PETALING JAYA, Tenaga Nasional Bhd (TNB) is set to deepen its presence in Australia’s renewable energy (RE) sector, securing a foothold in one of the world’s fastest-moving energy transition markets.
The expansion aligns TNB with Australia’s goal to lift RE’s share of its national energy mix to 82% by 2030, from about 39% currently. TA Research, which recently visited TNB’s Australian operations under Spark Renewables Pty Ltd, expressed confidence in the move, noting that Spark offers TNB a strategic platform to tap into the country’s aggressive clean energy push.
TA Research said it is positive on TNB’s expansion into the Australian energy market.
TNB acquired Spark in 2023, adding the 120MW Bomen Solar Farm in Wagga Wagga, New South Wales, to its portfolio, along with a growing pipeline of greenfield projects. This approach marks a strategic shift away from buying fully operational assets towards developing projects from the ground up, which could deliver higher long-term returns.
Spark complements TNB’s other New Energy Division units — Vantage RE, operating in the UK and Ireland, and TNB Renewables Sdn Bhd, which manages the domestic RE portfolio — as part of the group’s goal to achieve 14.3GW of RE capacity by 2050.
Australia’s accelerated coal exit — with 90% of its 21GW coal capacity set to retire by 2035 — will require massive new solar, wind and storage capacity, plus 4,000km of extra transmission lines over the next decade. TNB’s involvement positions it to benefit from this transformation while gaining insights that could guide Malaysia’s own energy transition.
However, TA Research noted that Spark’s near-term earnings contribution will be relatively minor compared to TNB’s large domestic revenue base. The firm maintained its ‘buy’ call on TNB with a DCF-derived target price of RM17.30, despite the ongoing additional tax assessment by the Inland Revenue Board.
It also highlighted that a recent Federal Court decision on a 2018 tax case means nearly 70,000 project resubmissions will be reviewed by the Finance Ministry, with the potential to offset TNB’s RM7.2 billion tax liability in the best-case scenario.
