01-44 Prospectus (FA) 1

Advancing Just
Energy Transition
Malaysia’s Sustainable Energy
Development Prospectus
ADVANCING JUST
ENERGY TRANSITION
Malaysia’s Sustainable Energy Development

Prospectus
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Contents
Malaysia Envisages to Advance A Just Energy Transition

for A Sustainable Future 05
03
Global Energy Landscape 06
Just Energy Transition: A Global Call to Climate Action 08
Malaysia’s Energy Landscape 10
Sustainable Energy Development 13
Advancing Just Energy Transition: Powering Up with

70 per cent RE by 2050 19
Sustainable Energy Programmes & Initiatives 22
Green Incentives to Advance Energy transition 25
New Energy and Other Alternatives 28
Interconnection and Regional Cross-border Power Integration 32
Skilled workforce 35
Logistics 37
Success Stories 39
ADVANCING JUST
ENERGY TRANSITION

Prospectus
04
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Malaysia Envisages to
Advance A Just Energy Transition
for A Sustainable Future
“Energy transition is
one of the initiatives to
restructure the Malaysian
economy under the
Ekonomi MADANI
framework.”
– Dato’ Sri Anwar Ibrahim
Prime Minister
05
“Our commitment to climate

mitigation is resolute, with a
clear focus on transforming our
energy system into one with
a lower carbon footprint. The
cornerstone of our strategy
lies in decarbonising our
power generation and supply
system through accelerating
renewable energy deployment
to 70 per cent in 2050.”
– Nik Nazmi Nik Ahmad
Minister of Natural Resources,
Environment and Climate Change
ADVANCING JUST
ENERGY TRANSITION

Prospectus
INTRODUCTION
Global Energy Landscape
GLOBAL ENERGY TRENDS SUGGEST A solution for global decarbonisation generation mix, with its share in
shift in the coming decades. Primary goals and natural gas serving as a generation capacity reaching 36.6
energy demand growth is expected transitional fuel in the energy transition. per cent in 2020. Renewables have
to slow to approximately one per outpaced conventional generation fuels
cent CAGR from 2018 to 2040 due to Electricity is anticipated to experience for new installed capacity additions
declining population growth in certain the fastest growth in final energy since 2012, accounting for 82 per cent
regions, slower economic growth, consumption, driven by industrial of capacity additions in 2020.
reduced energy intensity, and efficiency electrification, transportation
improvements. electrification, increased household In recent years, the pattern of
appliance usage, and rural investments has shifted the world
Renewables and natural gas are electrification. towards a more electrified, renewables-
expected to play a more significant rich energy system. The recovery
role in primary energy supply, with Globally, renewable energy (RE) is from the Covid-19 pandemic and the
renewables offering an affordable gaining prominence in the power response to the global energy crisis
have significantly boosted global clean
Annual investment in fossil fuels and clean energy, 2015-2023 energy investment.
billion USD (2022) According to IRENA’s World Energy

2
Clean energy Transitions Outlook 2023, the power
1.75 sector has seen good progress in
1.5 installed renewable capacity and
generation. Renewables represented
1.25
83 per cent of capacity additions and
1 installed power generation capacity
06 0.75
Fossi fuels
reached 40 per cent globally in
2022, with the addition of 295 gigawatts
0.5
(GW) of renewables, the largest-ever
0.25 annual increase in renewable energy
0 capacity.
2015 2016 2017 2018 2019 2020 2021 2022 2023
The robust economic justification for

Fossil Fuels Clean energy
IEA Licence CC BY 4.0
renewable energy, paired with favorable
policies, has led to a continuous rise in its
Source: IEA share of the global energy mix. However,
the deployment is heavily concentrated
300
in a select few countries and regions,
with China, the European Union, and the
New capacity New capacity United States contributing to 75 per cent
non-renewable (CW) renewable (GW)
of the total capacity additions.
Annual capacity installations (GW/year)
225
Although large-scale renewable energy
deployment is typically associated with
countries that have well-developed
power systems, deployment must be
150
expanded elsewhere, especially in
developing nations lacking electricity
access.
75
The new World Energy Outlook (WEO)
2023 from the International Energy
Agency (IEA) reveals significant changes
in the global energy landscape by the
0
end of this decade. The rapid growth
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
of clean energy technologies like solar,
wind, electric cars, and heat pumps
is transforming how the world powers
15% 28% 23% 38% 37% 52% 50% 59% 57% 82% 83% everything from home appliances to
factories and vehicles.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Five pillars to keep 1.5°C alive

Installed Energy intensity Fossil fuel Fossil Fuel Clean energy investment
renewables (GW) improvement demand (EJ) methane (Mt) in EMDE* (Tn USD)
12 000 5% 500 125 2.5

3x 3x
2x
9 600 4% 400 100 2.0

-25%
7 200 3% 300 75 1.5
4 800 2% 200 50 1.0

-75%
2 400 1% 100 25 0.5
2022 2030 2022 2030 2022 2030 2022 2030 2022 2030
*EMDE = Emerging market and developing economies
A comprehensive energy package for COP28 needs to drive the growth in clean energy,
support emerging and developing economies in the transition, and recognise the need to fossil fuel demand
Source: IEA
The report envisions a world in 2030 investments, and ensuring a structured

with 10 times as many electric cars decline in fossil fuel use, including
on the road, solar power generating halting new coal-fired power plants.
more electricity than the current
entire US power system, renewables The WEO-2023 is framed by conflict
accounting for nearly 50 per cent of and uncertainty, mainly due to the
global electricity, electric heating situation in Ukraine and the Middle
systems outselling fossil fuel boilers, and East. This instability underscores the
three times as much investment going vulnerabilities of relying on fossil fuels
into new offshore wind projects than and the benefits of transitioning to 07
into new coal- and gas-fired power a more sustainable energy system
plants. All these increases are based for energy security and emissions
only on the current policy settings of reduction.
governments worldwide.
The report highlights that clean energy
The increasing momentum behind projects face challenges in some
clean energy technologies and global markets, including cost increases,
economic shifts have significant supply chain bottlenecks, and higher
implications for fossil fuels, with the borrowing costs. However, clean energy
first-ever visible peaks in global remains the most dynamic part of
demand for coal, oil, and natural gas global energy investment. The pace
this decade based on current policies. of its growth in the coming years will
This presents a crucial opportunity to significantly influence the trajectory of
reduce the share of fossil fuels in the global energy systems across different
global energy supply, decreasing from scenarios.
80 per cent to 73 per cent by 2030, while
global energy-related carbon dioxide The global energy crisis has highlighted References
(CO2) emissions are expected to peak the importance of an affordable, IEA. (2023). Annual investment in fossil fuels
and clean energy, 2015-2023. IEA: Paris. https://
by 2025. reliable, and resilient energy supply, www.iea.org/data-and-statistics/charts/
particularly in developing economies annualinvestment-in-fossil-fuels-
However, the current demand for fossil with growing energy demands. Energy andcleanenergy-
2015-2023, IEA. Licence: CC BY 4.0
fuels remains too high to meet the Paris transitions emphasise electrification
Agreement’s goal of limiting global and technologies like wind, solar PV, IEA. (2023). World Energy Outlook 2023.
temperature increases to 1.5°C, posing and batteries, emphasising electricity IEA: Paris. https://www.iea.org/reports/
worldenergy-outlook-2023, License: CC BY 4.0
risks of worsening climate impacts and security and diversified clean energy (report); CC BY NC SA 4.0 (Annex A)
energy system vulnerabilities. supply.
IRENA. (2023). World Energy Transitions Outlook
2023: 1.5°C Pathway, Volume 1, International
To address this, the WEO-2023 proposes Emerging markets and developing
Renewable Energy Agency, Abu Dhabi.
a global strategy focusing on five economies play a significant role,
key pillars: tripling global renewable accounting for a substantial portion SEDA Malaysia. (2021). Malaysia Renewable
capacity, doubling energy efficiency of global electricity demand growth Energy
Roadmap. https://www.seda.gov.my/reportal/
improvements, reducing methane across different scenarios. • wp-content/uploads/2022/03/MyRER_
emissions, increasing clean energy webVer3.pdf
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Just Energy Transition:

A Global Call to Climate Action
08
ENERGY PLAYS A CENTRAL ROLE IN THE Therefore, to avert the most severe Amidst escalating climate change
climate challenge, both a significant consequences of climate change, the impacts, the need for a Just Energy
part of the problem and a critical part world must reduce emissions by almost Transition has never been more critical.
of the solution. half by 2030 and ultimately achieve net This global initiative underscores the
zero emissions by 2050. urgent shift to sustainable energy
The issue is clear: a substantial portion practices, emphasising a shared
of the greenhouse gases responsible To realise this imperative, it must responsibility to combat climate
for warming our planet result from transition away from fossil fuel and change. Embracing cleaner and
our conventional energy production strategically invest in alternative energy renewable energy sources aligns with
methods, primarily centred around sources that offer environmental goals to reduce emissions and build a
the combustion of fossil fuels to create responsibility alongside accessibility, sustainable, low-carbon future. The Just
electricity and heat. cost-efficiency, sustainability, and Energy Transition calls on nations to
reliability - a cleaner and sustainable collaborate in forging a greener, more
According to the Production Gap Report energy or the renewable energy (RE). resilient planet .•
2019, fossil fuels are, by far, the most
significant contributor to global climate Being naturally replenished by
change, accounting for over 75 per cent environmental processes, renewable
of global greenhouse gas emissions energy sources emit minimal to no
and nearly 90 per cent of all carbon greenhouse gases or pollutants into
dioxide emissions. the atmosphere.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Why Should the World Transition Towards Clean and Sustainable Energy?
1 Accessibility and
Availability of
3 A Healthier
Option
5 Economic
Viability
Resources a. About 99 per cent of the world’s a. In 2022, approximately US$7 trillion
a. Approximately 80 per cent of the population breathes air exceeding was spent on subsidising the fossil
global population, or roughly 6 billion quality limits, resulting in over 13 fuel industry, while to achieve net-
people, reside in countries that rely million avoidable deaths annually zero emissions by 2050, an annual
on fossil fuel imports, exposing them due to environmental causes, investment of about US$4 trillion in
to geopolitical vulnerabilities and including air pollution. sustainable energy is needed until
crises. b. Fossil fuel-related air pollution in 2030.
b. In contrast, sustainable energy 2018 incurred significant health and b. While transitioning to sustainable
sources are accessible in all nations, economic costs, totalling US$2.9 energy may seem costly for
with substantial untapped potential. trillion, or roughly US$8 billion daily. resource-limited countries, the
c. Sustainable energy provides Switching to clean energy sources benefits are significant. Reduced
a solution to reduce import like wind and solar can address pollution and climate impacts alone
dependence, enabling countries to climate change and air pollution, could save the world up to US$4.2
diversify their economies and shield improving public health. trillion annually by 2030.
them from the unpredictable price c. Efficient and reliable renewable
fluctuations of fossil fuels. technologies can enhance
energy system resilience, reduce
4
09
2 Cost
Effectiveness
Job & Employment
Opportunities
vulnerability to market shocks, and
improve overall energy security
through diversified power supply
a. Renewables-based electricity is now a. Renewable investments create options.
the cheapest power option in most three times more jobs than fossil
regions, with declining technology fuels, with an estimated net gain
costs. of 9 million jobs in the clean energy
b. Cost-effective renewables-based sector by 2030.
electricity could provide 65 per cent b. The transition to net-zero emissions
of the world’s total electricity by 2030 could generate over 30 million jobs
and decarbonise 90 per cent of the in clean energy, efficiency, and low-
power sector by 2050, significantly emissions technologies by 2030,
reducing carbon emissions to emphasising the importance of a
combat climate change. just transition to ensure equitable
c. Although solar and wind power benefits for all.
costs may temporarily rise in
2022 and 2023 due to elevated
commodity and freight prices, they
remain competitive, especially in
comparison to gas and coal,
according to the International
Energy Agency (IEA).
References
United Nations. (n.d). Renewable Energy
- Powering a Safer Future. https://www.
un.org/en/climatechange/raising-ambition/
renewable-energy
SEI, IISD, ODI, Climate Analytics, CICERO,

and UNEP. (2019). The Production Gap: The
discrepancy between countries’ planned
fossil fuel production and global production
levels consistent with limiting warming to
1.5°C or 2°C. http://productiongap.org/
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Malaysia’s
Energy Landscape
MALAYSIA’S ENERGY LANDSCAPE has Despite its traditional reliance on fossil
long been dominated by fossil fuels, fuels, Malaysia recognises the untapped
primarily oil and natural gas, which have potential of renewable energy. Policies
accounted for over 95 per cent of the since the 2010s have laid the groundwork
total energy mix. The country’s reserves for increased capacities, especially in
are dispersed across Peninsular solar PV. The nation aims to surpass the
Malaysia, Sabah, and Sarawak, with a 40 per cent renewable energy target
significant reliance on imported coal by 2035, extending beyond electricity
for power generation. generation to encompass the transport
and industry sectors.
Despite historical fuel subsidisation
policies, recent reforms aim to strike Aligning with global climate goals,
a fiscal balance. Future plans include Malaysia’s commitment to reducing
replacing aging coal and gas units emission intensity by 45 per cent by
with additional gas-fired plants, 2030 and achieving net-zero emissions
coupled with efforts to expand solar PV earliest by 2050 is outlined in its
capacity. The nation is at a crossroads, Nationally Determined Contribution
contemplating whether to continue (NDC) under the Paris Agreement.
on its current trajectory or accelerate
its energy transition, considering the Looking ahead to 2050, Malaysia
volatility in coal and gas prices. anticipates a 60 per cent increase in
primary energy supply to 6.7 EJ, driven
As of 2021, the country boasts a total by a growing population and nearly
installed electricity generation capacity tripled economy. Energy demand is
10 of 33 GW, with coal and natural gas projected to grow by 1.4 per cent per
each contributing around one-third. year until mid-century.
Plans for the next decade involve
replacing aging coal and gas units In the envisioned low-cost, low-
with additional gas-fired plants and carbon future, Malaysia envisions
a concerted effort to boost solar PV a shift from fossil fuel dominance to
capacity. deep electrification across all sectors.
This includes scaling up renewable
resources like bioenergy, geothermal,
and hydrogen. The power sector would
In the envisioned low-cost, low-carbon future, witness significant transformation,
with scenarios exploring 100 per cent
Malaysia envisions a shift from fossil fuel renewable energy or a mix with carbon
dominance to deep electrification across all capture and storage (CCS).
sectors. This includes scaling up renewable Current and

Future Energy Trends
resources like bioenergy, geothermal, and Between 2010 and 2019, Malaysia’s total
hydrogen. The power sector would witness primary energy supply increased 3 per
significant transformation, with scenarios cent annually on average, driven by
strong economic and industrial growth
exploring 100 per cent renewable energy or a as well as rapid urbanisation.
mix with carbon capture and storage (CCS).“ As of 2019, Malaysia’s primary energy
supply was dominated by natural gas
(42 per cent), followed by crude oil and
petroleum products (33.3 per cent),
coal (21.4 per cent), and renewables
(3.4 per cent). The share of renewables,
primarily hydropower, is expected to
grow, reaching around 3.4 per cent by
2050.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Industry
2
Transport
Buildings
EJ
Non-energy Use
1
Agriculture
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: ST, 2022a
Total final consumption in Malaysia, by sector, 2010 to 2019
11
Long-term economic and population supply. Transport sector emerged as by biodiesel with a 1.5 per cent share
projections indicate that Malaysia’s the largest consumer, devouring 38 per in the transport sector. Electricity,
energy demand will continue to grow. cent of the total final energy. encompassing 20 per cent of total
In the past two decades, energy final consumption, played a pivotal
demand has grown by around 3 per While heating demand and per capita role. Over 80 per cent of residential
cent per year, and growth is estimated electricity consumption in households and commercial buildings relied on
to average around 1.4 per cent per were relatively low, buildings contributed electricity, covering half of the nation’s
year until mid-century. Malaysia is around 12 per cent to the overall energy total electricity demand, while the
traditionally a fossil fuel producer with demand. Notably, a staggering 70 remaining half fueled the industrial
large reserves of oil and natural gas. per cent of households owned air sector.
Although it remains a net exporter of conditioners, emphasizing a substantial
gas and oil, its coal imports have been cooling demand. Malaysia’s final energy consumption per
increasing to meet the growing energy capita in 2020 has expectedly reduced
demand. Examining energy sources, oil products to 1.755 toe per capita, a reduction of
took center stage in 2019, constituting 66 14.0 per cent from the previous year. The
To meet rising energy demand, per cent of Malaysia’s total final energy final energy intensity too has dropped
Malaysia faces a pivotal decision: consumption. Transport emerged as from 46.68 toe/RM Million to 42.5 toe/RM
continue relying on diminishing oil and the primary consumer, absorbing Million. This however indicate a positive
gas resources, potentially becoming a three-quarters of the oil, with the rest improvement in the energy efficiency.
net importer, or embrace renewable channelled into various industrial Looking ahead, Malaysia’s energy
energy alternatives. Transitioning to applications. Natural gas followed consumption is anticipated to nearly
renewable energy, as suggested by closely, claiming a 29 per cent share, double by 2050, projecting a 2.0 per
the report’s 1.5°C Scenario, could save whereas coal played a minor role at 3 cent annual growth rate, driven by
the country between USD 9 billion and per cent, primarily utilized in the power urbanization and economic expansion.
USD 13 billion annually in energy, climate, sector. Industries predominantly relied
and health costs. on natural gas and oil for process heat Power generation and
generation. installed capacity
Malaysia’s total final energy Total installed capacity in Malaysia for
consumption of 2.8 exajoules (EJ) in Despite Malaysia’s potential for 2020 was 35,037 MW and it increased
2019 constitutes a significant portion of renewables, direct usage accounted for to 40,211MW in 2022. Natural gas and
65 per cent, of the total primary energy a mere 1 per cent, primarily represented coal are the dominant fuel, making up
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Coal
Coal Diesel 32.9%
0.5% Natural Gas
44.5% 39.6%
RE:
Hydropower
15.3% RE:
Distibuted Diesel
Generation 3.0%
Natural Gas 10.35%
38.6%
RE:
RE: 0.71% Solar 6.6%
Hydropower
Distibuted 14.2%
Generation
1.1% 0.11% Biogas 0.4%
16.4% 0.12% Mini Hydro 1.3% 24.5%

(28,200GWh) (9.856MW)
Generation 0.16% Biomass 2.0% Installed Capacity
12
Installed capacity and generation mix
of three-quarters of the total installed cent. This was followed by natural gas
capacity in Malaysia. RE capacity at 28.8 per cent, hydropower at 16.3 per
totalled up to 24.5 per cent in 2022, cent, renewables at 1.6 per cent and
which is an increase from 23.2 per cent oil at 0.4 per cent. The total electricity
in 2020. This is a positive indication that consumption stood at 152,250 GWh in
we are on track to achieve our national 2020, which showed a reduction of 4.0
target of 31 per cent RE in the capacity per cent from the 2019.
mix by 2025.
Malaysia’s electricity capacity is divided
The total electricity generation between independent power producers
(excluding self-generation plants) in (IPPs) and Tenaga Nasional Berhad
2020 was recorded at 167,742 GWh, (TNB). The nation operates three major
a reduction of 2.3 per cent from 2019 grids in Peninsular Malaysia, Sabah,
level which was at 171,672 GWh. Coal and Sarawak, each facing unique
is the dominant fuel used to generate challenges and opportunities in the
electricity with its share of 53.0 per transition to cleaner energy. •
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Sustainable
Energy Development
MALAYSIA HAS VAST UNTAPPED (above 100MW); whereby 3.1 GW is
potential RE sources that can provide identified in Peninsular Malaysia,
local and affordable alternatives to 493 MW in Sabah, and 10 GW in
fossil fuels. Sarawak
The nation’s journey into RE began in • 3.6 GW resource potential for

1999 when it was recognised as the bioenergy, including biomass (2.3
“fifth fuel,” a crucial component in GW), biogas (736 MW), municipal
diversifying its energy mix. In Peninsular solid waste (516 MW)
Malaysia, RE encompasses solid
waste, small hydropower, biomass, • 2.5 GW resource potential for small
biogas, geothermal, and solar energy hydro (up to 100 MW)
sources.
• 229 MW of geothermal resource
Renewable Energy potential
Resource Potential
A review of Malaysian RE resource The RE technical potential assessment
potential has been conducted, leading considered among others:
to the identification of the following • Malaysia’s advantageous
resource potential: geographical location offers
• 269 GW potential for solar PV, abundance of indigenous natural
dominated by ground-mounted resources, readily available to be
configurations (210 GW), including utilized for RE power generation.
considerable potential from rooftop Malaysia’s proximity to the equator
(42 GW) and floating configurations provides strong solar irradiance in 13
(17 GW) the range of 1,575 – 1,812 kWh/m2
throughout the year, comparable
• Close to 13.6 GW (13,619 MW) to countries with more mature and
resource potential for large hydro developed solar PV markets;
10
Biogas
GW
5
Renewable
4 municipal
waste
3
Solid biofuels
2
Hydropower
1 Solar
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Malaysia’s total installed renewable energy capacity, 2010 to 2021

ADVANCING JUST
ENERGY TRANSITION

Prospectus
Peninsular
Malaysia
Total Malaysia
Solar PV 269.0 GW
Large Hydro 13.6 GW
Bioenergy 3.6 GW
Small Hydro 2.G GW 99.4 GW
137.5 GW
Geothermal 0.2 GW
Sabah 0.6
1.7 0.5 GW
GW GW
162 67
MW 0.8
GW MW
2.2 GW 3.1 GW
32.1 GW
0.2
0.6 GW Sarawak
GW
10.0 GW
14
Solar PV (includes ground Bioenergy (includes agriculture, Small hydro Large hydro Geothermal
mounted, rooftop and animal and municipal & (system size (system
floating installation) hazardous waste) up to 100 MW) size > 100 MW)
RE resource potential in Malaysia
• The potential in approximately municipal solid waste, an estimated

450 palm oil mills across Malaysia, average of 9.5 million tons of solid
processing an average of 95.5 waste were generated every
million tons of fresh fruit bunch year. This can potentially be used
(FFB) annually, in which the waste for bioenergy power generation,
from palm oil processing can be leveraging waste-to-energy (WTE)
utilized as feedstock for bioenergy technologies; and
power generation, either through
biomass combustion or biogas • 189 river basins which can support
capture technologies; small hydro power generation.
• Available agricultural and Growth of Renewable Energy

husbandry residues from rice Over the years, various strategies,
production, wood processing and initiatives, and programmes have been
animal waste which can be used introduced, fostering the growth of RE
for power generation; technologies from 2001 to 2025.
• Growth in population and Under the Eighth Malaysia Plan

urbanization in Malaysia contributes (2001-2005), the Small Renewable
to the increase in production of Energy Power (SREP) Programme was
ADVANCING JUST
ENERGY TRANSITION

Prospectus
introduced, along with the Biomass of RE capacity in Malaysia has been

Power Generation and Cogen Full substantial, from a base of 53 MW
Scale Model Demonstration (BIOGEN) of RE connected to the grid (without
Project, leveraging the readily available large hydro) between 2001-2009 to
oil palm-based by-products for small- a total installed capacity of 1.6GW
scale electricity generation. between 2011-2015. By December 2020,
cumulative RE capacity had reached
Ninth Malaysia Plan (2006-2010) 2.8 GW, or 8.45 GW with the inclusion
recorded further progress, with the of all RE resources.
development of rooftop solar becoming
prominent through the Malaysia Building The Twelfth Malaysia Plan (2021-
Integrated Photovoltaic (MBIPV) Project. 2025) focuses on advancing green
The MBIPV project focused on the policy growth as well as enhancing energy
development for gridconnected PV sustainability and transforming the
system, market and incentive measures water sector. The next five years will see
and capacity building programme for a nationwide shift to more sustainable
rooftop solar. economic practices and lifestyles
that value natural endowments and The initiative to
The programmes and projects environmental health. promote RE growth
implemented under the 8th and 9th plan
led to the subsequent development of In the 12th Plan, green growth will be progressed further
the National RE Policy and Action Plan augmented to achieve sustainability under the Eleventh
(NREPAP) in 2010; aiming to establish and resilience. In this regard, the need to
a policy guide for RE development in share responsibility in moving towards a Malaysia Plan
15
Malaysia. NREPAP further paved the low-carbon nation will be emphasised, (2016-2020). Solar
path for RE development in the Tenth while more equal benefit sharing from
Malaysia Plan (2011 – 2015), as one of the utilisation of natural resources will auctioning and
the key new areas of growth for the be promoted. Energy will be managed rooftop solar quota
energy sector. holistically and sustainably, taking into
account its supply and demand along were released for the
During this period, the Renewable Energy
Act 2011 (Act 725) and the Sustainable
the value chain. The energy sector will
address the energy trilemma, ensuring
very first time through
Energy Development Authority Act energy security, reliability, sustainability the Large Scale Solar
2011 (Act 726) were enacted, leading
to the establishment of Sustainable
and affordability for all. (LSS), Net Energy
Energy Development Authority (SEDA) The effective execution of policies and Metering (NEM) and
Malaysia as the designated authority
for RE development in Malaysia. The
strategies will contribute to sustainable
and resilient growth as well as the
SelfConsumption
Feed-in Tariff (FiT) scheme was also achievement of the 2030 Agenda. (SELCO) Programme.“
introduced and implemented in 2011 to
catalyse the growth of grid-connected Establishing robust RE policies and
RE in Peninsular Malaysia, Sabah and agencies in the 2010s has led to
Labuan. substantial growth in solar photovoltaic
(PV) installed capacity and other
The initiative to promote RE growth renewables. However, Malaysia must
progressed further under the Eleventh further accelerate solar PV adoption
Malaysia Plan (2016-2020). Solar to surpass the 40 per cent target for
auctioning and rooftop solar quota were RE capacity by 2035. Additionally, it’s
released for the very first time through essential to extend RE goals to sectors
the Large Scale Solar (LSS), Net Energy like transportation and industry, which
Metering (NEM) and SelfConsumption continue to rely heavily on fossil fuels.
(SELCO) Programme.
Despite the growth, renewable energy
By the end of the 11th Plan, the growth still represents only 3.4 per cent of
ADVANCING JUST
ENERGY TRANSITION

Prospectus
• Establishment
of the Sustainable
Energy Deve-
lopment Authority
Act.
• Enactment of
1990 2010 2015

the Energy • Introduction of
Commission the Renewable
Act. Energy Act.
2001 2011
• Amendment
• Introduction of • Introduction
to the Electricity
the Electricity of the National
Supply Act.
Supply Act. Renewable
• Introduction
Energy Policy
of the National
and Action Plan.
Energy
Efficiency Action
• Introduction
Plan.
16 of the Malaysia
New Energy
Policy.
the total primary energy supply as of Malaysia aims to elevate its RE growth
2019, primarily driven by traditional from 23 per cent or 8.45 GW of installed
hydropower resources. power capacity.
The Ministry of Natural Resources, The Malaysia Renewable Energy

Environment, and Climate Change Roadmap (MyRER) envisions achieving
(NRECC) oversees electricity supply, 31 per cent or 12.9 GW in 2025 and 40
focusing on optimising RE and energy per cent or 18.0 GW in 2035.
efficiency, shaping policies, and
enforcing regulations. This roadmap aligns with Malaysia’s
commitment to reducing greenhouse
The Energy Commission (Suruhanjaya gas emissions under the Paris
Tenaga) in Peninsular Malaysia and Agreement, aiming for a 45 per cent
Sabah manages electricity and gas reduction in carbon intensity by 2030
issues, promotes RE use, ensures compared to 2005 levels. Realising
competition, and collaborates with these objectives is vital for meeting the
the Sustainable Energy Development Nationally Determined Contributions
Authority (SEDA) on FiT implementation. (NDC) targets established by the United
Nations Framework Convention on
Climate Change (UNFCCC).
ADVANCING JUST
ENERGY TRANSITION

Prospectus
• Development of
the National
Biomass Industry
Action Plan, aiming
for energy-
intensive industries • Introduction
2017 2021 2023

to increase the of the National
share of biomass Energy Policy
in their energy use. 2022-2040.
2020 2022
• Launch of the • Introducing • Introduction of the
Green Tech- the Malaysia National Energy
nology Master Renewable Transition Roadmap
Plan, outlining the Energy Roadmap (NETR).
strategic actions (MyRER) outlines
in propelling strategies and an
green technology action plan to
development in achieve a 40 per
17
Malaysia. cent RE installed
capacity target
by 2035.
Policies on Renewable Energy update existing policies on RE, leading systems in government buildings
The discussion on electricity market to the following decisions:
reform has been an ongoing exercise • Increase the target for installed RE • Allow cross-border RE trade through
within the NRECC and related energy capacity from 40 per cent in 2040 the establishment of an electricity
agencies. Specifically, the future to 70 per cent by 2050. The higher exchange system.
electricity market reform can introduce target is expected to generate
competitive pricing, increase customer new economic opportunities by Within the whole-of-nation approach,
choice and satisfaction, and spur attracting multinational companies, new policies and strategies have
further economic activity in the sector. especially RE 100 companies, to steadily developed to complement
operate in Malaysia NETR in strengthening Malaysia’s low-
Over the years, Malaysia has carbon transition.
implemented significant energy policies • Expand RE development based on
and regulations to shape its energy the concept of a self-contained Among others include:
landscape. system to encourage investment • the Nationally Determined
in the RE value chain and diversify Contribution (NDC) Roadmap, Long-
Review of Renewable RE programmes according to the Term Low Emissions Development
Energy Policies principle of willing buyer, willing Strategies (LT-LEDS) and Future
In line with the development of the seller Proofing MESI by the NRECC
NETR, the Ministry of Economy has also
collaborated with NRECC to review and • Scale up the installation of solar
ADVANCING JUST
ENERGY TRANSITION

Prospectus
• the Carbon Pricing Instrument per cent RE capacity by 2025 and has
developed by the Ministry of Finance expressed its commitment to reaching
(MOF) net zero emissions by 2050.
• the National ESG Industry Framework, To attain this goal, TNB is implementing
the New Industrial Master Plan a sustainable approach, including a 35
(NIMP) and the Chemical Industry per cent reduction in emission intensity
Roadmap (CIR) by the Ministry of and a 50 per cent reduction in coal
Investment, Trade and Industry generation capacity by 2035.
(MITI)
Other initiatives from the government
• the Hydrogen Economy and include the use of the Incentive-
Technology Roadmap (HETR) by Based Regulation (IBR) mechanism
the Ministry of Science, Technology (a tariff price-setting mechanism
and Innovation (MOSTI) for affordable and secure energy
supply in a deregulated market),
• the National Biomass Action Plan an optimal generation expansion
by the Ministry of Plantation and plan (to improve service reliability at
Commodities (KPK). minimal cost), least-cost dispatch
(to promote market liberalisation to
Each utility company in Malaysia has reduce transmission and distribution
also formulated its strategic plans costs) and fuel portfolio diversification
18 for the future. TNB, serving Peninsular (to balance affordable electricity and
Malaysia, has set a target to achieve 20 energy security).•
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Advancing Just Energy Transition:

Powering Up with 70 per cent RE by 2050
MALAYSIA IS COMMITTED TO electricity sector, working towards the

sustainable, low-carbon development, 2035 milestone. The initiative anticipates
with a clear vision for reshaping its a significant reduction in GHG emissions
economic landscape. In line with the within the power sector, aligning with
Paris Agreement, the nation’s latest Malaysia’s NDC 2030 target of a 45
Nationally Determined Contribution per cent decrease in economy-wide
(NDC) submission seeks to achieve an carbon intensity compared to the 2005
impressive 45 per cent unconditional level.
reduction in emission intensity by 2030
compared to 2005 levels. This scenario projected by MyRER is
poised to create significant job and
The country has set its sights on investment opportunities in the RE
achieving net zero emissions by as sector, with a cumulative investment of
early as 2050, as emphasised in its RM19.93 billion and 28,416 jobs projected
most recent National Energy Policy. by 2025, excluding employment related
It is actively preparing a Long-Term to the RE equipment manufacturing.
Low Emission Development Strategy Post-2025, the ongoing deployment
(LT-LEDS) to solidify its path toward of RE is expected to sustain socio-
sustainability. economic impacts through 2035, with
an estimated cumulative investment
In pursuit of this ambitious goal to of RM33.07 billion and 46,636 jobs in
achieve net zero emissions by 2050, the RE sector.
Malaysia is committed to prioritising 19
low-carbon and climate-resilient The Increase of RE Target
measures within its development In May 2023, the government reaffirmed
strategies to create a more efficient its commitment to unlock economic
and sustainable economic landscape. opportunities through a low-carbon
transition, setting out the ambitious
As part of this commitment, the country target to achieve 70 per cent RE installed
has established an ambitious RE target. capacity in the power mix by 2050.
MyRER is designed to craft a national
strategic plan guiding Malaysia’s The National Energy Transition Roadmap
renewable energy policy development, (NETR) aims to reinforce this ambition
aiming for a 31 per cent RE share in the and inform an accelerated RE rollout by
national capacity mix by 2025 and affirming two essential targets:
40 per cent by 2035. It supports the • Target 1: 70 per cent RE installed
ongoing decarbonisation of Malaysia’s capacity share by 2050
17,996 MW
RE Share 2034 40%
Biogas Biomass Solar

406 MW 998 MW 7,280 MW
Large Hydro
8,062 MW Solar penetration
2035
Small Hydro Geothermal
1,219 MW 30% of peak
30 MW demand
RE Capacity Mix to achieve the target in 2035

ADVANCING JUST
ENERGY TRANSITION

Prospectus
Installed Capacity (GW) 97
Solar Growth 82
+14% CAGR
68
58%
56 52%
49 39%
46 25%
12% 14%
14% 1% 16% 1% 15% 1% 12% 1% 11%
11% 1%
3% 2% 2% 2% 1%
0% 0%
42%
43%
46% 38% 36% 29%
29% 23%
11% 9% 1% 0%
2025 2030 2035 2040 2045 2050
PV Hydro Bioenergy Oil Gas Coal
Projected power system installed capacity mix 2050
• Target 2: No new coal power plant • Gas is expected to act as a

lower-carbon transition fuel away
In alignment with these strong RE from baseload coal, and will be
20 ambitions, an accelerated pathway is the dominant source of fuel for
needed to scale RE uptake in Malaysia baseload power.
over the next three decades.
• The ambition to achieve 70 per cent
With the government’s strategic intent RE share of installed capacity by
on energy transition, the dynamics 2050 is expected to be achieved,
of Malaysia’s future power mix shall predominantly driven by solar
progress along this pathway: PV installation. Significant solar
• Renewables will constitute the capacity growth is required in the
majority share of installed capacity next three decades, with 59 GW of
by 2050. However, the contribution installed capacity by 2050.
of RE to the total generation mix
will be comparatively lower than By 2050, approximately ~200,000 jobs
fossil fuels, particularly natural are anticipated to be generated within
gas. This reflects the inherent low- the power sector.
capacity factor associated with
solar, compared against the high- Sustainable Agenda
capacity factor of gas. and Energy Transition
Under the NETR, the government is
• The share of coal-fired power determined to accelerate the transition
generation is expected to ramp to clean energy, ensuring a consistent
down over time, driven by natural and sustainable supply for all. This vision
retirement timelines of existing involves expanding renewable energy
coal-fired power plants. No new generation, the widespread installation
coal-fired power generation will of solar panels on government buildings,
be developed, leading to almost and implementing policies facilitating
complete phase out by 2045. renewable energy trading through the
electricity market system.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Investment Value
Areas
(RM billion)
Capacity & Generation Development 370
Development & Strengthening of Network 184

and Grid Infrastructure
Grid Energy Storage System Integration 50
Carbon Capture, Utilisation & Storage 33

Total 637
Projected Investment: Malaysia Energy Transition for the power sector in 2050
The policy on cross-border RE trading, Furthermore, providing accurate data

as announced by the government and comprehensive reports is vital
in May 2023, will be executed via the to assess and account for carbon
government-developed electricity emissions in line with international 21
exchange system. This system facilitates best practices. These collective efforts
the exchange of surplus RE generation underscore Malaysia’s determination
capacity with regional neighbours, to lead the sustainability agenda,
contributing to the advancement of positioning the country as a frontrunner
the ASEAN Power Grid (APG). among developing nations.
The government is also pioneering in This strategic approach underscores

promoting the hydrogen economy and Malaysia’s commitment to a sustainable
CCUS, offering incentives to stimulate energy future and a significant move
the growth of these green technologies. toward achieving its carbon reduction
goals.
Aligned with its long-term commitment
to environmental sustainability, the To realise the just energy transition in
government will further encourage 2050, Malaysia’s power sector requires
businesses to adopt Environmental, a total investment of RM637 billion. This
Social, and Governance (ESG) principles, includes RM370 billion for Capacity &
enhancing their competitiveness to Generation Development, RM184 billion
meet global standards. for the Development & Strengthening of
Network and Grid Infrastructure, RM50
These initiatives involve the billion for Grid Energy Storage System
development of essential policies and Integration, and RM33 billion for Carbon
regulatory frameworks, accompanied Capture, Utilisation & Storage. •
by substantial funding to support green
growth and the transition to a low-
carbon economy.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Sustainable Energy
Programmes & Initiatives
KEY SUSTAINABLE ENERGY generated under SELCO cannot be
PROGRAMMES exported to the grid, and owners do
Since 2012, sustainable energy not receive compensation for excess
development in Peninsular Malaysia energy. However, users benefit from
and Sabah has been supported through a streamlined installation process, as
several main programmes: Feed-in power system studies are not required
Tariff scheme (FiT), Large Scale Solar for systems up to 425 kWac.
auction (LSS), Net Energy Metering (NEM)
, Self-consumption (SELCO), Corporate As of the latest available data, the total
Green Power Programme (CGPP) and installed capacity under SELCO for
Green Electricity Tariff (GET). The current renewable energy sources in Malaysia
total operational renewable energy is 321.3 MW. Biomass contributes the
capacity in Malaysia is 3,386.58 MW. majority, followed by solar, biogas, and
mini-hydro.
1. Self-Consumption (SELCO)
The SELCO scheme allows for self- 2. Net Energy Metering (NEM)
generation of electricity through the The NEM programme was introduced to
installation of electrical generators continue to spur the industry. Currently
based on renewable sources. on its third installation, NEM 3.0 offers
Introduced in Malaysia in 2017, it three different categories to ensure
enables individuals or businesses equal opportunities for every sector
to produce electricity for their own in contributing towards reducing their
consumption. Notably, electricity carbon footprint.
NEM Rakyat for domestic consumers,
22 NEM GoMEn for government buildings,
and NEM NOVA for commercial buildings
Corporate Green Power Programme (CGPP) categories were launched in 2021 and
have received a favourable response
Energy supplied to EUC by SPP Energy supplied from the public.
based on NEDA Rules by EUC to CC
As of December 31, 2022, 11,505 projects
with an installed capacity of 518.28MW
were approved. Eighty-three per cent of
the installed capacity was contributed
Price Price by applications from the NOVA initiative
payable to SPP Electricity Utility payable to EUC with 430.01MW, followed by NEM Rakyat
based on SMP Company based on normal with 59.68MW and NEM GoMEn with
tariff rate
28.59MW. 46.2 per cent of the approved
projects are now fully commissioned,
proving the feasibility of the solar
Price for Renewable Energy Certificate
project’s installation and signalling the
(if applicable)
shift towards a greener Malaysia.
3. Large Scale Solar (LSS)

The introduction of LSS auction in 2016
has resulted in the addition of 857 MW
or 56 per cent to the total solar PV
*settlement of the difference between Corporate installed capacity as of the end of 2020.
Solar Power the SMP & the energy price based on
Producer Consumers LSS is designed to support the uptake of
terms and conditions in CGPA
utility-scale solar PV systems with 1-100
EUC Electricity Utility Company (TNB) MW capacities in Malaysia.
*SMP > Energy Solar Power Producer pays SPP Solar Power Producer
Price to Corporate Consumer CC Corporate Consumer
The scheme uses a reverse auction
NEDA New Enhanced Dispatch Arrangement
*SMP < Energy
Price
Corporate Consumer pays
Solar Power Producer SMP System Marginal Price system to award LSS rights based on
CGPA Corporate Green Power Agreement the lowest bid for off-take prices. The
minimum system capacity of LSS plants
is 1 MW, while the maximum system
ADVANCING JUST
ENERGY TRANSITION

Prospectus
How Net Energy Metering Works?
Any excess energy produced in a month

which is not consumed by the NEM
Consumer may be exported via the Supply
System to the Distribution Licensee
NEM RAKYAT, NEM GOMEN

& NOVA Category A
RM
Value of the exported energy shall be credited

to the account of the NEM Consumer to be used
to offset the bill payment for the next Billing Period.
Any excess energy produced in a month

which is not consumed by the NEM
Consumer may be exported via the
Supply System to the Distribution Licensee
NOVA Category B
Value of the exported energy shallbe credited to
the account of such Designated Premises to be used to RM
offset the bill payment for the next billing period.
23
capacity has varied depending on the • LSS 2 was held in 2017 for 526 MW, mechanism for solar PV68.
auction tranche, ranging from 30 MW with the lowest bid submitted at MYR
to 100 MW. As a result of the reverse 0.34 / kWh, a 13 per cent reduction As of 2022, 1,463.06MW was approved
auction system, competition between from LSS 1; under the FiT mechanism, which
developers has pushed off-take solar • LSS 3 was held in 2019 for 490.88 MW, equals 10,505 projects for solar, biogas,
prices down by 13 per cent between with the lowest bid submitted at MYR biomass, and small hydropower
2016 and 2017. Solar prices may soon 0.17 / kWh, a 50 per cent reduction resources. With its positive impact in
reach grid parity or even lower levels if from LSS 270; and developing the sustainable energy
this trend continues. • LSS 4 was held in 2020 for about market and reducing the carbon
1,000MW with the lowest bid at MYR footprint in the electricity sector, the
Before LSS auctions, 250 MW of LSS 0.1399 / kWh, a 18 per cent reduction Government continues to open more
projects were awarded through a fast- from LSS 3. quotas for biogas, biomass, and small
track mechanism. hydropower resources with 187.00MW
4. Feed-in Tariff scheme (FiT) in 2022 via e-Bidding. SEDA Malaysia
As of the third quarter of 2023, Malaysia The FiT scheme was introduced on received 68 applications and has
has awarded a total capacity of December 1, 2011, to boost RE uptake approved 32 projects equivalent to
2,445.372 MW for LSS projects. The by ensuring that Distribution Licensees 111.407MW in November 2022.
operational capacity stands at (DLs), such as TNB, purchase electricity
1,492.122 MW, with an additional 953.25 produced from renewable resources 5. Corporate Green Power Programme
MW in progress, reaching an overall at a special rate for a fixed period. The (CGPP)
completion rate of 61 per cent. FiT mechanism was initially available Corporate Green Power Programme
for all the primary RE resources (CGPP) is an initiative by the
Since 2016, Malaysia has conducted (biomass, biogas, small hydro, and Government to provide opportunity
four LSS auctions: solar PV). Due to the rapidly decreasing for business entities to participate in
• LSS 1 was held in 2016 for 371 MW, with costs, new mechanisms, such as LSS the promotion and use of renewable
the lowest bid submitted at MYR 0.39 auctions, NEM and SELCO, have energy in their business operation.
/ kWh69; been introduced, replacing the FiT The programme supports the growing
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Self Consumption (SELCO) of Solar Energy owning, and operating the solar power
plant, exporting the generated energy
through the electricity supply system
of the Electricity Utility Company as
per the NEDA Rules. Simultaneously, the
Corporate Consumer receives electricity
supply from the Electricity Utility
Company, with the option to engage
in a virtual power purchase agreement
for solar energy with the Solar Power
Producer. The Electricity Utility Company
facilitates the export of energy from
the solar power plant through its
electricity supply system, compensating
the Solar Power Producer based
on the Actual System Marginal Price
(SMP) in accordance with the NEDA
Rules.
6. Green Electricity Tariff (GET)

To enable electricity consumers
to reduce their carbon footprint in
electricity consumption, the government
24 has introduced the Green Electricity
Tariff (GET) to offer low carbon electricity
supply to all consumers. Customers with
GET subscription will pay Normal tariff
for monthly electricity consumption plus
GET blocks subscription.
Through the GET Programme

implementation, customers gain the
flexibility to acquire a low-carbon
electricity supply without the need to
number of electricity consumers that install personal solar rooftops or other
aspire to achieve the Environmental, renewable energy installations. The
Social and Governance (ESG) target. renewable energy resources for the
GET Programme are harnessed from
CGPP is essentially a mechanism of solar power plants operating under the
virtual power purchase agreement, LSS Programme, as well as TNB’s and/
which is implemented using the existing or its subsidiary’s hydropower stations
New Enhanced Dispatch Arrangement and any other approved renewable
(NEDA) framework. energy plants regulated by the
Commission. Customers enrolled in the
In CGPP, three essential parties play GET Programme will receive Malaysia
distinct roles in the energy delivery and Renewable Energy Certificates (mRECs)
transaction process. The Solar Power at the conclusion of each calendar
Producer takes charge of developing, year. •
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Green Incentives to
Advance Energy Transition
Green Technology Financing scheme previously.
Scheme (GTFS)
Under the GTFS, the Government GTFS 4.0 serves distinct purposes for
provides a rebate of 2 per cent per each sector:
annum on the interest fees charged • Producers of Green Technology:
for loans by financial institutions for Obtain financial support for green
the first seven years of the loan and product manufacturing, excluding
guarantees 60 per cent of the green large-scale solar projects and
components cost. rooftop solar PV systems.
• Users of Green Technology:
This applies to producers of green Secure financing for investments
technology (RE generators), green or assets related to energy-
technology users, and energy efficient projects and/or energy
efficiency-related projects. performance contracting, with
exclusions for projects falling under
Uptake of the GTFS scheme has been Net Energy Metering (NEM) and Self-
positive, resulting in the extension of Consumption (SELCO).
RM2 billion of funds during Budget 2019. • Energy Services Companies
Following the positive uptake of the (ESCOs): Secure funding for
GTFS scheme, the Ministry of Finance investments or assets linked to
launched GTFS 3.0 in 2021 to support energy efficiency projects and/or
the RE projects further, followed by GTFS energy performance contracting.
4.0 in 2023. • Housing Developers: Secure financial
assistance for constructing green 25
The government continues to support buildings, with a specific focus on
GTFS 4.0 will also the development of green businesses residential development, ensuring
continue to provide with the reinstatement of the GTFS 4.0 the selling cost does not exceed
up to RM1.0 billion for the period until RM350,000.
the 60 per cent to 80 December 31, 2025. The financing • Low Carbon Mobility Infrastructure:
per cent government scheme will continue its support to Obtain funding for electric vehicle
six key sectors which include Energy, charge point operators.
guarantee on the Manufacturing, Transport, Building,
green component Waste and Water. The implementation of GTFS 4.0 is
important to ensure green technology-
cost financed GTFS 4.0 will also continue to provide the based projects continue to receive
by Participating 60 per cent to 80 per cent government
guarantee on the green component
support, which will directly contribute
to the growth and development of the
Financial Institutions cost financed by Participating Financial green technology industry and also
(PFIs) as well as Institutions (PFIs) as well as the rebate
of 1.5 per cent per annum on interest/
catalyst to the Climate Change policy.
the rebate of 1.5 per profit rate. Projects eligible for the scheme must
cent per annum on One of the main enhancements of GTFS
align with government policies and
targets addressing climate change,
interest/profit rate.“ 4.0 is the inclusion of Housing Developer biodiversity, and environmental
and Low Carbon Mobility Infrastructure concerns. Key nationally determined
to be eligible for financing investments contributions relevant to businesses
related to Building and Transportation include:
projects. • Renewable Energy: Achieve a 31 per
cent renewable energy installed
The Housing Developer and Low capacity mix by 2025 and a 45 per
Carbon Mobility Infrastructure is eligible cent reduction in emissions from the
to obtain a maximum financing of power sector by 2030 compared to
RM100 million and RM50 million the 2005 level.
respectively. The financing scheme • Energy Efficiency: Attain savings
continues supports other categories of 52,233 GWh of electricity from
such as Producer, User and ESCOs 2016 to 2025, equating to an eight
which have been introduced in the per cent reduction in electricity
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Green
Investment Applicable for companies that
Tax Allowance acquire qualifying green
(GITA) technology assets and listed
Assets under the MyHIJAU Directory.
SCOPE OF GREEN Green

Investment Applicable for companies that
TECHNOLOGY Tax Allowance undertake qualifying green
technology projects for business
(GITA)
TAX INCENTIVE Projects or own consumption.
26
Green
IncomeTax Applicable for qualifying green
Exemption technology service provider
(GITE) companies that are listed under
Services the MyHIJAU Directory.
demand by 2025 across residential, economy. Managed by the Malaysian Allowance (Asset & Project) and
commercial, and industrial sectors, Green Technology and Climate Change Green Income Tax Exemption (Service
with a further 15 per cent reduction Corporation (MGTC), these initiatives Provider).
in electricity consumption by 2030. aim to achieve several objectives:
• Waste Management: Target a 28 i. Encouraging investment in the GITA: GITA is accessible to companies
per cent recycling rate by 2030. green technology industry on a that own registered assets used in their
• Manufacturing: Increase the number project basis, whether for business Malaysian business operations. These
of green manufacturers to 17,000 by purposes or self-consumption, and assets must be listed in the MyHijau
2030. promoting the adoption of green directory and approved by the Ministry
• Building: 1,750 green buildings technology by selected services/ of Finance through MGTC confirmation.
certified by 2030. system providers. Upon approval, a validation letter is
ii. Encouraging companies to acquire/ issued, allowing companies to claim a
Green Technology Tax purchase assets verified as green 100 per cent offset of qualifying capital
Incentives technology assets by MGTC, listed expenditure against 70 per cent of
Introduced since 2014 during the under the MyHIJAU Directory. statutory income in the assessment
government’s Budget announcement, iii. Widening the coverage of green year. The claimed amount is then
the Green Investment Tax Allowance services to include solar leasing included in the tax return form.
(GITA) and Green Income Tax Exemption activities.
(GITE) align with the Malaysian GITE: The eligibility is extended to
government’s commitment to fostering These incentives fall into two main qualifying green technology service
the growth of Malaysia’s green categories: Green Investment Tax providers listed in the MyHIJAU Directory.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
To qualify, check if the purchased asset commercial and industrial sectors.

is listed in the MyHijau directory, and • Foster awareness about the
if not, request the supplier to register importance of energy management
for the MyHijau mark. Applicants must among commercial and industrial
complete the relevant form, pay the premises owners in Malaysia to
RM1,000 processing fee, and upon reduce energy consumption,
approval, MGTC will issue a validation ultimately saving operational costs.
letter. This letter must be submitted with
the tax form to declare the exemption. Any commercial building or industrial
installation with a minimum energy
The Energy Audit consumption of 100,000 kWh/month is
Conditional Grant eligible to apply. Entities that have not
The Energy Audit Conditional Grant previously received the EACG under 11th
(EACG 2.0) is an energy efficiency Malaysia Plan (11MP), are also eligible
programme outlined in the 12th Malaysia to participate.
Plan (12MP) for the implementation
period from 2021 to 2025. Allocated Benefits of the programme:
grants for this programme are intended • OWNERS: Operational cost energy
to support commercial and industrial consumption reduced after
sectors during this period, encouraging implementation of potential Energy
collaboration with registered local Saving Measures (ESM) advised in
ESCOs under the Energy Commission Energy Audit report.
(ST) to conduct energy audits in their • SUSTAINABLE ENERGY INDUSTRY: 27
buildings. This governmental grant is Capacity development for ESCOs to
disbursed on a first-come-first-serve fulfil the current and future demand
basis, contingent upon application of energy management in industrial
approval. and commercial sector.
• GOVERNMENT: Promoting the energy
Objectives of the Programme: saving, low carbon and sustainable
• Provide financial assistance to energy initiatives indirectly assisting
building/installation owners for Malaysia in achieving carbon
energy audits, facilitating the reduction targets.
implementation of energy-saving • ENVIRONMENT: Reduces the demand
measures at their premises. for electricity generation, and
• Promote energy audit exercises therefore reduces carbon emission.
to establish current energy
consumption baselines and identify Building on the EACG programme under References
potential energy savings. the 11MP, there were 108 applications HSBC. (2023). Malaysia Budget 2023 Summary:
ESG Green Incentives GITA/GITE. https://www.
• Create a platform for assistance received for commercial buildings, businessgo.hsbc.com/en/article/malaysia-
and facilitation to commercial resulting in a total of 71,694,374 kWh in budget-2023-summary-esg-green-
building and industrial installation energy savings in 2021. Simultaneously, incentives-gitagite
owners for systematic energy- the industrial segment had a total of MGTC. (n.d). Green Investment Tax Allowance
saving implementation. 109 buildings participating, achieving (GITA) & Green Income Tax Exemption (GITE).
• Build capacity in energy energy savings of 273,037,874 kWh in https://www.mgtc.gov.my/what-we-do/
green-incentives/green-investment-tax-
management within the the same year. • incentives-gita-gite/
MGTC. (n.d). Green Technology Financing

Scheme. https://www.gtfs.my/page/features-
gtfs-40
SEDA Malaysia. (n.d). https://www.seda.gov.

my/wp-content/uploads/2022/07/Bangunan-
EACG-RMK11.pdf
SEDA Malaysia. (n.d). Energy Audit Conditional

Grant – Commercial & Industry. https://
www.seda.gov.my/energy-demand-
management-edm/energy-audit-
conditional-grant-commercial-building/
ADVANCING JUST
ENERGY TRANSITION

Prospectus
New Energy and

Other Alternatives
WITH MALAYSIA AIMING FOR 70 PER Malaysia amount to 58 million tonnes
cent renewable energy by 2050, per year and 20 million tonnes per year
the government and other energy respectively (MPOB 2020). Biohydrogen
stakeholders are actively exploring production from POME and EFB through
technologies such as green hydrogen dark fermentation, gasification process
and Carbon Capture, Utilisation, and and various treatment methods has
Storage (CCUS) to propel the energy shown a promising route for green
sector forward. hydrogen production at pilot-scale.
Hydrogen, especially green hydrogen Additionally, Malaysia is blessed with

produced from renewable energy the geography to accommodate
sources, is seen as the future fuel. hydropower dams which in turn
By 2050, the dependence on gas provides electricity to produce green
is anticipated to decline, with hydrogen. Overall, the total gross
interconnection and hydrogen hydropower potential documented is
assuming more significant roles. about 414,000 GWh per year of which
about 123,000 GWh per year is the
In alignment with the National technical potential for development.
Energy Policy 2022-2040 (NEP) and About 87,000 GWh (70 per cent) of this
Malaysia’s objective of integrating energy potential is in Sarawak, 20,000
more sustainable energy sources into GWh in Sabah and 16,000 GWh in
the generation mix, battery storage Peninsular Malaysia.
becomes crucial for ensuring the
reliability of the nation’s grid. This scenario will potentially unlock a
28 revenue of RM7.7 billion coming from
Hydrogen Potential hydrogen demand through the power
in Malaysia generation sector in 2050. The potential
The Ministry of Science, Technology economic benefits from hydrogen
and Innovation (MOSTI) created the under a Business-as-Usual (BAU) and
Hydrogen Economy and Technology Emission-Driven Scenario (EDS) will
Roadmap (HETR) to guide the be able to generate a revenue of RM
development of Malaysia’s hydrogen 560.63 billion and RM 776.63 billion, in
economy, acting as a supporting 2050 respectively.
document to NEP. Both the NEP and
the HETR are living documents, which Grey, Blue and Green
shall pave the way to achieving Hydrogen in Malaysia
environmentally sustainable, long term In Malaysia, a significant amount of
energy security for Malaysia, driven by grey hydrogen is currently produced
technological innovation. through various processes within the oil
and gas industry, relying on hydrogen
According to HETR, annually, a minimum supplied from fossil fuels. However, this
of 168 million tonnes of biomass waste approach comes with the drawback
is generated in Malaysia. In general, of greenhouse gas (GHG) emissions,
palm oil waste accounts for 94 per making it an unsustainable option for
cent of biomass feedstock while the the future. The imperative for a cleaner
remaining contributors are agricultural hydrogen source is evident, leading
and forestry by-products, such as wood to the potential classification of grey
residues (four per cent), rice (one per hydrogen as blue hydrogen through
cent), and sugarcane industry wastes the application of CCUS technology.
(one per cent). The global production cost for blue
hydrogen ranges between US$ 1.5/
Based on the data from the Malaysia kg H2 and US$ 4/kg H2, while green
Palm Oil Board for 2020, the amount of hydrogen, another cleaner alternative,
solid biomass waste generated from has a production cost between US$ 4/
palm oil industry in Malaysia accounts kg H2 and US$ 6/kg H2.
for a total of 98.1 million tonnes. Palm
Oil Mill Effluent (POME) and Empty Fruit In the short to long term, Malaysia is
Bunch (EFB) generated from mills in committed to prioritising blue hydrogen
ADVANCING JUST
ENERGY TRANSITION

Prospectus
SUMMARY OF HETR
Short term (2022-2030) Mid term (2031-2040) Long term (2041-2050)
Grey H2=USD 1.5/kg

Blue H2=USD 3/kg Grey Hydrogen: To be phased out Blue Hydrogen: US$4.64/kg Blue Hydrogen: US$ 5.62/kg
Green H2=USD 6/kg Blue Hydrogen: US$3.71/kg Green Hydrogen: US$2.63/kg (Solar) Green Hydrogen: US$ 1.45/kg (Solar)
Hydrogen Green US$4.82/kg (Solar) US$2.25/kg (Hydro) US$ 2.11/kg (Hydro)
production Hydrogen: US$2.50/kg (Hydro) US$1.72/kg (Biomass) US$ 1.72/kg (Biomass)
US$1.72/kg (Biomass) US$1.30/kg (Biogas) US$ 1.25/kg (Biogas)
cost US$1.35/kg (Biogas)
Long-term strategic goal is to utilise Green Hydrogen
Environmental BAU: 0.4% GHG reduction BAU: 3% GHG reduction BAU: 6% GHG reduction
contribution EDS: 1.3% GHG reduction EDS: 8% GHG reduction EDS: 15% GHG reduction
• BAU: Industrial Use (Non-Energy and Heat) • BAU: Industrial Use (Non-Energy and • BAU: Power, Mobility and Industrial Use
RM 7.4 billion Heat) RM 37.1 billion (Non- Energy and Heat) RM 151.7 billion
Revenue • EDS: Industrial Use (Non-Energy and Heat) • EDS: Industrial Use (Non-Energy and • EDS: Power, Mobility and Industrial Use
generation RM 12.1 billion Heat), Power and Mobility RM 151.8 billion (Non-Energy and Heat) & Marine
• Capturing 10% of the hydrogen demand • Potential and competitive hydrogen RM 497.2billion
from Japan, South Korea and Singapore export hub generating revenue of • Position Malaysia to be a major exporter in
resulting in revenue of RM20 billion RM219 billion APAC and generate revenue of RM409 billion
• Available technologies to demonstrate, Increase in the targeted conversion Mass deployment in targeted renewable
scale-up and deploy first (Build Some) efficiency of the technologies across the energy sectors (e.g.: solar, hydroelectric,
Technology • Complementary external technologies hydrogen economy value chain biomass, OTEC)
agenda & solutions to be procured (Buy Some)
• Export terminal technologies and • Hydrogen used as energy storage Utilise hydrogen in the mobility, industry
Infrastructure hydrogen transport technologies in addressing the deployment of (non-energy and heat), commercial and
29
and between production sites and export variable renewable energy (VRE) domestic sector
terminals • Utilise hydrogen as co-blend fuel for
utilisation • To pilot utilisation of hydrogen as power generation and mobility
co-blended fuel
Job Business-As-Usual: 168,000

Emission-Driven: 211,680
creation
as its main focus, aiming to convert In IEA’s Net Zero scenario, blue hydrogen blue and green hydrogen is needed
its significant oil and gas sector into is projected to contribute nearly 40 per for Malaysia to meet the projected
a Hydrogen Economy. Despite the cent of the total global hydrogen supply demand for clean hydrogen to achieve
challenge of high capital expenditures by 2050. This aligns with the Hydrogen decarbonisation targets by 2050.
hindering the commercial availability Council’s findings in the Hydrogen
of CCUS technologies, strategic Decarbonisation Pathways, where 60 Green Hydrogen Development
investments facilitated by both foreign per cent of the market will be served by The 2021 pre-feasibility study concluded
and domestic direct investments green hydrogen, and 40 per cent will be that the collaborative effort of SEDC
become more practical when other supplied by blue hydrogen. Energy Sdn Bhd with other stakeholders
stakeholders from fossil-based sectors in the green hydrogen and ammonia
are engaged. Moreover, various CO2 Malaysia is strategically aiming for green project is anticipated to yield significant
capture technologies, including hydrogen, produced from renewable results. The project aims to produce
membrane and absorption methods, sources like solar, hydropower, and 7,000 tons/year of green hydrogen
offer feasible options for efficient wave energy, in the long term. This shift for local use in Sarawak, along with
CO2 capture, achieving levels below 1 is crucial for maintaining Malaysia’s 600,000 tons/year of blue ammonia,
kgCO2/kg H2. status as a major energy exporter, 630,000 tons/year of green ammonia,
prompting a swift transition to green and 460,000 tons/year of green
Besides focusing on natural gas + hydrogen. methanol. The H2biscus Project is
CCUS, the co-product hydrogen from poised to become a benchmark on
existing processing plants that meets Malaysian green hydrogen production the international stage, showcasing
certain certification standard or low price stands at USD 6/kg, being renewable energy trading and
carbon based on life cycle assessment the second most expensive next to hydrogen transportation between South
of carbon footprint may be regarded turquoise hydrogen. Regarding the cost Korea and Malaysia.
as blue hydrogen. competitiveness, the supply of both
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Furthermore, ENEOS has entered into

a Memorandum of Understanding
(MoU) with SEDC Energy Sdn Bhd
and Sumitomo Corporation to
establish a CO2-free hydrogen supply
chain. This innovative approach
involves converting hydrogen into
methylcyclohexane (MCH), providing
an efficient mode of transportation to
Japan. The feasibility study envisions
3,000 tons of hydrogen per year for
local consumption and 50,000 to
100,000 tons per year for export in the
form of MCH.
A recent joint feasibility study conducted

by PETRONAS/Gentari and ENEOS of
Japan for a commercial hydrogen
production and conversion project in
Kerteh, Terengganu, anticipates a total
hydrogen production and conversion
capacity of up to 50,000 tons per year
by 2027. The intention is to export the
30 hydrogen in the form of MCH to Japan.
This initiative is expected to stimulate
Malaysia’s economy through supply
and demand dynamics, while also generate green hydrogen fuel for power
attracting the essential investments generation and intensify collaborative RE100) and one around 90 per cent
needed to establish a robust hydrogen efforts to establish a green hydrogen renewable, with the remainder relying
infrastructure in the country. ecosystem, offering cleaner energy on carbon capture and storage (1.5-
solutions for Malaysia and international S RE90). These scenarios showcase
At an industrial scale, Sarawak Energy markets. potential approaches to achieve a
Berhad (SEB) has begun exploration into low-carbon system based on available
hydrogen business through electrolysis The Outlook Towards 2050 technology. Solar PV is a key component
demonstration project for fuel cell According to IRENA’s Malaysia Energy in all scenarios, requiring significant
electric vehicles (FCEVs). Transition Outlook 2003, a significant expansion and a substantial increase in
shift in Malaysia’s fuel demand is battery storage, reaching around 21 GW
When it comes to new energy and expected by 2050. Approximately one- by 2050 in the 100 per cent renewables
alternative, Malaysia’s main utility fifth of the demand for fuels in the 1.5- case.
company, TNB’s strategy involves S scenario will be renewable-based,
upgrading retired coal and gas plants including bioenergy, renewable direct- Energy storage deployment will be
with hydrogen-ready combined-cycle use (e.g., solar thermal), and hydrogen. substantial, particularly in Sabah
gas turbines (CCGTs). To secure a This marks a substantial increase and Peninsular Malaysia. In Sarawak,
sustainable and economically viable from the current one per cent reliance hydropower reservoirs serve as
supply of green hydrogen, TNB is on renewables. The report envisions storage, eliminating the need for other
researching efficient electrolysers to electricity constituting up to 40 per cent technologies. This has implications
lower the cost of production. of final energy consumption, driven by for spinning reserves, where both
the increased demand for electricity hydropower and storage can meet 10
To expedite the decarbonisation in the transport sector and green per cent of the load without fossil-fuel-
process in the energy sector, TNB has hydrogen production. based provision.
entered into an MoU with PETRONAS,
marking a collaborative effort to explore To explore alternatives to continued Bioenergy is expected to contribute
innovative green technologies. The initial fossil fuel reliance in power around 16 per cent to Malaysia’s
focus under this MoU involves a joint generation, the report outlines two energy transition by 2050, primarily as
study on developing a green hydrogen highly decarbonised pathways for biofuel for aviation and as a substitute
ecosystem and CCUS, utilising TNB’s the Malaysian power system: a 100 for fossil fuels in sectors such as iron
power plant assets. The objective is to per cent renewables system (1.5-S and steel, and cement. Strengthening
ADVANCING JUST
ENERGY TRANSITION

Prospectus
31
inter-institutional coordination and Many studies suggest that low carbon

developing a strategy that incorporates hydrogen is required for the emission
bioenergy into the energy transition is avoidance in the hard-to-abate sectors
crucial, addressing sustainability and such as metal and steel industry, oil and
industrial concerns to scale up potential gas refining industry and the chemicals
resources. industry such as for ammonia and
methanol production. References
Hydrogen is poised to play a IRENA. (2023). Malaysia energy transition
complementary role in Malaysia’s In sectors like steel manufacturing, outlook, International Renewable Energy
climate objectives. Green hydrogen where traditional methods heavily Agency, Abu Dhabi. https://mc-cd8320d4-
36a1-40ac-83cc-3389-cdn-endpoint.
is anticipated to comprise up to five rely on carbon-intensive blast azureedge.net/-/media/Files/IRENA/Agency/
per cent of total final consumption by furnaces, exploring alternatives such Publication/2023/Mar/IRENA_Malaysia_
2050 in the 1.5-S scenario, contributing as hydrogen-based direct reduction energy_transition_outlook_2023.
to decarbonising industrial sub-sectors can substantially cut down carbon IRENA. (2023). Malaysia energy transition
and meeting the growing demand for emissions. Similarly, the cement industry, outlook, International Renewable Energy
green hydrogen in the Asia-Pacific known for its substantial carbon dioxide Agency, Abu Dhabi. https://mc-cd8320d4-
36a1-40ac-83cc-3389-cdn-endpoint.
region. output, can benefit from adopting azureedge.net/-/media/Files/IRENA/
alternative materials and processes Agency/Publication/2023/Mar/IRENA_
A Game Changer for to reduce its environmental impact. Malaysia_energy_transition_outlook_2023.
Energy-intensive Industries Utilising bioenergy as a substitute
pdf?rev=b95f3ef90d3847bfb552f02bdde21529
Transitioning to new and alternative for fossil fuels in sectors like iron and MOSTI. (2023). Hydrogen Economy &
energy sources is crucial, especially for steel, as well as cement, can play Technology Roadmap. https://www.mosti.gov.
my/dasar/#dearflip-df_69947/1/
challenging sectors like steel, cement, a pivotal role in achieving both
and iron production. These industries environmental sustainability and Tenaga Nasional Berhad. (2023). TNB and
have long been major contributors to industrial efficiency. • PETRONAS Partner to Advance Hydrogen
carbon emissions due to their energy- Economy with Joint Feasibility Studies
for Hydrogen Business Development.
intensive processes. Recognising the https://www.tnb.com.my/assets/press_
significance of adopting new energy releases/2023080142_ENG.pdf
solutions is key to achieving global
Tenaga Nasional Berhad. (2022). Integrated
climate objectives. Annual Report 2022. https://www.tnb.com.my/
assets/annual_report/TNB_IAR_2022.pdf
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Interconnection and
Regional Cross-border
Power Integration
The ASEAN Power Grid (APG) electricity generation, serves as the
A ROBUST AND DEPENDABLE electricity primary exporter of electricity within
infrastructure is essential to foster Southeast Asia. Other countries,
regional economic growth and including Malaysia, Thailand, Vietnam,
facilitate the integration process. The and Myanmar, also participate in
ASEAN Power Grid (APG) stands as a electricity exports.
pivotal initiative aimed at establishing
a regional power interconnection. Malaysia’s Readiness
to Become ASEAN RE Hub
Initially, the focus is on bilateral The Malaysian government has lifted
connections across borders, with a the ban on exporting renewable
gradual expansion to sub-regional energy (RE) to enhance the country’s
levels, ultimately leading to the green economy policy. This decision
establishment of a fully integrated is expected to boost the potential of
power grid system for Southeast Asia. local RE companies by enabling cross-
Positioned as a key project within the border exports. The reversal of the ban
Therefore, the Master Plan of the ASEAN Connectivity, is anticipated to allow firms to expand
the APG project anticipates facilitating their renewable power generation
Grid of the Future cross-border electricity trade, capacity and tap into the high demand
32
strategy, embedded addressing the escalating demand for from neighbouring countries. The
electricity, and enhancing access to government will facilitate the cross-
in TNB’s Energy energy services throughout the region. border sale of RE through an electricity
Transition Plan, exchange system. This proactive move
According to PwC’s “Regional Electricity highlights Malaysia’s readiness to
seeks to modernise Trade in ASEAN” report, the establishment become ASEAN RE Hub for multilateral
and digitise the grid of an integrated ASEAN power grid is power trading.
poised to yield substantial advantages.
and distribution Key benefits include cost reduction and For instance, Malaysian utility company,
infrastructures, the opportunity to harness various
renewable sources from countries
TNB, has made substantial progress
in reinforcing connections with ASEAN
facilitating with resource advantages, supplying peers. It advocates for stronger
increased power to nations with fewer resources.
Additionally, the integrated power grid
interconnections to expedite the energy
transition, ensuring greater energy
integration enables more efficient balancing of security and facilitating a quicker
of distributed power loads by accessing required
power from sources across the region.
decarbonisation process for the region.
generations and This diversification results in a more Malaysia believes there is untapped
renewables.“ stable power supply, minimising the
impact of plant failures on the overall
potential in realising the APG and
encourages ASEAN member countries
region and optimising both resources to collaborate in fully integrating
and costs by reducing reserve margins. Southeast Asia’s power grid system.
In the current scenario, ASEAN countries
engage in regular electricity export Therefore, the Grid of the Future
and import, albeit in relatively small strategy, embedded in TNB’s Energy
quantities. Countries in Southeast Transition Plan, seeks to modernise
Asia generate 1,053 TWh of electricity and digitise the grid and distribution
annually, and export 36 TWh of the infrastructures, facilitating increased
generated electricity to other ASEAN integration of distributed generations
countries. These flows tend to be and renewables.
bilateral and unidirectional –between
two countries, where one country The emphasis is on optimising
exports and the other imports. interconnections with other countries
to enhance the reliability and efficiency
Currently, Laos, boasting surplus of the distribution network in delivering
ADVANCING JUST
ENERGY TRANSITION

Prospectus
ASEAN Power Grid Initiative
North
East
33
South
Legend
Existing
Under Constuction
Future
services to customers. This entails Singapore. First established in 1983, capacity. This interconnector is crucial
improved management of distributed this interconnector has allowed mutual in the Lao PDR-Thailand-Malaysia-
generation, creating opportunities for energy exchange between both Singapore Power Integration Project
beneficial cross-border collaborations. countries during power outages. (LTMS-PIP), facilitating cross-border
power trade and contributing to the
A significant achievement in our After 40 years, the upgraded broader APG objective.
interconnection journey in 2022 was interconnector accommodates
the successful upgrade of the electricity bidirectional electricity flows of around The LTMS-PIP led to a historic agreement
interconnector linking Malaysia and 1,000 megawatts, doubling its earlier between Singapore and Lao PDR,
ADVANCING JUST
ENERGY TRANSITION

Prospectus
34
enabling the import of 100 MW of Sarawak Corridor of Renewable Energy

hydropower from Lao PDR to Singapore (SCORE) initiative in Samalaju Industry
through Thailand and Malaysia. This Park, intended to attract energy-
marks the first instance of four ASEAN intensive heavy industries.
nations engaging in multilateral cross-
border electricity trade. The government Given the deep potential for hydropower
intends to explore interconnection production in this region, Sarawak is
References collaborations with countries like also looking to export its energy to
ASEAN Centre for Energy. (2020).
ASEAN Plan of Action for Energy Thailand and Indonesia. surrounding countries which include
Cooperation (APAEC) 2016-2025 Phase Indonesia, Brunei, and Singapore. There
II. https://aseanenergy.sharepoint. In Sarawak, the installed capacity under is currently one export link to export 200
com/PublicationLibrary/Forms/AllItems
aspx?id=%2FPublicationLibrary%2F2020%2
Sarawak Energy totals approximately MW to West Kalimantan (Indonesia),
FPublication%2FBooklet%2APAEC%20 5,600 MW across Sarawak, with 3,500 and there are early discussions on
Phase%20II%2 %28Final%29%2Epdf& MW of hydropower. Some of this building transmission lines to export
parent=%2 FPublicationLibrary%2F2020%2F
Publication&p=true&ga=1
renewable energy is anticipated to to other industry centres in Borneo. •
develop domestic industry under the
PwC. (2022). Regional electricity trade in
ASEAN: The road ahead to an integrated
and greener electricity future. https://www.
pwc.com/sg/en/publications/assets/page/
regional-electricity-trade-in-asean.pdf
Tenaga Nasional Berhad. (2022). Integrated

Annual Report 2022. https://www.tnb.com.
my/assets/annual_report/TNB_IAR_2022.pdf
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Skilled Workforce
Robust education system The quality of Malaysia’s labour force

Malaysia’s economic growth finds its stands out in the region, thanks to
cornerstone in a skilled and diverse consistent government efforts in
workforce bolstered by a robust human resource development across
educational system. According to all sectors.
MIDA, the country hosts numerous
public and private tertiary institutions, Noteworthy efforts by the government
along with a vast network of technical to shape industry-ready talent have
and vocational education and training earned Malaysia an improved position
colleges (TVET). in the Global Talent Competitiveness
Index 2022 (GTCI 2022), a joint study by
Malaysians often speak multiple INSEAD University, Google, and Adecco.
languages, with a high level of English The country’s ranking rose to 45th
proficiency, coupled with a minimum among 133 countries, underlining its
of 11 years of formal education among commitment to fostering a competitive
school leavers entering the workforce. and skilled workforce.
Enrollment in public higher education The private sector in Malaysia plays

institutions surpasses 500,000, with a substantial role in fortifying the
a notable increase in emphasis on educational landscape, complementing
science and technical disciplines. the government’s endeavours to
nurture a more extensive body of
With a significant labour force primarily professionals and semi-professionals.
composed of young individuals aged Numerous private colleges nationwide
25 to 29 years, accounting for nearly offer twinning degree programmes in 35
18 per cent of the population, the collaboration with overseas higher
demographic strength extends to learning institutions.
those aged 30 to 34 and 35 to 39 years,
making up 14.8 per cent and 13.7 per Collectively, these educational
cent, respectively. institutions contribute to a substantial
pool of professionals with degrees and
postgraduate qualifications.
Energy Management And
53 20
Climate Change Programme
More than
(EMCP)
1 2 3 1,400 Human capital acts as the engine to
drive Malaysia’s green technology
Private Public
Universities Universities TVET Colleges progressively forward. It mandates
having specialised skills and
competency to harness this technology
and ensure sustainable energy
Source: MIDA management for innovation and
performance.
A skilled workforce is vital for leveraging

innovation. Energy management is a
pivotal area to meet the needs of the
rapidly evolving environment.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
36
MGTC’s Green Skills Centre (GSC)

is dedicated to cultivating these
abilities and has designed the Energy
Management And Climate Change
Programme (EMCP), consisting of three
specialised categories:
1. Certification and Professional

Programme (CPP)
2. Non-Certification and Awareness
Programme (NCP)
3. Short-Course Programme (SCP)
EC recognises the programmes and

claimable under the Human Resources
Development Corporation. CPP’s Energy
Manager Training Course (EMTC) has
also been accorded due recognition
by the ASEAN Center for Energy for
the ASEAN Energy Management and
Accreditation Scheme Programme
(AEMAS) since 2014. References
Malaysian Green Technology and Climate
Change Corporation. (2021). Annual Report
The training has been influential, with 2021. https://www.mgtc.gov.my/wp-content/
over 7,000 participants benefiting from uploads/2022/07/mgtc-annual-report-2021.pdf
MGTC’s initiatives by December 2021. •
Malaysia Investment Development Authority.
(2022). Why Malaysia: Your Profit Centre in
Asia. https://www.mida.gov.my/wp-content/
uploads/2022/03/MIDA_WHY-MALAYSIA-2021.pdf
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Logistics
INVESTING IN MALAYSIA HOLDS RE Availability & Potential

numerous advantages, particularly Malaysia benefits from conducive
when considering its infrastructure, conditions and robust government
electricity reliability, and RE availability backing, promoting the expansion of RE
and potential. resources. The country’s commitment
to sustainability, complemented
Infrastructure by an extensive infrastructure,
Malaysia boasts a well-developed facilitates easier access to RE sources.
infrastructure that spans transportation, Advancements in solar, wind, and
telecommunications, and utilities. Its hydroelectric power have increased
strategic location within Southeast Asia availability and effectiveness in
and extensive network of highways, harnessing these resources to meet
ports, and airports make it a hub for energy demands.
regional and international connectivity.
This infrastructure supports domestic Located near the equator, Malaysia
logistics and acts as a vital channel for boasts high solar irradiation all year
global trade routes. round, with Kota Kinabalu leading at
1,900 kWh per square metre (m²). Wind
speed varies between regions, offering
good potential near the Indian Ocean
and South China Sea, making areas like
Mersing, Kudat, and Sabah promising
Extensive land International Global sea
connectivity airports connections for wind energy.
Malaysia’s land mass is connected 6 international and 16 domestic 7 globally reconised ports with an
via 3 major expressways spanning airports handling over efficient network handling 90% of
Hydropower potential is significant 37
a road network of 250K + KM 100 mil + passengers in 2018 Malaysia’s trade
due to the country’s high rainfall
Source: MITI and abundant water resources, with
small hydropower plants contributing
substantially.
Electricity Reliability
The country maintains a highly reliable With vast oil palm plantations expanding
electricity grid. Its consistent and stable over the years, Malaysia has emerged
energy supply ensures operational as a prominent global biofuel supplier.
continuity for businesses. This However, despite the significant role of
reliability provides a solid foundation biomass in the country’s energy mix, it
for integrating RE sources into the faces constraints in achieving its full
existing power grid, offering a smooth potential due to supply uncertainties
and dependable transition toward and other technical, financial, and
sustainable energy use. policy barriers.
The grid infrastructure is pivotal Biogas from various sources, including

in the country’s energy supply, municipal solid waste and palm oil
fostering economic growth and rapid mill effluent, notably shows significant
development. Continuous investments potential. Biomass resources, especially
in the grid network guarantee in Peninsular Malaysia, Sabah, and
customers reliable access to energy Sarawak, hold the largest capacity,
through a modern and efficient grid. with biogas and municipal solid waste
also presenting substantial potential
for energy generation. •
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Malaysia’s RE resource potential
1060E 1140E Disclaimer: This map is provided for

illustration purposes only. Boundaries and
names shown on this map do not imply
80N 80N the expression of any opinion on the part
Annual average
of IRENA concerning the status of any
kWh/m2 region, country, territory, city or area or its
<= 1400 authorities or concerning the delimitation
1400-1500 of frontiers or boundaries. Source: ESMAP,
1500-1600
2019; DTU, 2015. Also available on the IRENA
1600-1700
1700-1800 Global Atlas for Renewable Energy web
1800-1900 platform: https://globalatlas. irena.org/
>1900
00 00
1060E 1140E
1060E 1140E
Wind speed
at 100 m
80N 80N
Annual average
m/s
<= 2.5
38 2.5-3.5
3.5-4.5
4.5-5.5
>5.5
00 00
1060E 1140E
Overview of bioenergy resources availability in Malaysia
4,000
3,500
Bioenergy resourse potential (MW)
3,000 Municipal
solid waste
2,500
Biogas References
International Renewable Energy Agency
2,000 Biomass [IRENA]. (2023). Malaysia Energy Transition
Outlook. https://mc-cd8320d4-36a1-40ac-
1,500 83cc-3389-cdn-endpoint.azureedge.net/-/
media/Files/IRENA/Agency/Publication/2023/
1,000
Mar/IRENA_Malaysia_energy_transition_
outlook_2023.pdf
500 Ministry of Investment, Trade and Industry
[MITI]. (n.d). Why Malaysia. https://www.miti.
0 gov.my/NIA/why-malaysia.html
Total in Peninsular Sabah Serawak Tenaga Nasional Berhad [TNB]. (2022).
Malaysia Malaysia Integrated Annual Report 2022. https://www.
tnb.com.my/assets/annual_report/TNB_
Source: SEDA Malaysia IAR_2022.pdf
SEDA Malaysia. (2021). Malaysia Renewable

Energy Roadmap. https://www.seda.gov.my/
reportal/wp-content/uploads/2021/12/MyRER_
webVer-1.pdf
ADVANCING JUST
ENERGY TRANSITION

Prospectus
ACCOMPLISHMENTS OF
SUSTAINABLE ENERGY PROJECTS
Success Stories
Self-consumption (SELCO) Net Energy Metering (NEM)

Malaysia Marine and Heavy Perusahaan Otomobil Nasional
Engineering Holdings (MMHE) Berhad Berhad (PROTON) - 12,055.440 kWp
The MMHE Project, located at West Yard PROTON unveiled its solar power
in Pasir Gudang, Johor, Malaysia, boasts initiative at its Tanjung Malim plant in
a capacity of 8.3 MW. Representing March 2022. This project was designed
Malaysia’s largest rooftop solar to aid the national carmaker in reducing
installation within a single compound, its CO2 emissions by 11,536 tonnes
the project was executed by M+ by annually while providing utility cost
PETRONAS under an agreement set to savings. It comprises Malaysia’s largest
extend for 21 years, lasting until 2042. parking lot bi-facial solar panel facility,
along with solar panels mounted on its
(Credit: M+ by PETRONAS).
factory rooftop. The combined power
generated is 12MWp, sufficient to meet
up to 25 per cent of the plant’s power
consumption.
Covering 23.4 acres, PROTON’s motor

pool car park offers parking spaces for
2,880 cars. It serves as a transit point
for cars produced at Tanjung Malim
before distribution to dealers and
MMHE Project, Pasir outlets nationwide. The area now hosts
Gudang, Johor. 20,544 bi-facial solar panels, which
derive energy from both direct sunlight 39
Leveraging the SELCO scheme, this on top and reflected sunlight from the
initiative incorporates 18,720 units of ground and the cars parked beneath
solar PV panels covering a total area the panels. These panels also offer
of 440,496 sq ft. This solar infrastructure shaded car storage, protecting newly
is designed to power eight buildings at produced cars from the elements.
MMHE West, generating an estimated
10,000 MWh of clean energy annually. Built and commissioned by Pekat Group
Over the 21-year agreement period, this and its associate MFP Solar, the parking
production will facilitate a reduction lot solar panel facility can generate
of approximately 132,000 tonnes of 9MWp. It is the largest in Malaysia and
carbon emissions - an equivalent for any car manufacturer. It allows
environmental impact to planting 2 PROTON to save up to RM4.39 million
million trees. a year on its energy bill, with a further
saving of RM1.46 million available via
the 3MWp generated by the factory
roof-mounted panels.
PROTON’s solar panel facility is part of

the company’s green initiative as the
company takes up the challenge to
help Malaysia meet the government’s
target of becoming a carbon-neutral
nation by 2050.
Xinyi Solar (Malaysia) - 29,666.635

kWp
One of the world’s largest solar glass
manufacturers, Xinyi Glass Holdings
Ltd, launched its large-scale solar
photovoltaic (PV) project in Melaka in
January 2020 through its subsidiaries,
Energy Smart (Malaysia) Sdn Bhd and
Xinyi Solar (Malaysia).
ADVANCING JUST
ENERGY TRANSITION

Prospectus
• Type: LSS2
Company: Kuala Terengganu,
Terengganu
Capacity: 6.15 MWp
Feed-in Tariff (FiT)

Solar: Gading Kencana Sdn Bhd
Gading Kencana initiated its business
PROTON Tanjung Malim, Perak. by retailing solar-powered garden lights
as early as 2000. Progressing from solar
The first and second phases of the Large Scale Solar (LSS) garden lights, the company transitioned
project were completed at the time Samaiden Group Berhad to solar-powered street lighting.
of the launch, boasting an installed Samaiden, an ASEAN Energy Award 2017
capacity of 19MWp. recipient, is a clean energy provider It soon garnered the expertise by
established in 2013. The company training its staff in Germany to design
Malaysia is a strategically important primarily engages in the engineering, and construct Stand-alone (off-
market for Xinyi Group as it continues procurement, construction, and grid) Solar PV systems. These solar
growing its business there. The Group is commissioning (EPCC) of solar PV PV systems were installed in Orang
committed to giving back and creating systems and power plants. Utilising Asal villages, remote settlements, and
a sustainable impact in its communities. comprehensive industry knowledge schools in Sabah and Sarawak. Gading
and domain expertise, it is dedicated Kencana takes pride in two notable
Approximately RM60 million will be to delivering high-quality RE solutions projects: the SURIAku and the Wakaf
invested in installing a 31MWp rooftop and ensuring customer satisfaction. Solar Masjid.
solar PV system across its facilities in
40 Jasin, Melaka. This project is estimated The company’s portfolio encompasses The SURIAku project involved an
to reduce carbon emissions by 39,649 several LSS projects, including: installation of 4KWp solar PV systems
tonnes annually. • Type: LSS1 in the houses of 20 underprivileged
Company: Fairview Equity Sdn Bhd families in the Arau district, Perlis,
The Group looks forward to powering up Capacity: 9.99 MWac under the FiT scheme. This initiative
its operations with the environmentally • Type: LSS1 significantly improved the families’
friendly energy generated from this Company: Fairview Equity Sdn Bhd income stability, transforming their
project. Additionally, it anticipates Capacity: 5 MWac previously modest and irregular income
approximately RM15.9 million in annual • Type: LSS1 into a more regular one.
savings on its electricity costs through Company: UiTM Pasir Gudang, Johor
this initiative. Capacity: 25 MWac The Wakaf Solar Masjid project emerged
UITM Pasir Gudang, Johor.

(Credit: Samaiden Group Berhad)
ADVANCING JUST
ENERGY TRANSITION

Prospectus
well-defined FiT scheme conducted

by SEDA Malaysia. The framework’s
accessibility and business feasibility
have remained consistent over the
past decade, attracting other project
developers and financial institutions to
enter Malaysia’s biogas industry.
Biomass: Tenaga Sulpom Sdn Bhd

With the burgeoning landscape in
the RE sector, Tenaga Sulpom Sdn
Bhd emerged, led by HS Yap, Director
of TSSB, and the team. This entity
oversees operations at an integrated
7MW biomass power plant under SEDA
Gading Kencana 8MW Solar Farm, sprawling 17.17 acres in Melaka. Malaysia’s FiT scheme.
(expected IOD August 2022)
as a combined effort between the Its core team actively participates in
office of the Member of Parliament Their efforts have significantly created diverse projects, collaborating closely
of Johor Bahru and Gading Kencana. employment opportunities in rural with various stakeholders to expand the
Around 25 mosques and suraus were areas, particularly in FELDA estates RE industry into a substantial market
equipped with solar rooftop PV and Kuala Lumpur (HQ). About 90 per in Malaysia. They provide counsel and
systems of varied capacities under cent of the on-site staff were recruited collaborate with government agencies,
the FiT scheme. This project ensured from the local plantation communities, shaping innovative industry concepts
that these places of worship received previously involved in odd jobs in the while extending support for government 41
a regular income to maintain their area. These individuals were absorbed and private RE developments.
premises instead of relying on into Concord Group’s workforce upon
irregular contributions from their receiving training and job exposure. Hydro: Amcorp Power Sdn Bhd
congregations. Amcorp Power Sdn Bhd initiated its
As one of the pioneering project inaugural RE project under the Small
Biogas: Concord Group developers in Malaysia, the Concord Renewable Energy Power Programme
The Concord Group, a prominent player Group has reaped benefits from the (SREP) scheme, wherein TNB would
in Malaysia’s biogas industry, has made
substantial advancements through
the FiT quotas it obtained from SEDA
Malaysia. These quotas facilitated the
establishment of several biogas plants
in Pahang, Johor, and Terengganu,
contributing to Malaysia’s sustainable
energy initiatives.
The Concord Group currently operates

at various biogas plant locations:
• Lepar Hilir Biogas Plant, Pahang
(commissioned in December 2018)
• Keratong 2 Biogas Plant, Pahang
(commissioned in February 2019)
• Lok Heng Biogas Plant, Johor
(commissioned in June 2019)
• Adela Biogas Plant, Johor
(commissioned in June 2019)
• Kemaman Biogas Plant, Terengganu
(expected initial operation date
(IOD) December 2021)
• Sungai Tong Biogas Plant,
Terengganu (expected IOD
December 2021)
• Ulu Keratong Biogas Plant, Pahang A 7MW biomass plant at Tenaga Sulpom Sdn Bhd, Dengkil, Selangor.
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Adela Biogas Plant.
42 purchase the generated RE at a fixed

tariff of RM0.167/kWh for a concession
period spanning 21 years.
In 2011, the SREP transitioned to the FiT

scheme, facilitated by establishing
SEDA Malaysia, leading to an increased
tariff of RM0.24/kWh. This transition
significantly bolstered Malaysia’s
small hydropower sector, resulting in
approximately 53 hydro plants awarded
under SEDA Malaysia’s FiT scheme,
boasting a combined capacity of
589MW.
Benefitting from the shift to the FiT

scheme and the raised tariff, Amcorp
undertook several RE expansions. This
included enhancing its 4MW mini Amcorp Liang 20MW Mini-Hydro Power Plant, Raub, Pahang.
hydropower plant in Bentong, Pahang,
boosting its capacity to 6.6MW, and
developing a 20MW mini hydropower References
PETRONAS. (n.d). Local Project. https://www.
plant in Raub, Pahang. petronas.com/mplus/projects/local-project
PROTON. (2022). Proton Unveils Solar Power
Amcorp operates as a wholly-owned Initiative. https://www.proton.com/en/
happenings/2022/march/proton-unveils-
subsidiary of Amcorp Properties Berhad solar-power-initiative
(Amprop), a privately held company
incorporated and domiciled in Malaysia. Samaiden Group Berhad. (n.d). Large Scale
Solar Project. https://samaiden.com.my/
Embarking on their maiden RE project
largescalesolar/
in 2009, Amcorp has progressively
accumulated an RE installed capacity The Borneo Post. (2020). Xinyi Launches
of 36MW in small hydropower and solar 31mwp Rooftop Solar Pv System Project.
https://www.theborneopost.com/2020/01/07/
power plants. • xinyi-launches-31mwp-rooftop-solar-pv-
system-project/
ADVANCING JUST
ENERGY TRANSITION

Prospectus
Come Invest
in Malaysia
43
Blok F11, Kompleks F Presint 1 Pusat Pentadbiran Kerajaan Persekutuan,
62000, Wilayah Persekutuan Putrajaya.
Tel: +603 8000 8000 | Fax: +603 8889 2672
With the cooperation of:

01-44 Prospectus (FA) 1

Uploaded by

Copyright:

Available Formats

01-44 Prospectus (FA) 1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

01-44 Prospectus (FA) 1

Uploaded by

Copyright:

Available Formats

Advancing Just

Malaysia’s Sustainable Energy Development

Malaysia’s Sustainable Energy Development

Malaysia Envisages to Advance A Just Energy Transition

Just Energy Transition: A Global Call to Climate Action 08

Malaysia’s Energy Landscape 10

Sustainable Energy Development 13

Advancing Just Energy Transition: Powering Up with

Sustainable Energy Programmes & Initiatives 22

Green Incentives to Advance Energy transition 25

New Energy and Other Alternatives 28

Interconnection and Regional Cross-border Power Integration 32

Malaysia’s Sustainable Energy Development

Malaysia’s Sustainable Energy Development

“Our commitment to climate

Malaysia’s Sustainable Energy Development

Global Energy Landscape

billion USD (2022) According to IRENA’s World Energy

The robust economic justification for

Malaysia’s Sustainable Energy Development

Five pillars to keep 1.5°C alive

12 000 5% 500 125 2.5

9 600 4% 400 100 2.0

7 200 3% 300 75 1.5

4 800 2% 200 50 1.0

2 400 1% 100 25 0.5

The report envisions a world in 2030 investments, and ensuring a structured

Malaysia’s Sustainable Energy Development

Just Energy Transition:

Malaysia’s Sustainable Energy Development

SEI, IISD, ODI, Climate Analytics, CICERO,

Malaysia’s Sustainable Energy Development

sectors. This includes scaling up renewable Current and

Malaysia’s Sustainable Energy Development

Total final consumption in Malaysia, by sector, 2010 to 2019

Malaysia’s Sustainable Energy Development

16.4% 0.12% Mini Hydro 1.3% 24.5%

Malaysia’s Sustainable Energy Development

The nation’s journey into RE began in • 3.6 GW resource potential for

Malaysia’s total installed renewable energy capacity, 2010 to 2021

Malaysia’s Sustainable Energy Development

RE resource potential in Malaysia

• The potential in approximately municipal solid waste, an estimated

• Available agricultural and Growth of Renewable Energy

• Growth in population and Under the Eighth Malaysia Plan

Malaysia’s Sustainable Energy Development

introduced, along with the Biomass of RE capacity in Malaysia has been

Malaysia’s Sustainable Energy Development

1990 2010 2015

The Ministry of Natural Resources, The Malaysia Renewable Energy

Malaysia’s Sustainable Energy Development

2017 2021 2023

Malaysia’s Sustainable Energy Development

Malaysia’s Sustainable Energy Development

Advancing Just Energy Transition:

MALAYSIA IS COMMITTED TO electricity sector, working towards the

Biogas Biomass Solar

RE Capacity Mix to achieve the target in 2035

Malaysia’s Sustainable Energy Development