Out-Law News | 17 Mar 2021 | 2:28 am | 1 min. read
Malaysia’s Energy Commission has announced the shortlisted bidders after it made a request for proposals for 1 gigawatt (GW) of solar projects in the fourth round of its large-scale solar (LSS) programme.
The authority pre-selected 30 bidders in two categories. The 30 bidders have a total of 823 megawatts (MW) of generating capacity.
The first category includes 20 projects in the 10MW to 30MW category. The total shortlisted capacity is 323.06MW at prices ranging from MYR0.1850/kWh ($0.046/kWh) to MYR 0.2481/kWh($0.0603/kWh).
The second category includes 10 projects with capacities between 30MW and 50MW and a total proposed capacity of 500MW. The bids ranged from MYR 0.1768/kWh ($0.0429/kWh) to MYR 0.1970/kWh($0.0478/kWh).
John Yeap of Pinsent Masons, the law firm of Out-Law, said: “The results of this fourth round solicitation indicates the robustness of Malaysia’s large solar programme. The power purchase agreement (PPA) is largely in line with similar well-structured energy only build-own-operate (BOO) structures in other countries, with a balance of risks that is understood and acceptable to both the equity and debt markets.”
“It is however largely a domestic play given the requirement for at least 51% local ownership. In any event, the energy tariff structure, which includes the shallow connection costs, mean the bidding would always favour a player with a good and varied land bank and therefore the ability to limit connection costs or have access to several nodal points, which will unlikely to be a foreign company. With the recent announcement by Singapore to pilot the import of RE generation from Malaysia, LSS in the country could in the future also have a role to play in the island state’s Corporate PPA market,” he said.
The solar plants in this round are expected to start operation no later than 31 December 2023 in a term of 21 years, it is reported.
The bidding was open in May 2020, it is the largest capacity offered under the LLS programme that was launched in 2016.