TENAGA Nasional Bhd (TNB) targets to invest around RM20 billion per year over the next 28 years as capital expenditure (capex) for initiatives to fast-track TNB’s energy transition plan that aspires to reduce its emissions intensity to net zero by 2050.
The investment will pave the way for the utility company’s journey towards its net zero aspiration and enhancing its profitability, TNB president and CEO Datuk Baharin Din told a forum in Kuala Lumpur yesterday.
“This Responsible Energy Transition (ET) journey will bring positive business growth to the group, even as we accelerate our efforts to decarbonise,” he was quoted in a statement released today.
The one-day event was attended by the senior leaders of TNB’s major shareholders including Khazanah Nasional Bhd, Employees Provident Fund, Permodalan Nasional Bhd, Retirement Fund Inc and Social Security Organisation, as well as fund managers and analysts.
It held to shed more details on TNB’s initiatives to fast-track the pursuit of its sustainability aspiration.
Earlier this month, TNB announced initiatives to accelerate its sustainability agenda (initially announced in August last year) and shared progress on its ET plan.
Baharin told the forum that as TNB continues to invest in the Grid of the Future, the company will grow its regulated asset base to RM100 billion by 2050.
“We will pursue Regional Interconnection that will allow for a wider reallocation of renewable energy resources that will help decarbonise the Asean power system, as well as strengthen the security of supply. The grid will provide the group with potential earnings of RM7 billion by 2050,” he said.
With a strong, interconnected and resilient Asean Power Grid, the statement noted that Asean countries can transfer energy from areas with abundant energy generation at a time when other parts face a shortage. This would enable the region to integrate different sources of renewable energy (RE) with complementary supply profiles, facilitating the decarbonisation of Asean power systems.
Malaysia’s significant RE potential capacity can provide a pathway for wider economic benefits, allowing it to export excess RE to its regional neighbours in times of surplus, the statement added.
Baharin said apart from the national grid, TNB is taking three other initiatives to fast-track its sustainability agenda, involving its wholly owned TNB Power Generation Sdn Bhd (TNB Genco), TNB’s new energy division (NED), and electric vehicles (EVs) under its project management office.
On TNB Genco, he said the acceleration of TNB’s decarbonisation plan will increase the enterprise value of TNB Genco for the possibility of an IPO.
TNB Genco aims to capture an estimated RM40 billion in revenue from the domestic generation market by 2050. In addition, TNB is exploring gas and hydropower projects in Asean with a target share of approximately 800MW capacity by 2050.
In expanding its RE portfolio, NED is targeting 14.3GW capacity by 2050 with an estimated equity investment of US$7 billion (RM31.22 billion), the statement said.
NED’s strategy is to increase investments in large-scale solar, as well as the onshore and offshore wind with a focus on existing markets in Malaysia and the UK, and new markets in Spain, Ireland, France, Thailand, the Philippines, Vietnam, Australia, Taiwan and Korea.
Baharin added that on EVs, TNB’s focus is to develop the EV ecosystem as part of efforts to bring consumers along the energy transition journey.
“We are committing to invest RM90 million over the next three years in order to spur the adoption of EVs, reaching 500,000 cars by 2030 that will contribute RM1.25 billion in annual electricity revenue,” he said. — TMR/ Pic courtesy of TNB