RE sector gains momentum with up to RM15bil in EPCC bids ahead
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.
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