Malaysia’s journey toward its ambitious 2050 net zero target is fraught with complexities that demand immediate attention and proactive measures. The energy sector, responsible for a staggering 80% of the nation’s carbon emissions, stands at the forefront of this transformation. While the National Energy Transition Roadmap (NETR) unveiled in June 2023 sets a bold goal of ramping up renewable energy capacity from 40% to 70%—equating to 56 gigawatts (GW) by 2050—there are significant hurdles to clear before these aspirations can materialize.
At the heart of the challenge lies the country’s outdated grid infrastructure, which can currently handle a mere 6 GW of renewable energy. The National Energy Policy aims to boost this capacity to 18.4 GW by 2040, but achieving this will require a comprehensive overhaul of the existing systems. Siti Safinah Salleh, CEO of MyPower Corporation, emphasized the urgent need for structural changes across governance, planning, market models, and tariffs. The current single-buyer model, dominated by Tenaga Nasional Berhad (TNB), isn’t cutting it anymore. Safinah pointed out that the electricity supply planning overseen by the Committee for the Planning and Implementation of Electricity Supply and Tariff (JPPPET) is in dire need of reform to align with long-term objectives.
The energy sector’s future hinges on the ability to integrate renewables effectively, and this means not only upgrading the grid but also recalibrating the tariff structures to reflect actual costs. MyPower is conducting studies to reshape electricity tariffs, with changes expected by 2025. However, these adjustments will likely hit end-users in the pocket, underscoring the delicate balancing act policymakers must navigate.
The integration of variable renewable energy sources, particularly solar, is a priority for the government, as highlighted by Sanjayan Velautham, COO of the Energy Commission. The focus on battery storage solutions is crucial to manage the intermittency that renewables bring to the table. Velautham’s assurance that the government is willing to revisit policies as needed is a refreshing take, but it raises questions about the stability of such commitments—investors crave long-term predictability.
While structural reforms and new technologies are essential, the low-hanging fruit of energy efficiency should not be overlooked. Thorbjörn Fors from Siemens Energy pointed out that enhancing energy efficiency can yield quicker emissions reductions with significantly lower investments compared to more extensive infrastructure projects. This approach, often referred to as a “hidden fuel,” could serve as a vital lever in Malaysia’s decarbonization efforts.
The road ahead is undeniably challenging, but the potential for Malaysia to seize emerging opportunities is palpable. The country is well-positioned to champion the ASEAN power grid through high voltage direct current (HVDC) lines and to power energy-intensive sectors like data centers with renewable energy sources. Siemens Energy is already engaged in multiple projects across the region aimed at supporting this transition.
Despite the regulatory hurdles that may lie in wait, the message is clear: the time for action is now. Businesses must pivot towards making their technologies commercially viable while investors should adopt a long-term perspective. The energy landscape in Malaysia is evolving, and with the right mix of policy reform, infrastructure investment, and a commitment to sustainability, the nation can carve a path toward a cleaner, more resilient energy future.
