TNB to increase capex for grid enhancement

To date, TNB has adopted emerging RE technologies of solar, wind, biomass and biogas


TENAGA Nasional Bhd (TNB) will increase capital expenditure (capex) to support the transition to renewable energy (RE) on the back of solid financials despite a challenging year.

President and CEO Datuk Baharin Din (picture) said the company plans to spend more on its grid system which plays an important role in supporting the country’s energy transition to sustainable sources.

“Our regulated capex, related to enabling the energy transition, is expected to increase from 12.3% to 19.3% through our proposed RP3 (Regulatory Period 3) initiatives, which will allow more RE integration into the system,” he said after the company’s 31st AGM in Kuala Lumpur yesterday.

To date, TNB has adopted emerging RE technologies of solar, wind, biomass and biogas, translating into a generation capacity of 713.2MW.

As of March 2021, smart meter installation at premises across Peninsular Malaysia has reached 1.1 million as the company enhances infrastructure to accommodate the integration of disruptive technologies.

TNB’s wholly owned GSPARX Sdn Bhd has been awarded contracts to instal a total of 689 new solar panels, representing a total of 85 megawatts-peak (MWp) of green energy.

Baharin said the company seeks to increase its RE capacity to 8,300MW by 2025, driven by both domestic and international initiatives.

“As of March 2021, we had achieved 3,402MW of RE capacity, of which 2,736MW is within Malaysia and 666MW from international (sources).

“Complementing this target, our revenue from RE is expected to continuously grow to 10% in 2025 from 4% in 2020. We also expect our revenue from our investments in energy transition (ET)-related initiatives to grow from 4% to 9% in 2025,” he said.

Meanwhile, TNB chairman Datuk Seri Mahdzir Khalid said the coronavirus vaccine rollout has offered a sense of optimism on the economy pick-up compared to 2020, which has resulted in higher demand for electricity.

“TNB is also looking to further improve industry efficiencies and enhance customer experience while continuing to promote the use of sustainable energy as we balance the grid system’s security and affordability,” he said at the virtual AGM.

With 2020 being considered the most challenging year since the financial crisis in 2008, he said that TNB has proven its resilience and service ethos in serving the nation by serving even in a decreased electricity demand.

“In line with the contraction in the GDP, electricity demand and sales in Peninsular Malaysia decreased last year.

“However, the group’s performance was still sufficiently robust to continue to honour its dividend policy of 30% to 60% payout based on our adjusted profit after tax, and minority interests,” he said.

For the financial year of 2020 (FY20), the group’s profit after tax stood at RM3.6 billion, lower than the RM4.45 billion recorded in the previous year.

The board has approved a final single-tier dividend of 18 sen per share, a special dividend of 40 sen per share on top of the interim dividend of 22 sen per share, which sums up to a total dividend of 80 sen per share, translating to RM4.56 billion payout.

Last year, the group achieved a system average interruption duration index (SAIDI) of 44.95 minutes per customer per year, versus the 48.13 minutes in 2019.

The SAIDI minutes improved to 0.0806 last year which is 70.2% better than the 0.2707 minutes in 2019.

Baharin said the company’s SAIDI performance in 2020 was at its best to date.

“The year 2020 represented the mid-point of our Reimagining TNB (2016-2025) strategic journey. With the acceleration of the energy transition globally, we studied how TNB can further strengthen our position within the future energy landscape and refreshed our strategy accordingly.

“In accordance with this renewed aspiration, our achievements so far prove our commitment towards becoming a leading provider of sustainable energy solutions,” he said.