Malaysia’s National Energy Transition Roadmap Part 1

Renewable energy, led by solar PV technology, is at the heart of Malaysia’s newly released energy roadmap as the country targets to achieve 70% renewable energy share in its power mix by 2050. Among the major highlights of part 1 of the plan is a 1 GW hybrid solar plant which it touts as the largest facility of this kind in Southeast Asia.  

Global infrastructure investment manager I Squared Capital separately announced its portfolio company HEXA Renewables Malaysia will work on the 1 GW project under a memorandum of understanding (MoU) with the national sovereign wealth fund Khazanah Nasional Berhad’s green investment platform UEM Group Berhad, and Malaysian solar developer and EPC company ITRAMAS Corporation.  

The Peninsular Malaysia located solar project is the first of 10 flagship catalyst projects and initiatives to have been announced by the country under the National Energy Transition Roadmap (NETR) part 1.  

All 10 projects are expected to generate over MYR 25 billion ($5.5 billion) in investments and create some 23,000 jobs, according to government estimates.  

NETR cements the country’s renewable energy target revision from 40% in 2035 to 70% by 2050 that it announced in May 2023, up from 3.9% as of 2020. Back then, the Ministry of Economy announced an end to cross-border trade barriers for renewable energy as the nation positions itself as a major renewable energy exporter to its neighbors (see Malaysia Announces New Renewables Target).   

Malaysia is scaling its renewables target with an eye on multinational companies, especially RE100 companies to operate in the country.  

The ministry expects approximately MYR 637 billion ($140 billion) investment to achieve the 70% renewable energy target by 2050 which includes investment in solar expansion along with transmission grid and distribution network reinforcement. 

Under the roadmap, Malaysia plans to shell out MYR 80 million ($17.6 million) to install rooftop solar panels for government buildings. It will then be extended nationwide, covering offices, factories, multipurpose halls and other buildings, said the Economy Minister Rafizi Ramli.  

Households will be incentivized as well by leasing their rooftops for solar systems in return for a monthly income and lower their electricity bills. One among the catalyst projects is the construction of 4.5 MW solar capacity across 450 homes in the City of Elmina and Bandar Bukit Raja, distributed as up to 10 kW/house. It will facilitate rooftop leasing with offtake within the township by high-demand users from the commercial or industrial sector.    

Renewable energy zones (REZ) will be established for an integrated sustainable development along the entire energy supply chain, from generation and energy storage to demand management and consumption. A pilot REZ is in the pipeline comprising an industrial park, zero-carbon city, residential development and data center.   

Additionally, national utility Tenaga Nasional Berhad (TNB) will rope in small and medium enterprises (SME), cooperative and state economic development corporations to co-develop centralized large-scale solar (LSS) parks. Each park will have an installed capacity of 100 MW, across 5 sites in several states.    

TNB is also tasked with developing 2.5 GW of hybrid hydro-floating solar PV (HHFS) on its hydro dam reservoirs to ensure round-the-clock (RTC) clean power supply. It will save money on energy storage too.   

The government also wants solar energy for non-traction electricity use in rail operations as stations and depots.  

The complete text of NETR Part I is available on the ministry’s website.  

Part 2 of the NETR, to be released later, will focus on establishing the low-carbon pathway, national energy mix and emissions reduction targets, along with enablers needed for the energy transition.