VSolar to focus on RE business, expects 10MW biogas energy to contribute in late 2019
VSolar Group Bhd which recently scrapped a plan to build a solar power generation plan with Universiti Teknologi Malaysia (UTM), citing the poor rates of return, is planning to stop its solar business and concentrate on its renewable energy (RE) business
VSolar Group Bhd which recently scrapped a plan to build a solar power generation plan with Universiti Teknologi Malaysia (UTM), citing the poor rates of return, is planning to stop its solar business and concentrate on its renewable energy (RE) business.
Its group executive director Edward Leung Kok Keong said the group currently still has its 1MW generating solar power plant in Simpang Pulai, Perak and would stop at that.
“We are stopping at that (the 1MW solar power plant in Simpang Pulai) because our financial assessment indicated that the payback period is too long and the financials does not make sense.
“So we are staying away from solar and we are now looking at another alternative which is RE technology that we could invest in, because the financials make sense,” he told reporters after the group’s extraordinary general meeting today.
VSolar expects its 10MW biomass/biogas energy generation plant, which it has entered into a joint venture with a Singapore firm KRU Energy Asia Pte Ltd, Rangkaian Iltizam Sdn Bhd which is KRU’s subsidiary, and a local citizen Kenneth Lee Wai Tong in August last year, to start contributing to the group’s revenue in late 2019.
Leung said VSolar has submitted its application to the Sustainable Energy Development Authority Malaysia (SEDA) and is now waiting for approval before the group can kick-start the project.
“We will kick-start our project only upon SEDA approval. The application had already been made and is currently being accessed by SEDA.
“Barring any unforeseen circumstances, we are giving an indication that it (the approval from SEDA) may come before our general election, hopefully, it does. If it doesn’t, then it should be after the election,” Leung said, adding VSolar is targeting to deploy 2MW in stages.
“In the circular, it is up 10MW but deploying 10MW is too big at this stage and we would probably scale it down to about 5MW or 6MW and roll it out in stages,” Leung added.
VSolar said the project would take up 18-months from SEDA approval in order to complete.
KRU will provide expertise in supplying all major equipment and engineering to the project, according to the ACE Market-listed VSolar.
At the same time, VSolar expects to sign an RE power purchase agreement with Tenaga Nasional Bhd within a month after obtaining SEDA’s approval.
Looking ahead, Leung said Vsolar should see a boost in its revenue — once its 10MW biomass/biogas energy plant commence commercial operation — to overwhelm its trading in the information technology products (IT) segment.
At midday break, VSolar’s shares remained unchanged at 13.5 sen, giving it a market capitalisation of RM52.12 million.