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KUALA LUMPUR - Data centre investments are expected to provide a new avenue of growth for Tenaga Nasional Bhd (TNB), with electricity demand from the sector projected to exceed 8,000 megawatts (MW) by 2035, 30 per cent of total generation capacity in Malaysia.
However, TNB is expected to absorb an estimated RM120 million to RM150 million in fuel surcharge costs.
In a note, Kenanga Investment Bank Bhd (Kenanga IB) said it estimates that a total of 700MW of data centres are slated to come on stream this year.
"This should continue to drive demand growth higher, in turn improving the operational efficiency and boosting its non-regulated earnings,” it said.
Meanwhile, Kenanga IB remained cautious about TNB’s absorption of fuel surcharge costs following the government’s decision to raise the subsidised domestic electricity consumption threshold to 800 kilowatt-hours (kWh) per month from 600 kWh until end-2026.
It said the immediate financial impact was manageable, but the primary concern was potential regulatory lag if the full cost pass-through mechanism under Regulatory Period 4 (RP4) continued to face delays.
"We have factored in the RM150 million exemption impact into the fourth quarter of financial year 2026 (4Q FY2026), resulting in a two per cent reduction in our FY2026 net profit forecast, while keeping our FY2027 estimates unchanged.
"Our electricity demand growth assumptions for FY2026 and FY2027 also remain intact at five per cent and 3.5 per cent, respectively,” it said.
Kenanga IB maintained its "outperform” call on TNB, supported by the company’s long-term exposure to the growth of Malaysia’s data centre sector. - BERNAMA
