBSB Investment Bank Bhd (MBSB IB) said pairing solar with a battery energy storage system (BESS) enables firm projects to smooth out intermittency and reduce balancing and reserve requirements on the grid, making them more valuable from a system reliability perspective than non-firm supply.

For engineering, procurement, construction, and commissioning (EPCC) players, the investment bank said firm CRESS structurally brings BESS into the project scope, increasing the addressable contract value per megawatt of solar deployed. 

"The hard end-2028 COD deadline could also create a rush to move eligible projects into construction over the next two years, supporting a near-term order book boost. 

"Beyond acting purely as contractors, EPCC players could also participate as REDs themselves, allowing them to capture both development returns and EPCC margins from CRESS projects," it said in a note.

Hence, MBSB IB maintained its "positive" stance on the renewable energy subsector, as the latest developments should improve project conversion and widen the pool of commercially viable CRESS developments.

-- BERNAMA