KUALA LUMPUR: The Corporate Renewable Energy Supply Scheme (CRESS) is a positive move as it reassures the government's commitment to its decarbonisation agenda, said CIMB Securities Sdn Bhd.
It said that CRESS would allow for increased competition, hence efficiencies among renewable energy (RE) generators, provide corporate consumers with more cost-effective and sustainable energy options, and as well as incentivise higher RE plant-ups pursuant to rising green energy demand.
"This would benefit renewable energy independent power producers (IPPs) under our coverage, such as Tenaga Nasional Bhd (TNB), YLT Power International Bhd, and Malakoff Corporation.
"We believe earnings impact to TNB's regulated business could be neutral, as any earnings loss from TNB's single buyer entity is likely to be offset by the potential wheeling charges for the use of Tenaga's transmission and distribution assets," it said in a note.
Under CRESS, eligible RE generators and corporate consumers can arrange for the direct supply of green electricity through the existing grid network under mutually agreed terms.
RE generators may supply electricity to corporate consumers through the New Enhanced Dispatch Arrangement (NEDA) market, ensuring competitive pricing and efficient grid management.
The programme, regulated by the Energy Commission and supported by the Single Buyer and Grid System Operator, aims to enhance corporate access to renewable energy, ensuring reliable and efficient delivery.
"This CRESS framework would eventually shift the future of RE development away from traditional Power Purchase Agreements (PPAs) to the CRESS programme.
"We are still awaiting more granular details over the next few weeks leading up to the implementation timeline in Sep 2024," it added.
The firm maintained "overweight" on the sector and favours TNB as it views the company as the prime beneficiary of Malaysia's decarbonisation agenda.