KUALA LUMPUR: Following some recent signings, more large scale solar (LSS) engineering, procurement, construction and commissioning (EPCC) contracts are expected to be handed out in the coming months amid onging discussions with shortlisted bidders.

       Tenaga Nasional Bhd recently signed 21-year LSS photovoltaic power purchase agreements (PPA) with most of the shortlisted public listed players, but RHB Research expects to see further contract flow over the immediate term.

       "Apart from Solarvest, players including Samaiden, Pekat and Uzma are also eyeing for a share of the pie," it said in a note on Wednesday.

       However, RHB noted that solar panel prices remain fairly elevated at 28-29 US cents per watt, which represents a huge increase from 20-21 cents per watt during June 2020's LSS4 tender period.

       While the negotiations will dictate how the impact of the prices will be shared between the stakeholders, EPCC contractors with bulk orders tend to enjoy better economies of scale while asset owners with internal EPCC capabilities have better cost management, it said.

       "Some players have a wait-and-see approach as they believe solar panel prices will cool off," it added.

       Meanwhile, RHB believes Tenaga's coal capacity target is achievable as the energy producer works towards achieving net zero emissions and weans itself off coal by 2050.

       Tenaga's interim target is to reduce emission intensity by 35% and coal capacity by 50% by 2035.

       "Assuming no new coal capacity additions, and based on the current plant retirement schedule, TNB’s coal capacity (excluding JV& associates) will be reduced by 48% by 2030, and all its coal plants will be fully retired by 2045 when the current power purchase agreements (PPAs) are honoured," said RHB.

       Apart from expanding its renewable energy (RE) footprint, Tenaga will also accelerate investments into emerging green technologies (eg green hydrogen, carbon capture and utilisation (CCU)) to achieve its carbon neutrality goals, it noted.

       RHB has maintained its "overweight" recommendation on the power sector with four "buy" ratings and two "neutral".