PETALING JAYA: Tenaga Nasional Bhd
’s (TNB) wholly-owned United Kingdom subsidiary Vantage RE Ltd is expected to meet one-third of the group’s target renewable energy (RE) asset portfolio of 8.3 gigawatt (GW) by 2025.
According to Kenanga Research, Vantage RE is open to both greenfield and brownfield expansions focusing on offshore wind and battery energy storage.
“TNB started investing in the United Kingdom in 2017 and Vantage RE was set up in 2021 as a growth vehicle to drive sustainable growth in the United Kingdom and Europe’s RE markets via acquisitions of operating assets as well as those under development.
“Its current asset portfolio consists of solar farms, onshore and offshore wind farms, all in the United Kingdom,” said Kenanga Research, which recently held a virtual engagement session with Vantage RE.
It said the unit aims to expand its RE asset portfolio up to 2.5GW by end-2025 and is confident of achieving the target.
Currently, Vantage RE has 855 megawatt (MW) of operating assets comprising those under construction and secured development rights of certain projects.
“Offshore wind farms and battery energy storage are the key areas that will drive future growth. Due to the nature of the United Kingdom’s weather, an offshore wind farm (45%-60% efficiency) is able to generate six times more than a solar farm (11%-12% efficiency). Hence, battery energy storage is critical to stabilise the grid and the focus now is on co-location storage,” added the research firm.
It said Vantage RE prefers greenfield expansion due to the higher returns although it is also looking at brownfield projects, especially in new markets such as Ireland, France, Spain and possibly Italy.
In terms of financing, it sees good access, riding on TNB’s strong balance sheet and the keen interest from many Japanese banks in the United Kingdom that are aggressively funding RE projects.
The average cost of a solar farm, according to Kenanga Research, is £500,000 to £600,000 per MW.
