KUALA LUMPUR: Malaysia has opened bids to undertake RM2 billion of solar projects this year, a move analysts said will open up more opportunities to power sector incumbents and new entrants.
The capacity to be tendered will be between one megawatt (MW) and 100MW, with a target aggregate capacity of 500MW in Peninsular Malaysia.
The projects are under the third round of the large-scale solar (LSS3) scheme to increase electricity generation from renewable energy, said Energy, Technology, Science, Climate Change and Environment Minister Yeo Bee Yin.
The government was expected to finalise the tenders by year-end, Yeo said.
She added that the competitive bidding process would be opened for six months until August.
“We will be awarding this bidding exercise for those who can give us the lowest price for the first 500MW, having passed all the financial requirement and technical qualifications,” she said at a press conference on LSS3 yesterday.
Contractors for engineering, construction and commissioning must be 100 per cent local, she added.
Analysts said the latest round of LSS projects would benefit the likes of Cypark Resources Bhd given its technical expertise and experience as a developer and operator of solar parks, and Mega First Corp Bhd.
“Mega First has voiced intentions of venturing into the renewable energy space after the successful operation of its Don Sahong hydropower plant in Vietnam,” Public Investment Bank Bhd said.
Other beneficiaries may be Malakoff Bhd, YTL International Power Bhd, Tenaga Nasional Bhd and Ranhill Holdings Bhd.
PublicInvest said the first two cycles of LSS projects had a total installed capacity of 958MW.
The firm noted that five projects with capacities of 131MW had reached their commercial operation status, with the remaining having a commission operation date in 2019-2020.
“Undoubtedly, this is a positive development considering the government’s plan to significantly increase the country’s electricity from renewable sources from the current two per cent of total generation mix.
“This will open up many more opportunities to incumbents and new entrants, with financial impact likely to be more noticeable on the smaller players,” PublicInvest said.
The government has set a target of 20 per cent of the country’s electricity to be generated from renewable sources by 2025. This means about 3,991MW of new energy capacity will be required for addition to the grid.
Other than LSS projects, the government also plans to increase electricity generation through the various other feed-in-tariff sources, namely biogas, biomass, geothermal mini-hydro as well as solar and net-energy-metering mechanisms.