Rise in energy demand boon for utility sector

TheStar Wed, Jan 06, 2021 09:40am - 3 years View Original


PETALING JAYA: The outlook for the utility sector is bound to improve this year with the expected increase in energy demand due to a gradual pick-up in economic activity.

Utility players have generally remained resilient throughout the pandemic despite the drop in energy dispatch during the movement control order as independent power producers (IPPs) are covered under the power purchase agreements (PPA).

This makes them a darling among analysts.

Kenanga Research has maintained its “overweight” rating on the sector given its resilient earnings thanks to regulated asset returns for Tenaga Nasional Bhd (TNB) and gas-based players, as well as PPA-bound income for the IPPs.

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