The Edge Financial Daily reported that the government will carry out an open tender next year for the third round of the 500MW large-scale solar projects worth an estimated RM2bil.
The Energy, Technology, Science, Climate Change and Environment Minister Yeo Bee Yin said that this is part of the country's plans to achieve 20% of energy production from renewable sources by year 2025F.
The details of the work packages will be announced in January 2019.
This is positive for the power companies. While the government has cancelled four IPP projects, it is also opening up the solar side via an open tender. We believe that Malakoff and Tenaga Nasional would be bidding for the power projects.
We reckon that some of the criteria which the government would be looking at are the cost of the project and whether or not, the bidders have the balance sheet to secure funding.
We do not know if companies would be allowed to bid for more than one power plant. The size of the solar power plants is expected to range from the smallest size of 3MW to the largest 50MW.
The issues with solar power plants are costs and scalability. According to an industry player, the cost of solar is about RM0.40/kWH compared with less than RM0.30/KwH for coal.
Currently, the feed-in tariff for solar power plants is being subsidised by the Renewable Energy Fund. This is funded by surcharges paid by domestic customers. Households consuming more than 300/kWh are required to pay the surcharge.
Tenaga's Sepang power plant, which is 50MW, is expected to start commercial operations anytime soon. From 2019 to 2020, we believe that six solar power plants, which already have PPAs with Tenaga, are expected to come onstream in Malaysia. These include Kenyir Gunkul Solar Sdn Bhd's 30MW plant in Dungun, Terengganu, which will start operations in December 2019.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....