KUALA LUMPUR, Aug 8 — Maybank Investment Bank Bhd expects higher tariffs for 22 solar power producers (SPPs) selected under the Corporate Green Power Programme (CGPP) of between 24 and 28 sen per kilowatt-hour (kWh) compared with LSS4 of between 17 and 24 sen per kWh.
Individual tariffs for each SPP have yet to be disclosed.
It said in a note today that as a reference, the average system marginal price the price which a CGPP producer initially sells to a single buyer was at about 25 sen per kWh in June 2023.
“Given declining price trends for solar-related materials, we expect CGPP producers to enjoy reasonably healthy project returns.”
For the CGPP, the Energy Commission has selected 22 SPPs out of 71 applications, marking the start of a new order book replacement cycle, RM2 billion of works, for solar engineering, procurement, construction and commissioning players, with Solarvest, Sunview and Pekat among the selected solar producers.
Maybank Investment Bank has a ‘neutral’ call on Malaysia’s renewable energy sector with ‘hold’ ratings for both Cypark and Solarvest, and a ‘buy’ rating on Mega First with a target price of RM4.30.
Plant capacity ranges between 7 megawatts (MW) and 30 MW each, totalling 563 MW out of an 800 MW quota. The CGPP allows SPPs to enter into a virtual power purchase agreement with corporate consumers with varying tenures.
Applications for the CGPP will continue until end-2023, or until the quota is exhausted. construction of solar plants under the CGPP are required to be completed no later than end-2025.
“Assuming engineering, procurement, construction and commissioning works of RM3.6 million per MW, we estimate the 563 MW of awarded capacity could generate RM2 billion of E engineering, procurement, construction and commissioning works.
“This would provide opportunities for renewable energy players to replenish their solar engineering, procurement, construction and commissioning order books which we currently expect to exhaust by end-2023,” it said and noted that solar engineering, procurement, construction and commissioning players, including Solarvest, Cypark, Sunview, Pekat and Samaiden are not rated.
— Bernama
