Malaysia is on the cusp of a profound shift in its energy landscape. The country is in the midst of a renewable energy boom to reduce its dependence on fossil fuels. Until this day, as a net exporter of electricity, Malaysia still heavily depends on thermal resources, especially on coal, for electricity generation. The country possesses the world’s largest coal reserves. The government lacks the mining expertise to develop new mines, so it imports coal from Indonesia and Australia to meet its energy requirements.
In 2011, the Malaysian government embraced a bold agenda for renewable energy development. They understand that these options are needed to continue moving the nation’s power sector in a cleaner and more innovative direction. Solar and biomass energy have developed into key contributors in this shift. Solar photovoltaic (PV) technology sits at the forefront as the largest renewable power technology in Malaysia. At the same time, bioenergy—much of it derived from palm oil—has become the most widely deployed renewable energy technology.
The influence of these renewables-friendly efforts can be felt in Malaysia’s rapidly expanding renewable power generation. As a result, production more than doubled from 5 terawatt hours (TWh) in 2020 to 9.8 TWh by 2024. This remarkable growth represents a CAGR of 18.5%. Hydropower provides the backbone of energy infrastructure in eastern Sabah and Sarawak. Overall, it paints a very positive picture of the solar and wind takeover happening in these places.
The Malaysian government has made ambitious moves in its quest for sustainability. By 2035, it seeks to raise the renewable energy portion to 40% of total installed capacity. This goal is a necessary step towards fulfilling the nation’s commitments to reach net-zero emissions by 2050. A just transition forecasts estimate Malaysia’s cumulative renewable capacity will reach 30 gigawatts (GW) by 2035. This overall trend is propelled forward by an even more spectacular CAGR of 16.8% between 2024 and 2035!
One of the most important pieces of this transition’s foundation is net energy metering (NEM) policy. It allows customers to export excess electricity produced by their solar photovoltaic [PV] systems back to the grid, giving them a “one-for-one” offset. This policy drives local investments in solar installations and contributes to building greater energy efficiency and sustainability.
As Malaysia continues to navigate its energy challenges, the focus on renewable resources marks a crucial step toward a more sustainable and resilient power sector. Here, the federal government is taking proactive measures and engaging in strategic planning. Their focus is the production of a more diverse energy portfolio that reduces reliance on fossil fuels and increases energy security.