Yinson Annual Report 2021

66 YINSON HOLDINGS BERHAD SECTION 03 : EXTERNAL ENVIRONMENT RENEWABLE ENERGY MARKET OVERVIEW RISKS OPPORTUNITIES YINSON’S STRATEGIC RESPONSE IMPACT t 5IF 1BSJT "HSFFNFOU has driven many countries to set harder targets for implementing alternative and renewable energy sources to replace fossil- based sources. Earlier initiatives had built a strong platform for renewables to become a viable and cost- effective alternative. t 5PUBM MJGFDZDMF DPTUT PG renewable generation in many economies are falling below the base operations costs of fossil energy sources, positioning renewables as the generation source of choice. t (PWFSONFOUT BSF increasingly focused on green economy investments as a means to revitalise infrastructure investment following the economic downturn caused by the pandemic. t *ODSFBTFE DPNQFUJUJPO as more investors and corporations move into the renewables segment. t -PX DPTU DBQJUBM investors searching for stable yields drive down margins. t 5IF JOUFSNJUUFOU nature of renewable energy generation, when combined with an increased share of energy supply coming from these sources, can lead to renewable assets being exposed to curtailment risk or lower captured power prices in some markets. t 3FOFXBCMFT BSF TUJMM early on the growth ‘S-curve’ with significant expansion anticipated. t *OWFTUNFOUT BSF underpinned by strong government policies, international agreements and public opinion. t *ODSFBTFE BWBJMBCJMJUZ of low-cost capital drives opportunities for co-investment and/ or capital recycling. t *ODSFBTJOH OVNCFST PG risk averse renewables investors, who are seeking stable yield, opens the field up for players with capability to manage development and construction risk. t :JOTPO IBT FTUBCMJTIFE its renewables footprint through investments and new projects in India, one of the global leaders in renewable energy growth. Simultaneously, we keep a strong focus on developing a diversified portfolio in a few selected core markets. t $BSFGVM NBSLFU TFMFDUJPO is based on growth potential, governmental and regulatory policy regimes and good market access with potential for strong counterparties. t " LFZ BTQFDU PG :JOTPO T growth plans focuses on greenfield asset development in markets where we assess the consenting risk to be manageable and where we can deliver greater total value to our stakeholders. Stakeholder groups Materiality Capitals GREEN TECHNOLOGIES MARKET OVERVIEW RISKS OPPORTUNITIES YINSON’S STRATEGIC RESPONSE IMPACT t 3JTJOH BXBSFOFTT BCPVU the harmful effects of greenhouse gas ("GHG") emissions is spurring low- carbon electricity demand, which is driving the global green technology and sustainability market. t /FX BOE OPWFM HSFFO technologies can prove challenging to commercialise, caused in part by high product costs. t " MBDL PG BGGPSEBCMF and reliable research institutions could delay the development of green technologies. t (SFFO UFDIOPMPHJFT is an emerging segment, with the decarbonisation of the transport industry offering exciting opportunities. t *OWFTUNFOUT BSF supported by government funding and incentives. t Yinson established its Green Technologies Division in 2020. It aims to build a profitable global business, which, through investments in green technologies, accelerates the transition to a net carbon-zero world, making the world a better place to live for current and future generations. Stakeholder groups Materiality Capitals S1 S6 S5 S7 S9 M7 S1 S6 S5 S7 S9 M7 EXTERNAL ENVIRONMENT C1 C2 C6 C1 C2 C6