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Part 1: TNB Builds on UK Experience With Global Renewable Energy Vision

2020 was a blockbuster year for renewable energy in the UK. Energy agency the National Grid revealed that it was the greenest year on record for the nation, with record highs in renewable energy generation and lows in carbon output from the power sector.

Solar power reached its highest level of generation, contributing over a third (34%) of electricity at its peak. Wind power also reached a record peak, generating 17.2GW of energy, and accounting for a breezy 59.9% of total power generation at one point during the year.

These record highs reflect a national landscape that has reduced the carbon burden of its power sector by 66% over the last seven years, with the goal of achieving net-zero by 2050.

Malaysian utility TNB has been a longstanding partner in the UK’s energy sector, having invested heavily in solar and wind capabilities in the country. It has been an integral player in the UK’s clean power transformation, offering a fascinating insight on the journey towards net-zero emission.

TNB’s international approach to energy

TNB’s International Asset Group (IAG) is the international business arm of Malaysia’s national utility company. It is designed to leverage an increasingly connected global marketplace, focusing on a diversified global portfolio.

“Currently, we are present in 5 markets — India, Pakistan, Saudi Arabia, Turkey, and the UK,” said Shahazwan Harris, Chief International Officer of TNB’s International Asset Group, speaking to Energy Watch recently. “We recently announced two new international markets for TNB — Vietnam and Singapore. Our international strategy focuses on growth in two regions of the UK/Europe and Southeast Asia.

“For the UK and Europe, we will be focused on growing our renewable energy business”

“For the UK and Europe, we will be focused on growing our renewable energy business, whilst in Southeast Asia, we will grow TNB’s utility business in each market, leveraging our strengths and capabilities from our Malaysian home base, but customising them for each market.”

TNB’s footprint in the UK was first established in 2017, investing in a 50% share, later expanded to 55%, of solar power company Vortex Solar. In 2018, this portfolio expanded with the purchase of two further companies, GVO Wind Ltd and Bluemerang Capital Ltd, which are now operated under Tenaga Wind Ventures (TWV) UK Ltd. Together, these assets represent almost 400MW of installed power generation.

Vortex Solar is one of the largest solar platforms in the UK, with an accredited Renewables Obligation Certificate (ROC) which enables it to participate in the power market. It is currently comprised of 24 operational solar farms, with a total combined capacity of 365MW.

IAG acquired its first 50% stake of Vortex Solar in 2017. In September 2020, it acquired an additional 5% stake, giving the company a majority equity interest in one of the largest UK solar platforms.

“This acquisition marked a key milestone in our commitment to reduce our carbon footprint and grow TNB’s international renewable energy business portfolio. This move is also in line with TNB’s energy transition aspiration of becoming the leading provider of sustainable energy solutions both domestically and internationally,” said Shahazwan Harris.

The company not only benefits from a substantial existing footprint, but security of an ROC agreement tied for the next 20 years, ensuring Vortex Solar will remain a critical part of the UK’s green energy foundation.

Having successfully acquired and operated Vortex Solar since 2017, TNB’s international footprint was further diversified into the UK’s wind power sector in 2020. In March of that year, wholly-owned subsidiary Tenaga Wind Ventures (TWV) UK Ltd completed acquisition of 100% interest in two UK renewable energy companies, GVO Wind Ltd and Bluemerang Capital Ltd.

These two companies combined offer the largest Feed-in-Tariff (FiT) wind portfolio in the UK

These two companies combined offer the largest Feed-in-Tariff (FiT) wind portfolio in the UK, comprised of 53 operational onshore medium wind turbines with a total combined capacity of 26.1MW.

The portfolio is supported by a 20-year UK government-backed FiT renewable support mechanism and offers attractive financial returns with steady earnings growth from the date of acquisition.

“TNB has the resources and expertise to expand on these assets, building our experience in the UK market over time,” said Shahazwan Harris. “These renewable assets form an important part of our renewables growth platform and offer a pathway to acquire more assets in the UK and Europe.”

Inspiring a renewable revolution

TNB’s growing international renewable energy footprint is now a core part of the company’s operating ambitions, with the company aiming to deliver 8,300MW of installed renewable energy capacity by 2025. That marks a significant shift in green energy ambitions, up from a previous target of 1,700MW.

“As a utility company, TNB has the resources and expertise to successfully operate these assets,” said Shahazwan Harris. “TNB has enjoyed more than three years in the UK market, providing valuable experience and learning.”

TNB aims to integrate these assets into a focused growth platform, currently coined as the Renewable Asset Company (RACo). This will form the foundation for wider asset acquisition ambitions in future, benefiting from the experience operating in a renewable energy market like the UK, which has undergone significant transformation over recent years.

“TNB strongly believes that our international business has huge growth potential and resilience as the world shifts to more sustainable energy sources with steady yield and lower financing cost. We will continue to grow TNB’s renewable energy portfolio in our focus markets, leveraging on our existing assets, experience, and capabilities,” said Shahazwan Harris.

In part two of our series we’ll explore on the opportunities unlocked by the UK energy market’s green transition, and look into how Malaysian utility TNB has leveraged this transition to drive business growth.

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