The Ministry of Energy Transition and Water Transformation via Energy Commission (EC) is seeking proposals through a competitive bidding process to develop the 5th cycle of Large-Scale Solar (LSS5 or LSS PETRA) projects totalling 2GW in capacity.
Being positive of the Renewable Energy (RE) sector, Maybank Investment Bank (Maybank IB) today (Apr 4), said all LSS5 projects are scheduled to commence operations by 2026.
Among the RE pure-plays, Maybank IB has a BUY rating on Solarvest. In the broader utilities space, they have a BUY on Mega First (MFCB MK, CP: MYR4.35, TP: MYR4.70).
Potential EPCC contracts worth ~MYR7b
There are four packages available under LSS5 with project capacity ranging between 1MW-500MW each. Three out of the four packages are for rooftop or ground-mounted solar projects with an aggregate quota of 1.5GW. The 4th package is for floating solar projects with a total quota of 500MW.
The tender requires minimum Bumiputera or local Malaysian equity requirements to increase local participation in the RE industry.
Assuming EPCC works value of MYR3.6m per MW, we estimate the offered capacity is worth c.MYR7.2b in EPCC works.
Maybank IB expects the shortlisted bidders to be announced in 4Q24, after the deadline for proposals submission on 25 July 2024.
Additional solar quotas under NEM 3.0
YTD, the Government has announced an additional 300MW of solar quota under the Net Offset Virtual Aggregation (NOVA) programme for Commercial & Industrial users, and 200MW under the Net Energy Metering (NEM) Rakyat programme for Residential – both NOVA and NEM Rakyat are under the larger NEM 3.0 programme introduced in Dec 2020.
This brings total allocation quota for NEM 3.0 to 1.55GW, of which about 500MW remaining quota is available for application until end-2024 or until the quota has been fully allocated.
Busy year ahead for RE players
To-date, no EPCC contracts have been awarded from the 800MW of Corporate Green Power Programme (CGPP). We understand from industry players that the awards will be soon. The roll-out of LSS5, on-going NEM and CGPP will kept the RE players busy for the next 2-3 years.
Notable solar EPCC players include Solarvest, Cypark, Sunview (SUNVIEW MK, Not Rated), Pekat (PEKAT MK, Not Rated) and Samaiden (SAMAIDEN MK, Not Rated).
