KUCHING: The government’s announcement of its plans to carry out an open tender next year for the third round of the 500MW large-scale solar projects met with positive sentiments from analysts as these projects are expected to benefit several power companies.
According to news reports, the government has set a 20 per cent renewable energy target in electricity generation by 2025, excluding power generated from large hydropower generators of more than 100MW. In order to achieve this 20 per cent target, the government plans to undertake an open tender for the third round of the large scale solar (LSS) project, offering a total capacity of 500MW.
The estimated value of the third LSS project is RM2 billion and details of the project are expected to be announced by January 2019.
“This is positive for the power companies. While the government has cancelled four IPP projects, it is also opening up the solar side via an open tender. We believe that Malakoff and Tenaga Nasional would be bidding for the power projects,” the research team at AmInvestment Bank Bhd (AmInvestment) opined.
“We reckon that some of the criteria which the government would be looking at are the cost of the project and whether or not, the bidders have the balance sheet to secure funding.
“We do not know if companies would be allowed to bid for more than one power plant. The size of the solar power plants is expected to range from the smallest size of 3MW to the largest 50MW,” it explained.
Nevertheless, it highlighted that the issues with solar power plants are costs and scalability.
“According to an industry player, the cost of solar is about RM0.40/kWH compared with less than RM0.30/KwH for coal,” it noted.
However, it pointed out that currently, the feed-in tariff for solar power plants is being subsidised by the Renewable Energy Fund.