[SINGAPORE] Sembcorp Industries is “well-positioned” to achieve its target of 25 gigawatts (GW) of gross installed renewables capacity by 2028, said the company’s chairman and chief executive in its FY2024 annual report.
The company’s gross renewables capacity stands at 17 GW as at February, “a notable increase from 12.9 GW a year ago”, said Sembcorp chairman Tow Heng Tan and chief executive Wong Kim Yin in the report, released on Tuesday (Apr 1).
“Looking ahead, renewables growth across South-east Asia, China, India and the Middle East is expected to remain robust,” they said, adding that the company will “maintain a disciplined approach to pursuing opportunities in these markets”.
His cash bonus for FY2024 fell to S$1.6 million, from S$2.5 million previously. The bonus is based on the achievement of key performance indicators such as net profit, return on equity and environment, social and governance factors.
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
Bet on renewables, energy imports
Sembcorp’s bullishness on renewables comes even as it faces headwinds in China, with higher rates of curtailment – a reduction in energy production or supply to balance out lower demand.
The curtailment was caused by a weaker macroeconomic outlook, as well as the country’s rapid expansion of renewables newbuild, which has outpaced the development of transmission infrastructure, said Wong and Tow.
“Despite these near-term headwinds, China’s renewables capacity is expected to grow, which is crucial to achieving the country’s emissions reduction targets,” they added.
Meanwhile, Sembcorp is seeing “strong momentum” in greenfield tenders in India’s renewables sector, securing more than 2 GW of hybrid renewable energy bids. The company also clinched its first energy storage project in India in FY2024.
“(Electricity) tariffs in India have improved, with our hybrid projects securing higher tariffs, underscoring our competitive edge,” said Wong and Tow.
Another milestone last year was the early completion of the Manah II Solar Independent Power Project in Oman. It marks Sembcorp’s first renewables project in the Middle East and is its largest utility-scale solar farm, with a peak capacity of 588 megawatts (MW).
The company is further growing its renewables footprint in South-east Asia. In January, it launched its first utility-scale integrated solar and energy storage project in Indonesia, the Nusantara Sembcorp Solar Energi Power Plant.
Sembcorp also signed a deal this year to acquire a 96 MW solar farm in the Philippines, marking its debut in the country’s renewables sector.
Beyond green energy, renewables import is another key focus. In December 2024, Sembcorp signed a two-year supply agreement with Tenaga Nasional to import 50 MW of renewable energy from peninsular Malaysia to Singapore. This is the first import with renewable energy certificates into Singapore.
Sembcorp is also exploring the import of electricity from Sarawak via subsea cables.
“By tapping into abundant low-carbon electricity from the region, we aim to promote the development of renewable energy in the region and contribute to realising the Asean power grid vision,” said Wong and Tow.
Gas resilience
Even as it focuses on the green business, Sembcorp is also seeing growth opportunities in gas. In November last year, it acquired a 30 per cent stake in Senoko Energy, one of Singapore’s largest electricity suppliers with 2.6 GW of registered gas-fired generation capacity.
“We believe this acquisition will enable us to further support Singapore’s energy transition,” said Wong and Tow.
On Apr 2, Sembcorp announced that it could further raise its interest in Senoko Energy to as much as 70 per cent.
In its annual report, Sembcorp noted that Senoko Energy’s assets are strategically situated in the northern region of Singapore’s grid, near energy-intensive sectors such as semiconductors. The site includes land available for the potential development of a new power plant.
Wong and Tow noted that Sembcorp’s gas business was resilient in 2024, despite a 34 per cent fall in Singapore wholesale electricity prices. The company expects the gas business’ earnings – before exceptional items – to be strong in 2025, driven by its contracted portfolio and contributions from its Senoko stake.
In Singapore, 80 per cent of Sembcorp’s gas-fired generation capacity is secured under contracts with energy-intensive industries, such as high-tech manufacturing and data centres. Sembcorp accounts for one-third of data centres’ power needs in the city-state.
Other moves
Separately, Sembcorp has cleared its portfolio of coal-fired power assets, with the divestment of its 49 per cent stake in Chongqing Songzao Electric Power.
Another divestment is the proposed sale of its waste management unit Sembcorp Environment for S$405 million.
Beyond energy, Sembcorp also aims to position itself as a leading low-carbon industrial park player in Asia with its urban solutions business.
The company aims to expand its land bank from 14,000 hectares (ha) to 18,000 ha by 2028, while scaling industrial properties from 100,000 square metres (sq m) to 1.5 million sq m.
“This growth will support increasing manufacturing demand, domestic consumption and the rise of e-commerce in South-east Asia,” said Wong and Tow.
