KUALA LUMPUR: Tenaga Nasional Bhd (TNB) will work with Petroliam Nasional Bhd (Petronas) on joint feasibility studies in the areas of hydrogen and carbon capture to unlock the commercial value of at least RM10 billion up to 2035.
TNB president and chief executive officer Datuk Indera Baharin Din said the studies formed part of the areas covered under a Memorandum of Understanding (MoU) inked by both companies on August 19.
The decarbonisation efforts will be achieved mainly through a collaborative study to develop a green hydrogen ecosystem and carbon capture and storage (CCS) technology, leveraging both organisations' technical expertise and resources.
In addition, the two companies will repower the retired combined-cycle gas-fired power plant in Paka, Terengganu known as the Sultan Ismail Power Station or SIPS, by using gas with hydrogen ready technology.
TNB will be investing RM6.3 billion in the repowering of SIPS using high-efficient combined cycle gas turbine (CCGT) with hydrogen-ready technology for cleaner energy production.
"This brownfield project will start with the demolition of the existing plant next year and this will take two years.
"Construction of the project will commence from 2025 and the entire complex is scheduled to be ready in 2030," he said in a statement.
Baharin said upon commercial operation of the plant in 2030, the repowered Paka was projected to generate an average of RM250 million per year in earnings before interest and taxes (EBIT).
"The repowering of Paka, with a capacity of 1,400 megawatts (MW) will avoid 3.2 million tonnes of carbon dioxide equivalent (tCO2e) emission per annum, which is equivalent to the CO2 emitted by about 700,000 cars each year."
Baharin added that Paka's transition to be hydrogen ready was a prime example of the company's commitment to a long-term investment to decarbonise its generation ecosystem and in creating ripple economic effects for better lives.
He noted that the repowering strategy of TNB's generation arm, TNB Power Generation Sdn Bhd (TNB Genco), hinged on the type of green technology and the expiration of power purchase agreements (PPAs) which were divided to before 2030 and after 2030.
"For PPAs expiring before 2030, TNB is phasing out its coal and gas plants and will repower to CCGT with the optionality of hydrogen co-firing and new green technology.
"For the group's power stations with PPAs expiring after 2030, these plants are in a better position for transitioning to new green technologies such as co-firing and carbon capture, utilisation and storage technology."