UOBKH Research expects five gigawatts (GW) of new plants by 2030 and another 10GW-15GW by 2040.
PETALING JAYA: UOB Kay Hian Research (UOBKH) Research believes the aggressive setting up of data centres in Malaysia and the country’s net-zero ambition offer ample opportunities for power players to expand their businesses.
“In essence, the potential power crunch arising from the data-centre boom implies the government may rethink its power supply plans, which we believe may lead to new power plants in Peninsular Malaysia,” the research house said.
The research house expects five gigawatts (GW) of new plants by 2030 and another 10GW-15GW by 2040.
“Key beneficiaries are engineering, procurement, construction and commissioning (EPCC) contractors with experience in building power plants,” UOBKH Research said.
The research house added that other beneficiaries include Tenaga Nasional Bhd
Power Generation Sdn Bhd (TNB Genco) and Malakoff Corp Bhd, as well as renewable-energy players.
UOBKH Research maintained a “market weight” call on the utilities sector with Malakoff and Pekat Group Bhd as its top picks.
“We highlight potential beneficiaries on three fronts: large to mid-cap EPCCs with experience in building power plants working alongside technology partners such as Alstom, General Electric; generating entities and independent power producers such as TNB Genco, Malakoff and unlisted Edra; and solar players such as Pekat, Solarvest Bhd, Samaiden Group Bhd and Sunview Group Bhd,” the research house said.
It added that, as Malaysia champions green initiatives, there will be opportunities for meaningful investments in large-scale solar as well as other biomass/biogas/waste-to-energy plants.
The National Energy Transition Roadmap has set an ambitious target for Malaysia to achieve net-zero emissions by 2050.
The plan is comprehensive and outlines a gradual increase in renewable-energy share, targeting 31% by 2025, 40% by 2035, and an impressive 70% by 2050.
“In the next one to two years, we expect 3GW of solar projects to be awarded through the Corporate Green Power Programme and fifth phase of the Large-Scale Solar scheme. Assuming a construction cost of RM2mil-RM2.5mil per megawatt, EPCC works are estimated at RM6bil-RM7bil over one to two years.
“This will boost the replenishment of the order books of existing renewable-energy players within the EPCC segment. Additionally, partial ownership of the solar farms will help lift recurring income for the EPCC players,” the research outfit added.
