106 YINSON HOLDINGS BERHAD STRATEGY & OUTLOOK BUSINESS REVIEW - RENEWABLES YINSON RENEWABLES GOALS AND STRATEGIES GOALS • Be a significant standalone business within Yinson. • Participate in the full renewables value chain. • Participate globally by identifying and focusing on key core markets with scale/value potential. • Deliver additional value through efficient capital recycling. Strategies Short to medium-term (1 to 5 years) • Develop significant presence in three markets and 3 GW project pipeline by FYE 2023. • Deliver growth both organically and through acquisitions with focus on growth in core markets. • Build a lean and experienced team. • Leverage internal teams both locally and globally, investing in training and development. Long-term (6 to 10 years) • Establish operations in five to seven markets, with a combined development and operating portfolio of 5 to 10 GW, by FYE 2029. • Achieve optimised operations through digitalisation and innovation. • Adopt efficient capital recycling strategies and build strong equity and refinancing partnerships. MARKET OVERVIEW In 2021, global investment in the low-carbon energy transition grew to USD755 billion, an increase of 27% over the prior year and close to triple the investment a decade prior. This was the largest year-on-year growth since 2011. This includes investments in renewable energy, electrified heat/transport/storage, CCUS, hydrogen, sustainable materials and nuclear. Renewable energy was by far the largest sector with USD366 billion invested. Generation from renewable energy sources (excluding nuclear) is expected to grow to 8,300 TWh by 2022 and 13,500 TWh by 2030. Over 70% of that growth will come from onshore wind and utility scale solar PV projects, with a further 10% coming from smaller scale solar PV systems. Renewable energy sources are forecasted to provide around 31% of total power generation on a global basis in 2022 increasing to around 43% in 2030. While the largest markets in terms of investment remain China and USA, good investment opportunities are found in many other countries with the right combination of policy support and market access. Imbalances between policy targets and energy demand growth as well as the progress in that particular market for renewable energy rollout, can also be important selection criteria. Two recent events have given extra impetus to renewable energy investments and opportunities. Firstly, the Covid-19 pandemic has resulted in many governments focusing on infrastructure investments to revitalise economies. Secondly, the energy crisis in Europe, which is largely attributed to the conflict in Ukraine, has resulted in gas shortages, further accelerating the build out pace of alternative energy sources such as renewable energy. YEAR IN REVIEW Development pipeline This year we have focused on growing our pipeline of renewable energy projects to ensure it is a strong engine for growth in the years to come, while also driving forward several of the early opportunities we secured in 2021 towards being ready-to-build. The renewables value chain spans early-stage opportunity evaluation, then development and consenting activity once the projects are secured. When consents are achieved, which can take between 2 to 5 years, and grid, financing and power sales opportunities secured, the projects are ready for construction. We continued to work with between 3 GW to 5 GW of early-stage opportunities in both onshore wind and solar PV segments, but the rapid growth in projects under development & consenting has been the real achievement of 2022. As of March 2022, projects in this phase had grown from 100 MW to 1.5 GW over 12 months. These projects will progress to investment decision & construction in the coming years, resulting in profitable operating assets that deliver strong and stable cash flows over the long-term. YR
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