YTL Power International May Benefit From Review Of Current RE Export Ban, MIDF Says

MIDF Research stated the government’s plan to review the current renewable energy export (RE) ban is positive for YTL Power International Bhd, as it should pave the way for the group to participate in upcoming power import tenders by the Singaporean authority.

“The power export to Singapore could support investment and development of solar storages in Malaysia,” it said in a note on Friday (March 10).

According to the research firm, YTL Power has a strong advantage given that it is the only Malaysian company operating electricity generation and retailing in Singapore.

“Importantly, while the RFP [request for proposal] requires non-intermittent supply, the EMA [Singapore’s Energy Market Authority] acknowledges the cost of generation and storage technology for variable RE and is willing to consider lower load factor (versus requirement of 75%) in the initial years of supply,” MIDF said.

It has a ‘buy’ call for the stock, with an unchanged target price of RM1.12.

At the time of writing, shares of YTL Power  had fallen half a sen or 0.57% to 86.5 sen, giving it a market capitalisation of RM7.06 billion.

On Thursday, Minister of Natural Resources, Environment and Climate Change Nik Azmi Nik Ahmad said the government was reviewing the renewable energy export ban and a framework for third-party access to the national power grid would be introduced in the third quarter of this year.

To recap, in October 2021, its wholly-owned subsidiary YTL Power Seraya was appointed the electricity importer for a two-year trial period to import 100MW of electricity from Malaysia via existing interconnectors.

This follows an RFP process held in March 2021 by the EMA. Soon after however, a new ruling was put in place by the Malaysian government to ban RE exports to Singapore.

Nik Azmi said the ban, however, remains in place.

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