And with that, I am pleased to invite Dato' Ir. Megat Jalaluddin bin Megat Hassan to kick off our session. Thank you. On to you, Dato'.
Okay, thank you very much, Yuva. Assalamualaikum warahmatullahi wabarakatuh. Selamat pagi. Once again, I would like to welcome everyone to Tenaga Nasional for our third quarter analysis briefing. Happy to note that today, joining me, a familiar face, Dato' Nazmi Othman, our Chief Financial Officer, and on my right, I would like to introduce Dato' Nor Azman Pazil, who is our MD for Generation, also known as Gen Co. So he has been keeping himself under the lid for the last one year because he is focusing on bringing Generation to the next level, in which we will tell some of those stories later on. So coming back to the purpose of here today, for the first nine months of 2024, the TNB recorded a PAT amounting to MYR 3.8 billion.
When we look at the adjustment on foreign translations, the figures are about MYR 2.8 billion, representing a 13% growth compared to the last quarter, indicating that the performance of Tenaga is in continuous momentum, a stable performance reflecting the success of our ongoing initiative and continuous effort to drive growth and efficiency. On the demand, historical demand for the year, nine months, we are seeing a good, strong growth for electricity demand, which is about 6.7%, in tandem with our GDP growth of 5.3% up to the third quarter. If I can recall, there are not many times in recent years the electricity demand growth is higher than the GDP growth. We are seeing something special as far as we can see with respect to the relation between the economic growth and the GDP.
It used to be one-to-one in the 1990s for those who may not have yet been in the industry, and then in the last 10 years, it goes down to almost 50%, the growth of electricity compared to GDP. But now we are seeing a good trend moving forward, whereby at least this year, we think that our demand outlook of 5.8%-6.3%, which is a revised outlook since we have come towards the end of the year, whereby we have good, confident figures comparatively, and we believe that this year, the demand growth of electricity will surpass the expected GDP growth of 4.8%-5.3%. That's how the growth of electricity, and of course, the growth of electricity is actually very much supporting the GDP growth.
With respect to our performance, as you can see, happy to share that we are also seeing good progress with respect to one of our generators, M4. We are able to make it in operations since early this year. So now M4 is operating again after the repair works. So that is a good sign for Tenaga Nasional and also for the industry to support the demand growth. Looking overall for Gen Co, despite the challenges of M4, we also see an overall improvement in performance for the rest of our plants. Next, please. Moving to the energy landscape, we have two important elements that are coming up recently. First is actually on the Budget 2025. We are quite excited with the budget announcement, which underscores the government commitments in driving growth and success in the energy sector.
TNB is fully supportive of the government initiative to build a sustainable and resilient energy future for the country. The second milestone recently is we have the pleasure to receive the visit by none other than our Prime Minister as part of our 75th celebrations, as well as officiating the Platinum Building. Looking at the mandate and the speech given by the Prime Minister, we can see there are four key takeaways for Tenaga Nasional. First is the focus to shift the generation from the conventional into RE and to accelerate the RE energy transition. Second, the potential role of getting the ASEAN Power Grid initiative to be a reality. There are a lot of planning and conversation with respect to the ASEAN Power Grid.
Here, we are seeing the Prime Minister giving it attention so that TNB can have realized the intention to have interconnectivity among the power utilities in the region. The third, our Prime Minister mentioned about all the green initiatives, acknowledging that the mechanism that Tenaga introduced on the Green Lane Pathway, together with the Platinum Green Building Index, reinforces the eco-friendly development together with the business growth that we want to achieve. The fourth is the emphasizing, as we move into the energy transition landscape, research and innovation is going to be key, especially on technology adoption to accelerate the energy transition. So on the research and innovation, Tenaga Nasional is putting a certain % of our PAT into the R&D, which is powered by our own TNB Research in Bangi. So these are some of the key points with respect to the energy sector landscape moving forward.
And within these key takeaways from the Prime Minister, we can see that it is a message to Tenaga Nasional to drive those initiatives or to drive those spaces, to drive those technology investments to support the government's net zero ambitions. So one of the elements that has been mentioned regularly recently by the leadership of the country is on the ASEAN Power Grid, which the intention is to have the collaboration effort among the ASEAN power utilities to secure the energy security and more so to have a good sharing platform, especially among the green sources that are being produced by each of those countries. So looking from the perspective of the potentials, today, the ASEAN countries have around 7.7 gig of green energy sources. At the same time, there are projects under construction that are amounting to almost 600 MW
So the potential among the RE generation from these countries, from the 10 ASEAN countries, is even more up to the 17 gig to 25 gig. So the power transfers, especially the green power transfers, if we can make it happen, that will create not only an ASEAN power grid, but will also provide the next phase of the economic growth for these countries. To that effect, the role of Tenaga Nasional, this is where we think the first step of our regional role for the region. As we can understand today, Tenaga mostly focuses on the domestic sector of electricity. We focus on the Malaysian market, and we have also gone beyond the Malaysian market into the international market. So now there is an opportunity for Tenaga to be playing an active role in the regional electricity market.
So moving forward, I would believe that Tenaga will have a good domestic focus, strengthening or venturing into the regional industry and strengthening our selective global footprints. So on the regional foray that we want to come in, we have started this with the potential of the project that is called LTMS, the Laos-Thailand-Malaysia-Singapore Power Integration Project. And recently, we have taken this to the next step with respect to the MS portion of the LTMS, meaning that a commercially based power transfer between Malaysia and Singapore, whereby we sign off with Keppel for 100 megawatts of conventional power transfer between these two countries. So I'm glad to share that this commercial arrangement has started in September 2024 under the willing seller, willing buyer arrangement. And to date, we have delivered around 7.5 gigawatt-hours to Keppel through this LTMS project or MS project.
Second is the cross-border electricity sales of RE energy, or in short, CBES RE, single buyer ENEGEM. Glad that progress has been made to a single buyer, whereby a bidding process has taken place, and a winner of the bidding process has been determined, and the power transfer of 50 megawatts will happen through this ENEGEM platform soon. So this is expected to be finalized in December 2024, which is next month. So in other words, we are seeing the reality of a commercial arrangement that will support the ASEAN power grid in the future. This also provides Tenaga Nasional a good revenue stream with respect to our intent to be a regional player through the wheeling charges of this power transfer. So there was some estimate with respect to the current LTMS project and also the ENEGEM.
What kind of indication with respect to the wheeling charges and the service fee that TNB as a company will attain through this project? So we hope that the ASEAN Power Grid can be a reality because definitely, other than sharing the RE resources among the countries, it is part and parcel of our business expansion in the region. So coming back to the mostly local domestic front of Tenaga Nasional, so we would like to provide some guidance to the market on our intent and plan to expand the generation capacity mix for Tenaga Nasional comprises mostly the clean energy generation for the future. Meaning that if you look from the perspective of the next six or seven years, we plan to increase our generation capacity from today around 17 gig to about 21 gig, comprising mainly coming from gas generation as well as RE solar hydro generations.
There is also the intent, as you can see from the graph, that the mix of RE will also be increasingly comparative to now. We would think that by 2030, the mix of the coal will be reduced to less than 30% of our generation mix in comparison to today, is almost 45%. So this is the intent, and the intent with the plan to transform Tenaga into a greener entity for the sustainable future growth. At the same time, we are mindful that there is a performance measurement and glad to share also with respect to the third quarter performance of Gen Co. As a unit, we have been exceeding the equivalent availability factor or EAF up to 80% to date, which is above the planning of 78.6%.
So overall, I think generation is seeing a good performance while we are trying to increase the capacity overall for Tenaga Nasional. So this is a snapshot. Please, previous slide. Okay, this is a snapshot of what I have mentioned just now with respect to how do we grow from 17 to 21. This is achieved through a new plant up. So over the next six or seven years, we think that the amount of plant up is going to be about 10 GW of a new plant up. Capacity mainly through our solar generation locally. There are also a few expansions of the new plant overseas, especially in the U.K. as well as in Australia. But predominantly, it will be a local generation, hybrid, both in solar and solar park, combined with the conventional generation through gas, for example, the Paka project.
So this is the pipeline moving forward to 2030. We are mindful of the fact that some of our plants will go into a retirement phase. It is expected 6 GW will be retired based on the PPA. It will be retiring. Of course, there is an opportunity, if required by the industry, by the system, for some of the good performing plants to have an extension. So not taking the extension as part and parcel yet. We believe that the net pipeline of projects by 2030 is about 4 GW. And that is the reason why we think that by 2030, we will actually have a net 4 GW of generation compared to what we have today. So that is the landscape of our generation. And that is the plan of our generation vehicle, both GenCo and New Energy Division.
And of course, as we continue to grow the business, we remain committed to ensure that the investment provides a fair return to our shareholders. And the indication is that we will try our best to provide a high single digit portfolio EIR domestically. So this is how we see us moving forward with respect to capacity generation domestically. And we are also in the position to capitalize some of the opportunities that will come along. That is part and parcel of the evolving landscape of energy today, investing, for example, in energy storage and the equivalent, the smart grid. I think probably many of you have read the announcement by the ministry with respect to the tender of the battery energy storage yesterday. And definitely, TNB is more than prepared to be part and parcel of providing those solutions to the industry.
As we pursue our growth, we have not forgotten there is another objective of Tenaga that is providing a green growth. So the motto of the 3G, Growth, Green, and Global will be the key directional intent of Tenaga. So in the aspect of greening ourselves, we have put an aggressive annual target to reduce carbon emission intensity, which is related to Scope 1 starting 2024. So there are basically two ways how we, as a company, reduce our intensity Scope 1 measurement. First is through the RE capacity expansion I mentioned earlier, meaning that we increase the RE generation, reduce our carbon emission. But at the same time, we understand that part of our portfolio, we still have the carbon emission. And to address this aspect, we come up with a carbon management strategy that will actually help us achieve the 5% yearly reduction target.
So some of the carbon management strategies are actually to reduce the carbon itself by enhancing our efficiency of the plant by using the new technology and also looking at the possibility of co-firing some of our coal plants. The second strategy of carbon management is actually on carbon capture, something that is very much we would like to pursue. But of course, it is yet at the stage of the go-to-market. So it is basically reduce the carbon itself. The one that we still have the remaining, we try to capture it. At the same time, we try to also use the so-called market mechanics of offsetting the carbon emission.
But before we go to the offsetting through the market mechanics, we believe that another offset that can happen is for us to invest in the nature-based solution, carbon offset initiative like reforestation to tackle some of the hard-to-abate emission that we have. So we have put this officially as part of our drive to achieve carbon emission reduction for the next seven years and so. So we continue to provide regular updates on our progress and initiative on our ESG stories. And we have this available at our dedicated TNB website, which focuses on the ESG. And we will publish all the numbers regularly as we move along the journey. So that is the overall context and direction of Tenaga Nasional. And next, I would like to go slightly deeper, looking at the performance of the quarter three, how much we have made progress thus far.
So based, I think by now, probably you have understood the way we share the progress. It's based on our strategic pillar. The first pillar is deliver clean generations. These are some of the updates with respect to the progress of the projects that we are currently undertaking. Happy to share some of the good progress that we are making. First is on Nenggiri Hydro Project. We have achieved about 30% project progress. Alhamdulillah, we are now back to the original target plan progress after some challenges during the construction, the initial construction of the tunnel. But we have completed the diversion tunnel number two, and we have kept the project to be back on track. And as everyone is aware, the most challenging part of hydro project is actually the initial part during the construction.
For Nenggiri, we are still maintaining our target to have the COD in quarter two 2027. The other project that we are excited is actually the hybrid hydro-floating solar. There are two places that we have identified, Chenderoh and Kenyir. So the progress of this project, it is basically pre-construction period. We have done all the feasibility studies, initial EIA, and so forth. We are now at the stage of applying the EPCC to deliver the project. Based on the size of the hydro-floating solar of almost 3,000 megawatts, it is only natural that we will do this project by phases. And we have identified two times 500 megawatts as the first two phases that we will go ahead with it. So we are targeting this first COD in end of 2026. The other one is our conventional Paka repowering.
We are at the stage now doing the facility study. InsyaAllah, we will be able to commission COD by 2029. For the new energy division, happy to share that there will be a COD for our solar green development in UK, 100 MW We call this project a Campana Project that will be commissioned. We have started the initial operating date last week, if I'm not mistaken, last week, and we are very much online to get the first dollar coming in December, and the rest of the project, the corporate green power, CGPP, we expect it to be COD by 2025, and the centralized solar park by 2026. These are the pipeline, and the progress are all good as we can see here today. Next, please. The second pillar is on our energy transition network, where we develop a flexible network for energy transition.
This is where our regulated business sits in, especially the grid and distribution. The Capex utilization has been very good. By third quarter, we are already 84%. We don't think there will be any problem to complete 100% based on the RP3 numbers, and part of the energy transition, part of the Capex is energy transition Capex, in which we have delivered 71% after third quarter. The rest of the key projects under the ET, smart meter installation, we targeted 600,000 for the year. But by today, we already completed 800,000. So we are very much 800,000, sorry. We targeted 600,000. We have completed 800,000 up to today. So we are good to get the performance of the installation to the customers. Today, we have about 4.3 million smart meters installed. The distribution automation, a key project to ensure our performance of the SAIDI.
We are also at 95%. And the work value optimization, a small bucket from the CapEx, we are at 58%. But by nature of the project, we believe by end of the year, it will be 100%. So all good with respect to the CapEx utilization for RP3. Another element with respect to the grid and network is on the data center power supply. So today, we would like to share a better view with respect to the data centers development for the country and for Tenaga Nasional. As to date, we have actually completed 17 projects. 17 projects. For the 2024 alone, up to the third quarter, we have completed eight projects amounting to 1.1 gig supply to the customers. So in total, 17 projects, 1.7 gig up to today. And the actual load utilization, as you understand it, it is a step load.
And today, we have recorded about 250 megawatts of the completed project. It is very much in tandem with the planning of the consumption by the data center. In the pipeline, 1.7 completed. We have another three gig in the pipeline, whereby eight projects we are under construction amounting to about 1.9 gig. And the balance 1.1, we have signed the ESA and to start the construction soon. Cumulatively, 31 projects amounting to 4.7 gigawatts of electricity demand. We are happy to say that this is something that will provide the anchor for the industry here. And there are some questions with respect to where the trajectory of the data center. If you look at the megawatt that we have signed today, it is about 4.7, whereas our capacity for the country today, the generation capacity is about 27 gig.
So we actually have still a good room to provide the supply to the data center with the reserve margin that we have today. So on the third pillar, which is the customer pillar, the solution that we provide, sustainable solution that we provide to customers through our subsidiary, in this case, G-SPARX. G-SPARX has played a significant role in transforming our customers to be prosumers through solar rooftop installations. The progress of G-SPARX has been good. So today, we have secured up to 400 megawatt peak of customers. So it's almost going to be 500, which is what we target by the end of the year. So notable achievement in the third quarter is we secured the solar rooftop installation for Majlis Amanah Mara Building, amounting to about 13 megawatt peak. At the same time, that is one of the largest projects that we attained in the third quarter.
That's coming from a government institution, Majlis Amanah Rakyat. On the private sector, we also secured about 2.5 MW from Seri Pajam Development, another developer for their semi-detached factories in Senawang. All in all, a good progress for G-SPARX. Completed capacity of 71 megawatt peak. The rest is under construction. This is also supported by the extension of NEM 3.0, Nova Extension. To date, 80% of the quota has been approved. There is room for quota, the allocation of the quota, which is amounting to 1,100 MW There is room for G-SPARX to move in, to secure customers based on the quota. Another big project for G-SPARX undertaking is the collaboration with Sime Darby, 4.4 MW The progress we have started with 10 sites with Sime Darby. The progress is actually at 50% completion. We expect this will provide us the revenue in 2025.
So that is G-SPARX, prosumers, giving the customers the opportunity to generate solar for self-consumption as well as exporting to the grid. The other element that is encouraging is on the transportation sector, the role Tenaga plays with respect to encourage another industry to adopt sustainability to achieve their sustainability objective. There are two plays for Tenaga Nasional. One is actually to provide the EV ecosystem, meaning that we will provide the supply to the EV charge point operators. And happy to share today that we have commissioned 75 numbers of EV chargers. The megawatt is about 16 MW We have also committed and under construction about 4 megawatts, comprising of 26 EV chargers. And in totality, today, we have received requests for supply amounting to 115 MW So this is progressing. So the only question is about the speed of the implementation.
But in recent months, we can see that the pickup rate is higher and higher. And this is supported by some of the figures from the supply chain, namely the EV cars on the road. So as of today, we are recording about 33,000 units as the data for September 2024. On the year-to-date electricity sales, it is recorded now 2.2 gigawatt-hours, amounting to revenue of MYR 2.4 million. So that is the industry growth with respect to EV charger as well as consumption from EV. For Tenaga Nasional, second role, which we are also a charge point operator. So today, we have commissioned 54 EV chargers, mainly at the highways. At the same time, at the supermarket, namely AEON. And we are to complete 66 numbers by 2024. So that is in progress.
We are also attacking some of the routes in the East Coast, major trunks to encourage the EV adoption for the customers. So this is definitely initial stage, but we are encouraged by the development in the last few months. We believe this is the next phase of growth for the Tenaga Nasional as well as the industry as a whole. The support will continue. We are also happy to say that the other players in the ecosystem are also putting in the investment to ensure that we achieve the country's sustainability objective. With that, I pass the mic to Dato' Nazmi to continue. Please. Thank you, Dato' CEO. Okay, on the financials, we have released the financial results yesterday or yesterday evening.
So just to stress some points with regard to the results that we have released yesterday on the third quarter or the nine months unaudited. For the nine months or the third quarter, we recorded revenue about MYR 42 billion compared to last year, about nine months, about MYR 39 billion. That's a growth of about 7.5%. But in terms of the unit growth for the group, we recorded about 7.6%. And for Tenaga, 7.3%. That's mainly driven because the economic activities as mentioned by CEO just now, the GDP is picking up. So we are seeing a lot of economic activities around the country in terms of industrial and the commercial industries. So these are the sectors which are supporting in terms of the unit growth for the electricity. Having said that, we also saw generation business started to show signs of improvement in terms of the earnings.
We know for the past few quarters, we've been always talking about GENCO not performing or not to the expectation of anything. But with all the initiatives they have put in and going forward, I think they are on the better footing at the moment to progress in terms of them achieving better earnings. With M4 coming back online, so the earnings of GENCO has started to improve and all the initiatives they have done to make sure that the power plants perform as expected, now started to show improvements. But in terms of related business, as mentioned by Dato' CEO just now, they perform as expected. They continue to perform as expected in terms of the RP3 determinations. So we believe they will continue to do so. During the nine months also, we saw lower fuel margin. So that has contributed very much to our cash flow.
We also saw higher availability of the asset of GENCO at 80%. With that, and the better collection rate from our customer, we have managed to pay off some of the loans during the year. You remember during the year, during the high fuel costs, we took up a lot of loans just to shore up the working capital to pay for the fuel costs. But now, with the better cash flow and better earnings that we are seeing, we are able to pay off some of the loans in there just to make sure that we free up some capital for our future growth in terms of our capital expenditure. Go with that with the next page. Talking about GENCO, just to brief the management team about the GENCO performance, it has always been the hot topic of GENCO.
Related business is stable, but now GENCO is always in the spotlight. Let's talk about GENCO a bit more. In terms of earnings of GENCO at group level, they are at MYR 400 million. They're about right. But because there are a lot of interco that we have to eliminate from the equity to the group. But at group, what we have done is that the M4 penalty of ATP, they call it about MYR 280 million net of tax, we reverse it at group. That's why we have MYR 400 million at group. But GENCO alone is MYR 154 million. Taking everything in, all the penalty by the M4, the repair cost potentially, we're going to claim from the insurance, but we recognize some of the costs also at the moment. And they are performed at MYR 154 million. So having accounted for all these issues at M4, they're still in the black MYR 154 million.
So that shows that the plans and the initiative of the management, especially, has started to show improvement. They are coming back in terms of them operating and also contributing to the bottom line of the group. So GENCO, we believe going forward will be a better footing. So I think there'll be stronger earnings from them also going forward. With the mention by Dato' CEO just now, the planning that we're going to have for the future of energy in terms of us achieving better megawatts. So this is the footing that we require from GENCO. And they've started to show that. So all in all, I think GENCO is in good shape. And I think they'll be in better shape in the future. Next page. We talk about the GENCO, the 80%. This is where the measurement of generation business is. They have to be available.
We put a target of 78.6. At the moment, they have achieved more than the target of 80%. That's where the money is. As long as they're available at a higher level, the earnings will be better for us. But for our technical friends in terms of system minutes, of course, they are beating the target or they have put in much, much better. Even for the CID, we are at 35 now. Even the target is 48%. Technically, we are in good shape, better shape. This is where we measure our technical performance in terms of how our earnings will be resulted from all this technical performance. Next page. A bit of our working capital management and where the reserves are and how collections are. Our collections during those years, during the COVID years and before, have been very under pressure.
You remember those years or those quarters, we have 80% or 85%. Sometimes we went down to 75%. So now things are much better. We are having a better collection rate. Even with ICPT collections also, we are achieving an average of 113%-114% collection rate a month. So things are moving into a positive direction for Tenaga. So with that, we are also able to manage our reserves, especially because though we have higher sales, but we manage to maintain our reserves about MYR 5 billion thereabout. So meaning to say that the outstanding amount of the reserves has been managed properly. So there's no longer-term reserves outstanding. There is, but we are managing that within the required period. We also saw the Moody's also released the notification about the Moody's. They have affirmed our rating at A3, stable outlook.
During the quarter, we also announced our TNB's transition finance framework. So this is more of our green funding that we are going to do for the group. We have a lot of plans for our megawatts planting up. And the grids and the lines also need to be on the green initiative. So we are getting ready for that time. And we believe by Tenaga, we are having good credit ratings. We believe we can secure very competitive funding rates by having the transition finance framework also. Next page. This Dato' CEO will take us through on the forward guidance for Tenaga Group.
Thank you very much, Cik Pu. So as concluding and summarizing how we see the future or the near future. So in terms of the electricity demand, our projected growth for this year, which is practically the remaining one month, is about 5.8%-6.3%.
I think we are quite confident the numbers will be there towards the end of the year. Second, the group CapEx, we expect to spend between MYR 11 billion with MYR 7.1 billion for the regulated business, and the remaining will be for the non-regulated business. With respect to working capital, I think CFO has deliberated on it. This is a key to support our growth strategy. We will continue to proactively manage our cash flow and engage in active capital allocation to ensure that we have a good return on the portfolio basis. On the subject of RP4, we have, as mentioned earlier, we have put in our proposal as per timeline, and it is moving into the advanced stage at the moment. We expect the official announcement will be made by the end of the year.
So looking at the prospect, bearing any unforeseen event, we expect to maintain a good momentum forward, stable financial performance for the year, and we will continue to strengthen our business, and we will continue to reward our shareholders. So thank you very much.
Thank you, Dato' Megat and Mr. Nazmi for insightful presentations just now. Let us now smoothly transition into the Q&A session. We'll begin by taking questions from the attendees here in the room, followed by those joining us on WebEx. With that, I open the floor for questions. Please raise your hand if you have a question, and our personnel will bring the mics to you. Please introduce yourself and then share your question.
All right. Thank you. I have a few questions. Number one, in terms of RP4, can you update us on your discussion and negotiation with the government?
We heard rumors that Tenaga actually asked about 8.5% in terms of return for WACC. Is that going in the right direction or not? Secondly, for the battery energy system, is it going to be part of the IBR Capex or a separate scheme? Because judging by the trajectory, it's going to be a huge capacity increase. And third, there are other players also competing for RE capacity, for example, like Gentari. So what happened is that given that those ambitious plans may be at loggerheads sometime in the future, is it necessary for you guys to actually focus on overseas once more despite the government guidance of a more domestic investment? Because it impacts how we look at your guys' capacity in the future. Thank you.
On RP4, we have made the submission. But as you understand it, where the WACC return for RP3 is 7.3%.
Fundamentally, if we are going to ask or if we were told we are asking for 8.5, then there must be something fundamentally changed for us to request for such a number. So you don't have to believe on the rumors. Believe on the rumors because the regulation provides the mechanism, what we call REEC. So the calculation of the so-called WACC is actually based on a very structured way to get those numbers. So wait for the announcement. I think, inshallah, we will get there soon. That is RP4. Second, best battery storage. So what has happened is that if you can recall, Tenaga Nasional was entered to deliver a battery project of amounting 100 megawatts, 400 megawatt hours. So we are now in the process of putting that as part of the system. And yesterday, there was also an announcement with respect to a battery project.
So, I would believe the intent is the same, to get the generation from the battery, the green generation from the battery, but at the same time to strengthen our grid. The TNB position is quite straightforward. We will enter and bid into this so-called bidding process. But at the same time, we also feel the battery that has been tendered for us as part of the project. So we believe it is a combination of our view. It's not a binary. Our view, it is a combination. And I think that spurs well for the industry, meaning that we are giving the opportunity for many players, including Tenaga Nasional, to take part in the energy transition. So on Gentari, it's very. I would not want to comment a lot on Gentari. But we believe, again, the energy transition to provide the cake for the industry to become bigger.
So just like the battery just now, the cake becomes bigger. I think there are many opportunities for players like Tenaga Nasional to be part of a bigger cake. So from Tenaga Nasional positioning, as long as we are not limited to play in the enlarged cake, in the energy transition, we are going to be okay because of our history and performance. We believe that we are going to be there as part of the industry players that will drive the energy transition. So in other words, we consider Gentari and companies alike to be in collaborating to make the energy transition happening for the country.
All right. Thank you, Datuk. Now, we will continue taking questions from the floor with a gentle note that each analyst is only limited to two questions. Thank you.
Hi, my name is Hadi from CLSA.
I just have two questions to check on the outlook slide earlier. MYR 11 billion Capex, is it for this year or for next year? And number two, on the load utilization, what is the expectation by year-end from data center? Thank you.
On the first question, the outlook is actually for this year. We have not included the prospect for the next year or the next three years for obvious reasons. We are still waiting for the numbers with respect to the regulated business. Of course, we have those numbers for the non-regulated business. But we will provide the guidance probably in the next analyst briefing when the regulated business numbers are known. I think for the non-regulated business, I've shown the pipeline. I'm sure you probably can guess or calculate what kind of numbers will be there. And definitely, it's going to be more than the current one, inshallah.
The second one is CFO one. Oh, right. The data center, I think you are questioning because we have commissioned 1.1 gig. Their MD is about 248. Is that the question? The low utilization rate for the data. Oh, expected utilization for the year. For the year, we are expecting 60%-70% of the 1.1 gig just now as we move along because it is really a step load. And it is a step. Probably in the next briefing, we'll show you the step so that you have a better view how the step looks like.
Darwin from CGS, I have two questions. The first question is on the 4.7 gigawatts worth of ESAs that have been signed. What percentage of that is really coming from hyperscalers versus smaller consumers? That's my first question. The second question is on the 100 megawatts energy exports with Keppel.
Could we get a sense as to what sort of tariffs are we looking at? Is it significantly more to what domestic companies are paying? And how does Tenaga benefit from these exports in terms of income streams? Thank you.
So on the data center, basically, there are three categories of data center. One is the retailer data center. This is more for the e-commerce applications. Second is the wholesale data center. And third is the hyperscaler. So from the perspective of Tenaga Nasional, the definition, it is more of a planning for us because they consume the same megawatt. So in terms of planning, there's a difference because the retail growth, the step just now, so the retail step is actually smaller, whereas the hyperscaler is the biggest step. You can see they are coming from maybe 20, the next one is 40, 80, that kind of hyperscaler steps.
Whereas the retail is more of 20-21 megawatts, and that kind of range of step. So if you look at, we can only, at the end of the day, that is the business model of the data center. So from Tenaga Nasional, we can only probably do analysis with respect to the names of the data center, who are there in the market, and try to link whether they are coming from the hyperscaler or the retailer. So I would say, so it is your analysis and my analysis. I mean, I'm trying to say that you can also do the analysis. But from Tenaga Nasional analysis, majority that comes to Malaysia is the hyperscaler. Now, with the name of, for example, BDC, ByteDance Data Center, you see these are the hyperscaler guys. And happy to share also. Before this session, we had a session with BDC.
They signed an agreement with us. First, additional ESA for the conventional energy, totaling 557 megawatts for three of their new data centers at three different locations. And second, more interestingly, is that we are also having a heads-of-term agreement for them to take 100 megawatts of green energy from our TRE, our new energy division. So the 100 megawatts will be the first customer that we want to implement the CRESS. So today, we are double happy. First, seeing you. And this morning, the second happiness is actually having the first customer, BDC, to be onboarded for the CRESS implementation. Of course, this is an agreement. It will be finalized as we go along. So BDC is definitely a hyperscaler. So if I look at the application today, maybe my colleagues can correct me if I'm wrong. I think 60%-70% that come here is actually the hyperscaler.
But you can always prove me wrong because you are the analyst.
Right, Dato', thank you so much for your response. I'm afraid that is all the time we have for the questions from the floor. We will now be moving on to questions from analysts who are joining us virtually. For those of you on WebEx, if you have any questions, kindly type your name and the company you represent in the chat box. Our team will then unmute you when your turn is up, and you may address your questions accordingly. Now, Dato', we have already received one question from the chat box, and it's from Edwin Goh, representing Grandp ine Capital. His question goes, "Hi panelists." Sorry about that. "Hi panelists.
Given that Tenaga has to return excess profit to the energy industry fund, when actual demand exceeds the allowable growth cap, could you share the outlook of RP4's impact on Tenaga's ability to capture upside from the expected data center power demand growth?
Yeah, I think the IBR framework plus ICPT provides a good, steady, guaranteed return for Tenaga for the so-called revenue cap entities, which is the grid as well as the distribution network, and there is also another entity that is based on price cap for the retail. So looking at the growth of the data center, yes, under the framework, we are to return if the return beyond 7.3, meaning that we are guaranteed at 7.3. For RP4, what with respect to the data center, the limit of the consumption will not be the same as RP3.
Meaning that there's already an upside for RP4. It is not that we are moving from RP3 and RP4. The cap of the 7.3% remains the same. It's actually, it will be elevated higher. The demand for the data center in RP4 will actually take the immediate upside of the 7.3% to be higher. From there, there is also an upside for Tenaga Nasional, meaning the base tariff of the 7.3% or the consumption will be tagged higher. Meaning there's already a guaranteed return of 7.3% of the higher base, and that's the thinking. There's also another upside for our revenue. That is for the revenue cap. For the price cap, definitely, immediately, if the consumption is higher, then we will keep the additional upside on the consumption. That is how the IBR works.
And that is where I think the benefit for Tenaga will be there, either revenue cap or price cap, provided that the consumption of electricity is going to be higher. Data center will provide that kind of upside to Tenaga Nasional. So how much that the year? Got a question to what will be the outlook? So the outlook is going to be better. That's how I see it. But is there numbers for me to share today? I can only give some indication when the numbers of the RP4 become evident. Okay.
All right. Thank you, Dato' Megat. We'll now continue on with the next question from Rahul Bhatia, representing HSBC. Kindly unmute your mic and proceed with your questions.
There's a question. So from Rahul, you mentioned about a better GenCo trend going forward. So we know who's going to answer this one.
Can you talk about what steps have been taken for investing Capex out of the plan? Just wondering what drivers your view. Silakan, my good friend, Dato' Nor Azman.
Okay. Good afternoon, everybody. Okay. About the step that we have been taken for improvement on the GenCo side. So basically, we are improving on the efficiency side, almost a couple of % there. We are operating in a more efficient manner. And then we are also taking care about our coal side, taking more preferred coal so that we can have less outages. And that shows in our CP loss have improved quite significantly. That's on the operational side. On the upgrades, we're having some investment on getting more efficient equipment and more reliable equipment, especially for our N4.
When we have the downtime, then we are taking that opportunity to upgrade certain other equipment apart from the turbine side to ensure that when we're going forward, we'll have more reliable machines. I add a bit. So what has happened is that we are looking at the operational efficiencies. As you are aware, most of the Jimah plants, all of the Jimah plants are PPA-based. So there are two elements of the PPA-base. One is capacity payment. Second is actually energy payment. So this is where we focus on capacity payment to make sure the plants are always available. So from the history, we understand after analysis what will prevent the plant to go down. So there are a number of things that we do.
First, we look at our maintenance regime, the process-based, how frequent we look at the maintenance so that we can prevent the so-called downtime, so what has happened is that we take a risk-based maintenance procedure, so before this, many of the maintenance is actually time-based or even preventive-based. But with data analytics, in which we have invested a bit with respect to what we call a digital twin thinking, we have more data, and we use the data for risk-based maintenance, meaning that we look at the performance of the current plant on a daily basis and look at the risk, will it break down or not, or try to predict to ensure that it doesn't break down. I think that is one of the key elements that has happened when we say that GenCo has a better performance.
The second is on, so there is a process-based efficiency improvement using analytics, if I want to summarize it. Second is about looking at, we also understand better now with analytics, the performance of the coal quality against the machine. So this is where, against using analytics, we try to match the coal performance against the machine performance. And this is where we use what we call the blending technique. So we blend the best coal for that particular machine to ensure that the performance or the breakdown can be minimized. I think these are the two main elements that have happened in the last year or so that provide us a good footing and foundation for us to move forward looking at the operation of GenCo. Second question, I think I let it say for.
Thanks, Dato' Megat.
The question is, could you share more about the quarterly trend in general expenses, 3Q versus 2Q? What are these related to considering revenue was quite flat, and some of the expenses you think as part of RP4 can be categorized into related OpEx? Okay. The analysis of the general expenses between the 3Q and 2Q, so it's a bit questionable at the moment because we can see that over the 3Q, certain additional expenses have been taken into account. So that is done intentionally because especially talking about GenCo, right? Mentioned a bit more about GenCo now. One is about the N4 repair costs that we have taken into to make sure that the N4 can be in operation as due on the 5th of November. Right? So we have to recognize some of the expenses in there.
Yes, we are doing our recourse through our insurance claim and whatever recourse that we can. That's one. Second, in terms of some of the subsidies that are supporting Tenaga, we have higher revenue for the year. And these subsidies need to support Tenaga's in terms of them supplying the equipment like MTM, switchgear, and cable. So in doing so, they have to start production, and they have to produce the equipment as required by Tenaga. So the cost of sale of these subsidies has been higher. But of course, the revenue is interrelated. We need to eliminate. But in terms of them performing and supporting Tenaga's revenue, they have to do that. We also have the TNBR supporting our going forward initiative that we have to do also. So we also have done in this Q3, as mentioned by Datuk Seri just now, the way forward for Tenaga.
We're setting the tone for Tenaga for the future anyway. We saw a lot of things that have been done from the years of 1894, something like that, today, and how we're going to move to green, so we're getting ready for those things, so we need to invest in terms of capacity building. We need to invest in research, the R&D mentioned by Dato' Megat just now, and we have to make sure that we are ready for those things, and we have to make sure the site of the plants, I can mention like Paka, the retired power plant, that we need to demolish and making sure that we can build or repower that site. So these are all the things that we are putting in or working ready for the future, but of course, we have to recognize the cost now.
But of course, as I said just now, setting the tone for the future requires an investment today. So these are the things, among the things that we do. We have to take the hit. Yes, we take the hit. But at least, as I said just now, we have a better prospect for GenCo. Regulated business is fair, and they're expected to perform fairly. But our focus now is generation business and in the new energy business. These are investments required in these kinds of sectors that we have to put in now to make sure that we have a better footing going forward. As I mentioned just now also, we are filling up our balance sheet to make sure that we can have more room for us to invest in this new energy for the future.
So all in all, in general, that's how we see Tenaga today going forward. Thank you.
Thank you, respected panelists. We do have time for one final question from the floor. If there are any takers, please raise your hand. If we could get the mic to the gentleman in the front in green.
Hi. Good afternoon. I'm trying to really understand how do we look at your quarterly numbers quarter-on-quarter basis, which are your numbers, even if I take your SPG one-off account from last quarter, your earnings still drop by about MYR 600 million or MYR 1,700 million quarter-on-quarter basis. And then even you say that you guys actually incur a higher cost of sales still for your own subsidiary operations to support your main operations. But then you give more business to your subsidiary operations. Yes, your revenue just gets into the limited revenue side.
Your cost of sales goes up, but that also means that your subsidiary should contribute higher profits to your bottom line on a quarter-on-quarter basis, so how does your quarter-on-quarter basis come down so much?
I think it's only a better view of cumulative figure, but one quarter could be one incident for that quarter that happened that could create a lot of distortion for that quarter. That's why, as I said just now, along the years, we are investing so much things in our operation. Subsidiary's performance during the quarter, maybe for that quarter, the performance in terms of supporting Tenaga may be higher in that quarter compared to the previous quarters. You mentioned just now about the performance subsidiary need to be higher in terms of profit. Yes, they are recording profits of all these intercalated profits.
But if you take out the subsidiaries out of the contention of Tenaga, if I buy or we buy the equipment from outside, there'll be higher cost of that. Right? Then the subsidiary's cost will not be there, yes, but there'll be higher cost for Tenaga because we have to pay for premium. Because these subsidiaries, they are producing for us as what we say the pricing is based on the ten year basis. Right? So these are the things. So as I said, if I look at quarter-on-quarter, yes, I do as it is just now, we saw a lot of distortion in this quarter because we have started to see the investment required for the future. And subsidiary's performance quite fluctuate also depending on the demand of the energy also. So and how they deliver their product.
So it's a bit difficult for us to answer what happened during the quarter. But you look at the nine months, our profit is higher than last year, even the core profit by MYR 200 million in the nine months. The core profit, I'm talking about after listing accounting and after Forex. Right? So it's higher by MYR 200 million. So it's a better reflection of the performance. And we can take offline, but it's difficult for me to explain on quarter-on-quarter. Okay? So that's how it works because we look at a longer view.
Yeah,
it's very true because Tenaga is very much an infrastructure company. So we invest for long term. So for us, yearly indication, even yearly indication is good if the analysis on Tenaga rather than on the quarter-to-quarter basis. That's why sometimes CEO to face the quarterly results sometimes can be very daunting.
But of course, Alhamdulillah, TNB is moving forward. But trust us with respect to our yearly performance. And we believe, looking at the numbers today, this year is going to be a good year for Tenaga in comparison definitely to last year. And that is the position that we want to take moving into 2025 because we are seeing the positivity of the initiative that we are taking. And I think that spells good for Tenaga and it spells good for the shareholders.
Right. Thank you, Dato' Megat and Mr. Nazmi. Ladies and gentlemen, that is all the time we have for the Q&A session. I would like to thank you all for your questions. Now, I will pass the floor back to Dato' Ir. Megat Jalaluddin bin Megat Hassan, President and CEO of TNB, for his closing remarks.
Okay, thank you very much.
I'll do a quick recap on how we see in the past and some glimpse of the future. So I think we want to emphasize the NATR provides us a good space and momentum moving forward. It's that the NATR announced last year, and we are seeing the positivity of those coming to Tenaga for this year. And we believe you will see this also towards the end of the year for our business growth. Not to forget about that, we always be mindful. We want to grow and green Tenaga Nasional. And that's why in the last quarter, we come up with the commitment to reduce the intensity by 5% yearly with a target reduction of 35% by 2030. So in terms of the earning, the last three quarters, even though you may see there's some movement with respect to quarter-to-quarter because we are not an investment holding company.
We are an operating company, but you see the three quarters, we are basically about MYR 900 million kind of after you minus the Forex and so forth, so it is a steady growth about MYR 900 million-MYR 1 billion kind of PAT that we are giving, and we believe this is the momentum that we want to carry forward, and this is the target that we want to achieve as we move Tenaga, not only for the next quarter, but many, many quarters in the future, so with that, we are always mindful, we are tracking the performance closely and remain mindful of the industry and market volatilities as we continue to pursue the objective of growth and green in this energy transition world that we are in today, so in conclusion, we will continue and commit to drive the sustainable business growth together with the energy transitions of the country.
We will continue with the growth to reward our shareholders. It remains a priority to us. Thank you very much for the continued support.
Thank you, Dato' Megat. Ladies and gentlemen, we have now come to the end of our session. On behalf of Tenaga Nasional Berhad, we thank you for your participation in today's briefing. For any questions that may remain unanswered, rest assured that we will promptly address them following this event. If you require further clarifications or inquiries, feel free to contact our investor relation offices or email us at tenaga_ird@tnb.com.my. For those of you who are here in person, please join us for a lovely networking lunch at the pantry located to my left. To all our attendees, whether present physically or virtually, we appreciate your time and engagement. Stay safe, and we look forward to seeing you for our future sessions.
Thank you and have a wonderful day.