Latest news with #EPCC
The Star
20 hours ago
- Business
- The Star
RE sector buoyed by 48 new project approvals
The high adoption rate for NEM Rakyat was mainly bolstered by the Solar For Rakyat Incentive Scheme RM4,000 rebate. PETALING JAYA: UOB Kay Hian (UOBKH) Research has maintained its 'overweight' call on the renewable energy (RE) sector following the Energy Transition and Water Transformation Ministry's recent approval of 48 RE generation projects as part of its aggressive ramp-up to achieve a net-zero target. It noted that these projects fall under the feed-in tariff (FIT 2.0) programme. The FIT programme consists of 20 biogas projects totalling 31 megawatts (MW), eight biomass projects totalling 54MW, and 20 small hydropower projects totalling 96 MW. Under this scheme, the winning RE generators will export electricity to the national grid over a 21-year period at their respective approved tariff rates, ranging between 25 sen and 34 sen per kilowatt-hour (kW/h). 'Based on valuations from existing RE generation projects, the engineering, procurement, construction, and commissioning (EPCC) contracts for biomass power plants are typically valued between RM11.5mil and RM13mil per MW, while EPCC contracts for small hydropower projects range from RM6mil to RM13mil per MW,' UOBKH Research said. It noted that the net energy metering (NEM) 3.0 programme, which officially ended on June 30, had a take-up rate of 94% for the NEM Rakyat (residential), 80% for NEM government ministries and entities and 71% for NEM net offset virtual aggregation (commercial and industrial). The high adoption rate for NEM Rakyat was mainly bolstered by the Solar For Rakyat Incentive Scheme RM4,000 rebate, which assisted consumers in reducing their payback period by half a year (normal payback period: four to five years). 'We expect to see healthy revenue growth in the second quarter of 2025, contributed by the acceleration of solar projects, especially among commercial and industrial customers as they seek to mitigate the impact of the revised tariff structure.' It also expects the total solar photovoltaic (PV) capacity to exceed 6.5 gigawatts over 2025 to 2026 as the government calls for tenders on large-scale solar programmes. Assuming a construction cost of RM2mil to RM2.5mil per MW, total EPCC replenishment opportunities are estimated at a staggering RM13bil to RM16bil in the next five years, the research house said. It noted that EPCC margins for these projects are anticipated to be better, given the recent decline in PV panel prices. 'We reiterate 'overweight' on the sector.'
Borneo Post
2 days ago
- Business
- Borneo Post
Cahya Mata's growth outlook cemented with RM673 mln Clinker Line 2 project
Representatives from Cahya Mata Cement and Sinoma Industry Engineering during the signing of the memorandum to kickstart the new clinker production line at Mambong Integrated Plant in Kuching. KUCHING (July 23): Cahya Mata Sarawak Bhd's (Cahya Mata) long-term growth outlook will be cemented with its upcoming RM673 million Clinker line 2 project which is expected to create 500 jobs at peak construction and generate spillover benefits for local businesses. The project was officially greenlit on July 21 when it was announced that Cahya Mata had officially awarded a RM673 million engineering, procurement, construction, and commissioning (EPCC) contract to Sinoma Industry Engineering (M) Sdn Bhd (Sinoma) for the construction of the Clinker line 2 at its Mambong Integrated Plant in Kuching. Sinoma's parent company is China-based Tianjin Cement Industry Design and Research Institute who was the EPCC contractor of Cahya Mata's existing Clinker Line 1. The project is slated to commence construction in August and fully commissioned by June, 2027. According to the research arm of MBSB Investment Bank Bhd (MBSB Research), the addition of Cahya Mata's Clinker line 2 which has a capacity of 1.9 million tonnes per annum will more than double their existing clinker capacity of 900,000 tonnes per annum. This boost in production is expected to help Cahya Mata to eliminate their clinker imports which current make up circa 50 per cent of their requirements. MBSB Research guides that this will not only drive structural cost savings but improve ESG performance over the medium-term. 'The facility will feature state-of-the-art technologies to improve environmental performance and energy efficiency, including a waste heat recovery system capable of generating up to 6MW of power and an advanced dust filtration system designed to reduce dust emissions to more than half of the current regulatory limit. 'The Clinker Line 2 will also employ high-efficiency equipment to reduce energy use and carbon dioxide emissions, while incorporating locally sourced alternative raw materials and fuels to further limit reliance on fossil fuels,' they shared. At peak construction, the mega project is also expected to create up to 500 jobs and generate spillover benefits for local businesses, particularly those in the Padawan and Kuching areas. The development of Cahya Mata's Clinker Line 2 is also timely given Sarawak's accelerating cement requirements stemming from upcoming mega-project such as the Sarawak-Sabah Link Road Phase 2, Trans Borneo Highway, and petrochemical-related developments in Bintulu and Samalaju. 'In this context, the strategic timing of Clinker Line 2 affirms its commitment to future-proofing its capacity while supporting the state's industrialisation drive,' the research arm opined.
The Star
3 days ago
- Business
- The Star
Govt policy boosts Samaiden's transition to RE asset owner
PETALING JAYA: Samaiden Group Bhd 's renewable-energy (RE) ambitions have received a timely boost following its latest success under Malaysia's Feed-in Tariff (FiT) 2.0 programme, with RHB Research reiterating its 'buy' call on the stock, keeping to a target price of RM1.44. The award of three new bioenergy assets – two biomass and one biogas plants – signals continued momentum in Samaiden's transition from an engineering, procurement, construction and commissioning (EPCC) contractor to an RE asset owner. 'We reiterate our positive stance on Samaiden's outlook following its latest win, which reinforces the group's strong position in the RE space,' said the research house. The new plants, awarded to Samaiden's subsidiaries Legasi Green Resources Sdn Bhd (88%-owned), Sumas Energy Sdn Bhd (51%) and SC Green Solutions Sdn Bhd (100%), collectively adds 18MW of installed capacity to the group's portfolio. They will be developed under a 21-year power purchase agreement (PPA), with the FiT 2.0 scheme offering a fixed tariff for the first 10 years, and a bidding-based mechanism thereafter. 'These assets further strengthen Samaiden's diversified RE portfolio – spanning solar, biogas, and biomass – and underscore its growing role in driving Malaysia's clean-energy transition,' said RHB Research in a note to clients yesterday. While earnings estimates remain unchanged for now, back-of-envelope calculations by RHB Research suggest the trio of plants could add around RM11mil to annual earnings, based on effective equity stakes. 'Management is guiding for a high single-digit to low double-digit internal rate of return (IRR),' said the research house, adding that capital expenditure for the plants is generally estimated at RM10mil to RM12mil per megawatt. The facilities are expected to be running by 2028. In addition to its asset-building plans, Samaiden also stands to benefit from EPCC contracts related to other shortlisted FiT 2.0 projects, with RHB Research noting potential upside to its valuation as contributions from these new bioenergy projects and Samaiden's large scale solar 5 (LSS5) asset are not yet included in the research house's base case. Seeing potential upside to its valuation of the stock, which had risen 24.8% in the last month, RHB Research is forecasting recurring net profit for Samaiden to rise 24.2% for its financial year ended June 2025 (FY25) and 41.6% in FY26.
Focus Malaysia
7 days ago
- Business
- Focus Malaysia
Renewable energy sector rides high on structural growth, policy support
AFTER a strong CGPP award cycle in late calendar year 2024 (CY24), which lifted Hong Leong Investment Bank (HLIB) 's aggregate coverage orderbooks to RM1.4 bil. The ongoing awards of LSS5 EPCC contracts has further lifted aggregate coverage orderbook to RM1.65 bil. 'As we had earlier highlighted, EPCC contract conversion for the LSS programme is seen to be significantly quicker than the CGPP programme leading to faster orderbook replenishment,' said HLIB regarding the renewable energy sector. Meanwhile, continued robust take-up in the recently expired Net Energy Metering 3.0 (NEM 3.0) programmes help to sustain higher margin C&I project flows in respective orderbooks of solar players. The SELCO programme will provide C&I players with an avenue to reduce electricity costs for the remainder of CY25. We reckon the sector will continue to benefit from the pipeline of large scale of RE programmes like LSS5, LSS5+ (2GW), MyBeST and LSS6. We are estimating that potential EPCC value of RM10-15 bil assuming that LSS6 is 2GW. Note that there is upside to such estimates since LSS6 could feature BESS integration. The slew of programme rollouts is expected to grow orderbooks in the RE segment over the next 12 months. Adding to this, there is also 190MW FiT small hydro and bioenergy bids to be called later of the year and could translate into EPCC contracts for bioenergy players. To this end, we view Solarvest's target of hitting RM2 bil orderbook in FY03/26 as a conservative target; the company has consistently secured 30-40% share of large scale solar programmes. The solar module market remains sluggish with average selling price ( ASP)s languishing sideways at ~USD9 cents/Watt, staying weak due to oversupply conditions. We attribute such accommodative costs as key to rapidly declining LSS bid tariffs, estimated at an average of -22% since LSS4. Modules prices are expected to stay weak on the back of excess manufacturing capacity. Along similar lines, BESS systems are also experiencing downward trending price per MWh, declining by -20% over the past year. This enhances economics of BESS integrated solar deployments. Prevailing cost dynamics are strategic for government's pursuit of NETR goals. We make no changes to our overweight sector rating. We like the sector riding on strong structural themes as well as positive earnings growth cycle. Key catalysts include contract rollout, CRESS, fresh RE quotas and export news flow. Risks: execution, slower-than-expected DC builds and cost pressure. —July 18, 2025 Main image: Getty Images
New Straits Times
7 days ago
- Business
- New Straits Times
RE sector gains momentum with up to RM15bil in EPCC bids ahead
KUALA LUMPUR: The renewable energy (RE) sector is expected to continue gaining traction, supported by the pipeline of large-scale RE programmes such as the remainder of the fifth large-scale solar (LSS5) programme, LSS5+, MyBeST and LSS6, for which bids are expected to be called soon. Hong Leong Investment Bank (HLIB) said the potential value of engineering, procurement, construction and commissioning (EPCC) contracts from these programmes could reach between RM10 billion and RM15 billion. It added that there is upside to such estimates since LSS6 could feature battery energy storage system (BESS) integration. "The slew of programme rollouts is expected to grow order books in the RE segment over the next 12 months. "Adding to this, there are also 190 megawatt (MW) FiT small hydro and bioenergy bids to be called later in the year and could translate into EPCC contracts for bioenergy players," it added. HLIB said it considers Solarvest's goal of achieving an RM2 billion order book by financial year 2026 to be conservative, given the company's consistent track record of securing 30 to 40 per cent of large-scale solar projects. HLIB noted that the Corporate Renewable Energy Supply Scheme (CRESS) has experienced relatively modest uptake since its launch in the third quarter of financial year 2024, primarily due to the high system access charge (SAC), which ranges between 25 to 45 sen per kilowatt hour (/KWh). It said only two major sign-ups were recorded during this period: Bridge Data Centres with 400 MW and DayOne with 500 MW. However, recent electricity tariff hikes under Regulatory Period Four (RP4) could drive stronger interest. It said data centres, now classified as Ultra High Voltage time-of-use customers, are expected to face a 14 per cent increase in electricity costs compared to RP3, or around 60 sen per kilowatt hour, according to Tenaga Nasional Bhd. "More importantly, under a pure solar plant scenario and assuming LSS5+ bid tariffs, PPA tariffs of 58-60 sen/KWh enhance programme viability. "Through CRESS, data centre off-takers will receive green energy attributes and predictable costs. "We reckon that under such scenarios, solar plus BESS could see even faster adoption," it said. HLIB anticipates a significant market opportunity, citing total signed Electricity Supply Agreements amounting to 6.4 gigawatts, compared to a relatively low data centre load utilisation of just 484 MW in the first quarter of 2025. The research house expects interest to pick up further once adjustments are made to how capacity and network charges are treated.
