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TNB to hasten clean energy transition as it eyes 'significant share' of RM80 bln market

02/08/2022 03:33 PM

KUALA LUMPUR, Aug 2 (Bernama) -- Tenaga Nasional Bhd (TNB) is exploring the viability of retiring its coal plants, especially the one at Kapar Energy Ventures (KEV) in 2028-2029 - a year before the expiration of its power purchase agreement (PPA), in order to hasten the transition process to clean energy as it eyes a “significant share” of the estimated RM80 billion market by 2050.

"We hope to start with Kapar Energy Ventures (KEV) and are exploring the viability of retiring the 1400 MW plant up to a year ahead of its PPA expiration subject to shareholders' agreement and approvals from the relevant authorities and regulators.

“As for repowering plants with new technology, we have recently received a Letter of Intent to allow the repowering of our 1400 MW gas-powered plant in Paka, which we intend to make hydrogen-ready by 2029," president and chief executive officer Datuk Baharin Din said during an editors briefing today.

TNB is also actively seeking to build strategic alliances with technology partners who are able to provide technology, capability, and capital synergy to position TNB Power Generation Sdn Bhd (GenCo) as a greener and more sustainable player in the power generation sector, he added.

This includes seeking potential collaborators to further the development of hydrogen as a viable clean source of energy, he said.

Baharin said “TNB is committed to turning GenCo around in terms of its environmental, social and governance (ESG) performance to become a greener power generator.”

“As demand for clean energy increases with the energy transition, we project the value of the clean energy market to be an estimated RM65 billion to RM80 billion, and we intend to capture a significant share of the market, about RM40 billion by 2050,” he continued. “Through these deliberate steps to increase its enterprise value and sustainability position, we are also staying open to the possibility of an initial public offering (IPO) for GenCo, should the opportunity come up.”

The measures focus on both reducing emissions and charting business growth for TNB from clean energy technologies such as carbon capture, utilisation and storage (CCUS), hydrogen as a clean fuel, and early assessment of small modular reactors if proven commercially viable. The venture into new green technology is also expected to augment the growth of new economic sectors.

These initiatives are to fast-track the pursuit of its sustainability aspiration of net zero emissions by 2050 that the company announced last year, in ongoing efforts to achieve ESG targets, as well as ensure continued business growth for the national utility company.

The initiatives cut across the electricity value chain, from transitioning power generation to cleaner sources, enhancing the Grid of the Future (GoTF) to enable more green solutions and facilitating consumer participation in the energy transition, including through electric vehicle (EV) adoption.


Expanding Focus Markets to Grow RE Portfolio

Driven by the new energy division, TNB is committed to supporting the Malaysia Renewable Energy Roadmap (MyRER), which aspires to achieve 31 per cent renewable energy (RE) capacity by 2025 and 40 percent by 2035. Internationally, TNB plans to grow its RE portfolio in existing, as well as adjacent markets, across the Asia Pacific and Europe.

The growth would be executed by deploying and expanding expertise in the development of RE assets across solar and wind, both onshore and offshore, complemented by utility storage in select markets. One of the key enablers to TNB’s RE growth strategy is to enter into strategic partnerships in order to expedite market entry and capability development to deliver operational excellence.

TNB aims to potentially capture over 14 GW of RE capacity by 2050, which will translate into a CO2 avoidance of an estimated 6.9 million Tco2/MWh.


Continued Investments for Grid of the Future

As the custodian of the nation’s power infrastructure, TNB will continue its investments to develop the Grid of the Future as a critical enabler of the country’s energy transition. Under the Regulatory Period 3 (RP3), RM2.6 billion is allocated for the energy transition to balance grid security, sustainability and affordability.

“To this end, we continue to engage with policymakers and regulators to ensure TNB is able to apportion sufficient investments to strengthen and upgrade the grid infrastructure. We aim to achieve a score of 85% on the Smart Grid Index by 2025 from 67.9% currently,” explained Baharin.

Beyond the national grid, TNB also advocates for regional collaboration to strengthen inter-regional grid connections, in particular for the ASEAN region towards greater energy security.


Focus on EV Ecosystem Development

In efforts to empower customers to participate in the energy transition, TNB aims to accelerate EV adoption to capture a potential RM1.3 billion market value by 2030. TNB will invest RM90 million to support the EV ecosystem over a span of three years, focusing on five areas, including reskilling the EV industry; electrification of TNB’s own fleet; building charging infrastructure; sponsoring EV-related studies and fostering coalitions among EV sector players.

“These efforts are aimed at uplifting the demand-side of the power sector by promoting the adoption of EVs, with a target to reach 500,000 EVs on Malaysian roads by 2030.

“Half a million EVs translates to approximately 2.318 TWh of electricity charging requirements, valued at almost RM1.26 billion. Not to mention the added benefit of 4.4 million tonnes of CO2 emission reduction by taking internal combustion engine vehicles off the road.

“The potential positive impact to both climate and the company’s bottom line makes the development of the EV ecosystem a clear priority for TNB,” said Baharin.


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