KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has announced plans to work with Petroliam Nasional Bhd (Petronas) to conduct feasibility studies on hydrogen and carbon capture in an effort to unlock RM10 billion in commercial value by 2035.
TNB president and CEO Baharin Din said the decarbonisation efforts would be achieved mainly through a collaborative study to develop a green hydrogen ecosystem and carbon capture and storage (CCS) technology, leveraging on both organisations’ technical expertise and resources.
In addition, the two companies will repower the retired combined-cycle gas-fired power plant, the Sultan Ismail Power Station (SIPS) in Paka, Terengganu by using gas with hydrogen-ready technology, Baharin said in a statement today.
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.
Baharin said the repowering of the plant will serve as a unique pioneering project in deploying green technologies that may be utilised in future power plants.
“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 added.
Upon commercial operation of the plant in 2030, the repowered Paka is projected to generate an average of RM250 million per year in earnings before interest and taxes.
“The repowering of Paka, with a capacity of 1,400 megawatts (MW), will prevent emission of the equivalent of 3.2 million tonnes of carbon dioxide per annum, which is the amount of CO2 emitted by approximately 700,000 cars each year,” said Baharin.
Both TNB and Petronas had signed a memorandum of understanding on Aug 19 to strengthen collaboration in driving innovative solutions toward decarbonisation in support of Malaysia’s aspiration to be a carbon-neutral nation by 2050.
Baharin said that by undertaking research and development on green hydrogen, TNB and Petronas hopes to reduce the levelised cost of electricity (LCOE) for green hydrogen that TNB can use as a fuel for future power generation with zero emissions.
LCOE is a measure of the average net present cost of electricity generation for a generator over its lifetime.
In addition, Baharin said TNB planned to venture into energy supply and hydrogen production along the green hydrogen value chain.