KUALA LUMPUR (Jan 2): Malaysia’s renewable energy sector is set for a busy first quarter with a wave of solar project tenders to meet higher demand for power from mushrooming data centres, Kenanga Investment Bank said.
The government could roll out bids for the sixth round of Large Scale Solar (LSS6) programme that could potentially unlock construction jobs worth RM6 billion for capacity of up to two gigawatts, the research house said in a note and recommended that investors stay ‘overweight’ on the sector.
“We anticipate that LSS6 will come with requirements for battery, and together with battery installation” with an internal rate of returns of 8%-10% for developers, Kenanga said.
Malaysia’s national electric utility firm Tenaga Nasional Bhd (KL:TENAGA) has signed up 49 data centre projects that will require as much as seven gigawatts of power.
The Corporate Renewable Energy Supply Scheme (CRESS), launched by the government in 2024, allows operators of power-hungry data centres to buy green power directly from renewable energy developers.
“The off-take of CRESS to lock in long-term energy at competitive rates would be a compelling proposition for data centres which are typically ultra-high voltage customers,” Kenanga said, noting that committed value to CRESS has reached 1.3 gigawatts as of June 2025.
In the retail space, Kenanga expects the policy clarity surrounding the Solar Accelerated Transition Action Programme, or Solar ATAP, “to reinvigorate adoption momentum” as the scheme opens for applications from Jan 1.