Prime Minister Anwar Ibrahim said that in the early 1990s, Renewable Energy (RE) was named the fifth fuel under the National Energy Policy. Now the RE sources are solar, mini hydro, biomass and biogas.
“RE supply in Malaysia is now at 25%, and we are on the right track to source 31% of its power capacity from renewables by 2025 and 40% by 2040,” he said during the launch of the National Energy Transition Roadmap (NETR) at the Kuala Lumpur Convention Centre.
According to him, the IEA reports that investment in clean energy is expected to reach USD1.7 trillion in 2023. There is also a stronger desire for international collaboration that will provide additional avenues to decarbonise.
With the implementation of initiatives under the NETR, Malaysia is set to be at the forefront of becoming a regional leader in the energy transition and RE industry.
The NETR has identified six energy transition levers, along with 10 flagship projects and 50 initiatives. The champions of the projects and initiatives are among public sector, government-linked companies and industry players signifying a whole-of-Malaysia approach.
Anwar said the government will launch a major retrofit programme to enhance eight energy efficiency in government buildings. In this regard, an ESCO (energy service companies) platform will be established to connect private ESCOs, which are mainly SMEs, with government projects.
The central role of the platform would be to serve as an intermediary that pools government building retrofitting projects and encourages public-private coordination in ESCO market.
“In May this year, the Government set out an ambitious target to achieve 70% renewable energy installed capacity by 2050 and lifted the ban on cross-border trade in renewable energy,” he said, adding that a renewable energy exchange will be established and launched in 2024 to act as a market aggregator that will enable price discovery and monetise excess power.
As the paramount challenge in energy transition is financing, it is estimated that an investment of at least RM1.2 trillion between 2023 and 2050 is needed to enable responsible energy transition.
Within this decade alone, the government requires between RM60 billion and RM90 billion to be allocated for crucial projects, among others, expansion of public transportation, strengthening grid infrastructure, and reskilling of human capital.
“Considering Malaysia’s current state of immature decarbonisation technologies, our progress will significantly hinge on alternative energy sources and robust regional and international collaboration. In this regard, the government will allocate RM2 billion as seed fund for the National Energy Transition Facility. This facility will enable catalytic blended finance, to ensure a seamless flow of financial resources towards energy transition projects that are marginally bankable or yielding below-market returns,” he said.
Among them examples are investment in EV value chain, hydrogen, and CCUS technologies. The National Energy Council will be activated to ensure a holistic energy planning and policy development, while monitoring progress of the NETR.
Anwar said Malaysia’s strategic position as the ASEAN Energy Hub enables the nation to play a pivotal role in advancing the region’s sustainable energy future towards Net Zero ASEAN. Notably, utility companies such as TNB and Sarawak Energy are progressing in the cross-border business, leveraging the ASEAN Power Grid.
“This will improve broader energy security prospects and further enhance economic integration with neighbouring countries. TNB is leading discussions with ASEAN utilities and governments for resource-sharing and flexibility solutions at scale. The move will accelerate the energy transition pace in a responsible manner while balancing the elements of the energy trilemma,” he said.
