Far from being daunted, however, Penney is relishing doing battle with a side that impressed him as he watched on during Ulster's 27-19 win over Leinster last Friday.
"The Ulster guys are going really well so it will be a benchmark for us given that they are so far in front and playing some really good, tough rugby," he said.
"These local derbies are fantastic. I saw them on Friday - brutal, big, robust, tough, physical, clinical. All the clichés and superlatives you're probably used to hearing about them every week.
"The way they dismantled the Leinster scrum and put them under real pressure - at times at lineout maul drives - they brutalised Leinster.
"Bring it on - it's beautiful isn't it?"
Penney has made eight changes to his team, with Peter O'Mahony, Conor Murray and Simon Zebo all returning, though Ronan O'Gara has to make do with a place on the bench.
Munster hooker Damien Varley returns to the side having missed the 16-12 win over Connacht last Saturday, and he is another singing the praises of Mark Anscombe's Ulster.
"They have some great players up there and are running away with it at the top of the table," he said.
"But it would be a great way for us to finish 2012 by winning against them."
Anscombe has made 11 changes to his starting XV, with an all-Irish squad travelling to Thomond Park.
Paul Marshall, Roger Wilson and Lewis Stevenson are among the players coming into the side.
Ulster face a tough schedule of fixtures in January and several squad members have also been on national duty at a training camp.
"We sat down with Declan Kidney and discussed giving guys that have been on national camps this week some time off," Anscombe told the Belfast Newsletter.
"It was either a case of resting a good few for the Leinster game or a good few this week.
"With Leinster being at home we wanted to get a monkey off our backs against them.
"We are resting a few this week, but we are still happy with what we have got. We have talked over the course of the year about the depth of the squad and being able to survive when you do not have certain players."
At Thomond Park, 5.30pm.
Referee: Alain Rolland (IRFU, 53rd competition game)
Assistant Referees: Dudley Phillips, Sean Gallagher (both IRFU)
Citing Commissioner: Tom McCormack (IRFU)
TMO: Kevin Beggs (IRFU)
Live on RTE Sport and BBC NI