TNB to acquire FiT wind assets in UK, explore RE expansion in Singapore, Vietnam

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) is in discussions to acquire feed-in tariff (FiT) wind assets in the United Kingdom through its International Asset Group (IAG), said MIDF Research.

It said the country's utility giant is also in the midst of finalising discussions with Sunseap Group to explore renewable energy (RE) expansion in Singapore and Vietnam.

"For the former, TNB is looking at the potential of cross border RE sales to Singapore while for the latter, it is exploring the potential of rooftop solar," it said in a research note on Wednesday.

In October 2020, Singapore set a target of installing 2000MW of solar PV power by 2030, aimed at meeting the annual needs of circa 350K households.

"Based on Energy Market Authority (EMA) statistics, it was reported that Singapore has a solar capacity of 290MW as of first quarter of 2020, which means there is another 1,710MW required over the next 10 years to meet its 2030 target and is targeted to be led by the private sector," it noted.

As such, the research house estimates that Malaysia could provide meaningful support for this target, given the requirement for large land areas other than just rooftops to generate solar power.

"Singapore power sector runs mainly on gas and steam turbines, accounting for a collective 96 per cent of total capacity, while waste-to-energy and solar account for 2.0 per cent and 2.3 per cent of total registered capacity, respectively," it said.

On the imminent launch of pilot cross-border power trading, MIDF Research said EMA plans to issue a request for proposal (RFP) by March 2021 for 100MW of electricity imports, which will make up about 1.5 per cent of Singapore's peak demand.

"Under this RFP, electricity imports could begin as early as end-2021 via the existing electricity inter-connector between Singapore and Malaysia with only one importer will be selected through the open tender process," it said.

It said the trial aims to assess and refine the technical and regulatory frameworks for importing electricity into Singapore and to facilitate larger-scale imports from the region in the future.

The research house retains its 'buy' call with a target price to RM11.80, considering that the 100MW cross-border energy supply into Singapore has a potential positive for TNB towards achieving its target and gradually alleviating the ESG concern on its 'dirty fuel' exposure.

TNB aims to grow its overall RE portfolio to 8,300MW (including large hydro) by 2025.

On Tuesday, TNB through its wholly-owned subsidiary, TNB Renewables Sdn Bhd entered into a binding term sheet of collaboration with Sunseap Group to tap into the RE and corporate power purchase agreement market in Singapore.

-- BERNAMA