KUALA LUMPUR (Aug 21): The bidding round for four large-scale, grid-connected battery storage projects in Peninsular Malaysia has attracted significant interest, with more than 20 industry players submitting over 30 bids, according to sources.

The request for proposal, known as MyBeST, closed at the end of July. Some of the big players submitted multiple proposals, either through different subsidiaries or various consortium arrangements.

The MyBeST programme, which opened in May, aims to install four battery assets, each with a capacity of 100MW/400MWh. These batteries are designed to store solar-generated electricity during the day and release it back into the grid during periods of higher power demand.

Among those who have submitted bids are companies linked to key energy industry players like Tenaga Nasional Bhd (KL:TENAGA), YTL Power International Bhd (KL:YTLPOWR), and Malakoff Corp Bhd (KL:MALAKOF).

Other bidders include companies associated with Gamuda Bhd (KL:GAMUDA), which entered the renewable energy sector in 2022, Petronas' gas infrastructure unit Petronas Gas Bhd (KL:PETGAS) as well as the national oil and gas firm's clean energy division Gentari, and Mega First Corp Bhd (KL:MFCB), which is currently developing its first large-scale solar farm.

Tenaga is considered a front runner, as it has an ongoing project of similar capacity in Dungun, Terengganu.

Aside from the large-cap firms, other battery storage players have also submitted bids, such as BM Greentech Bhd (KL:BMGREEN).

Meanwhile, solar-heavy renewable energy players like Solarvest Holdings Bhd (KL:SLVEST) and Samaiden Group Bhd (KL:SAMAIDEN) are participating as engineering, procurement, construction, and commissioning (EPCC) partners for the project developers.

Another solar player, Pekat Group Bhd (KL:PEKAT), is also involved in the bid, while Seal Incorporated Bhd (KL:SEAL) whose associate developed Malaysia's first grid-scale battery storage project in Sabah is also said to be looking at EPCC opportunities in the space.

Winners are expected to be shortlisted as early as October, with full operation of the projects slated to begin by April 2027. The estimated cost for each project is between RM270 million and RM300 million, depending on the type of battery system used and construction costs, one source said.

According to the request for proposal or RFP document, the battery system must be operational for 15 years, starting no later than April 30, 2027. The batteries must maintain a state of health of at least 75% or a dispatchable energy level of 300MWh in their 15th year of operation. The capacity specifications mean each battery can discharge up to 100MW per hour, with a maximum discharge time of four hours.

The batteries must also be produced by manufacturers that meet BloombergNEF’s Tier 1 criteria, a bankability ranking for manufacturers of energy storage systems and solar modules that is used by developers and banks to assess the financial stability and credibility of manufacturers for large-scale projects, based on their project and financing track record, among others.

Unlike large-scale solar developments, where developers earn a fixed tariff based on the actual amount of electricity sold to the grid, battery energy storage system or BESS operators are expected to be paid based on both storage capacity, which is paid regardless of asset utilisation, and a service tariff, which is determined by the number of times the battery is actually used to store and supply energy to the grid.

“Basically, there are two fee structures, one on the capacity and the other on the service tariff. Both are included in the bidding price,” one source explained.

This model is similar to the conventional power purchase agreements or PPAs for fossil fuel power plants, which include both capacity payment for the plant’s available capacity, and energy payments for the actual energy generated.

The widespread implementation of grid-based battery storage comes at a crucial time as solar energy generation capacity is projected to increase by over 6GW (gigawatts) in the next few years from upcoming large-scale solar awards.

This is in addition to the more than 4GW of existing large-scale and rooftop solar capacity. Currently, the peninsula's solar generation peaks at around 3.78GW at noon, which accounts for nearly 18% of its peak demand of 21.05GW. This surge of solar power in the daytime often goes unused as there isn't sufficient battery storage available to keep it for release at night, when power demand is higher and can strain the grid.

Note: An earlier version of this article inaccurately stated that the bidding round is for Malaysia's first grid-scale battery storage projects. The error is regretted.

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