PETALING JAYA: Tenaga Nasional Bhd (TNB) will invest RM20 billion per year over the next 28 years as capital expenditure for initiatives to fast-track TNB’s Energy Transition Plan to reduce its emissions intensity to net zero by 2050.
TNB president and CEO Datuk Indera Baharin Din said the investment will pave the way for TNB’s journey towards its net zero aspiration and will open opportunities in more than doubling its earnings before interest and tax.
“This responsible energy transition journey will bring positive business growth to the group, even as we accelerate our efforts to decarbonise,” he said in a statement today.
Baharin said TNB continues to invest in the grid of the future, and 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 added.
Asean countries can transfer energy from areas with abundant energy generation at a time when other parts face a shortage with an interconnected and resilient Asean power grid. 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.
Baharin also said TNB is accelerating its sustainability agenda and this requires the group to undertake major shifts across the value chain in meeting its environmental, social and governance commitment while ensuring sustainable business growth.
“Backed by a stable domestic market, our Energy Transition aspiration will provide us with the added capabilities, technologies and capital that are vital for a sustainable future. Our fast-tracked initiatives along this transition are driven by a deep sense of responsibility given TNB’s footprint in the country’s energy landscape, as well as a sense of urgency to ensure the sustainability of our business.”
Baharin disclosed that apart from the National Grid, TNB is taking three other initiatives to fast track its sustainability agenda. These involve its wholly-owned TNB Power Generation Sdn Bhd (TNB Genco), TNB’s new energy division (NED), and electric vehicles (EV) under its project management office.
On TNB Genco, he said the acceleration of TNB’s decarbonisation plan will increase the enterprise value of Genco for the possibility of an initial public offering. 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 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. 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, Philippines, Vietnam, Australia, Taiwan and Korea.
Baharin added that on EV, TNB’s focus is on developing 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 EV, reaching 500,000 cars by 2030 that will contribute RM1.25 billion in annual electricity revenue. “