On 27 July 2023, Part 1 of the National Energy Transition Roadmap (“NETR”) was released by the Ministry of Economy of Malaysia, which, in short, provides a renewables-centred, sustainable energy pathway towards a high value green economy involving impact initiatives and 10 flagship catalyst projects based on 6 energy transition levers: energy efficiency, renewable energy, hydrogen, bioenergy, green mobility and carbon capture, utilisation and storage (“CCUS”).
The Guiding Principles
Four main guiding principles underlie the NETR:
- the alignment of the energy sector with Malaysia’s aspirations and commitments to sustainable development;
- the need for the energy transition to be just, inclusive and cost-effective;
- the need for effective governance and a whole-of-nation approach; and
- the importance of creating high-value employment for people and generating high impact economic opportunities for small and medium enterprises (“SMEs”).
Flagship Catalyst Projects and Impact Initiatives
An overview of the 10 flagship catalyst projects and initiatives as outlined in Part 1 of the NETR are as follows:
|Energy Transition Levers||Flagship||Implementation modalities|
|Energy Efficiency||Efficient Switch||– The Energy Efficiency and Conservation Bill to regulate energy-intensive users, buildings and products will be tabled in Parliament in the fourth quarter of 2023.|
– Performance of energy audit exercises by railway operators to establish the current energy consumption baseline, identify potential energy savings and lower utility costs.
|Renewable Energy||Renewable Energy Zone||– Creation of a large-scale, integrated sustainable development spanning the |
entire energy supply chain. A pilot Renewable Energy Zone will be established encompassing an industrial park, zero-carbon city, residential development and data centre.
– Establishment of centralised large-scale solar parks across 5 sites in several
states, with 100MW deployment per site, co-developed by Tenaga Nasional
Berhad (“TNB”) in partnership with SMEs, cooperatives and statement economic development corporations.
– Development of 2500 MW hybrid hydro-floating solar projects at TNB’s
hydro dam reservoirs which will increase renewable energy generation
close to 24-hour availability.
– Construction of 4.5 MW solar capacity across 450 homes in City of Elmina
and Bandar Bukit Raja with up to 10 kW solar capacity per house through
|Energy Storage||– Development of utility-scale energy storage system to enable higher |
penetration of variable renewable energy.
|Energy Secure||– An integrated initiative to secure long-term energy supply and support the |
socioeconomic development of Sabah including the development of large
scale solar and small hydropower plants, formulation of biowaste policy and
regulatory framework and the feasibility of geothermal for power generation.
|Hydrogen||Green Hydrogen||– Implementation of 3 integrated projects to produce green hydrogen in |
Sarawak involving the development of a green hydrogen production plant
for domestic use and another 2 plants mainly for export purposes.
|Hydrogen for Power||– Collaboration between TNB and Petroliam Nasional Berhad for the |
co-firing of green hydrogen and ammonia to decarbonise TNB generation plants.
|Bioenergy||Biomass Demand Creation||– Development of potential biomass clusters with a centralised plant. |
Biomass clustering is expected to improve economies of scale and secure
larger and more reliable feedstock.
– Development of a co-firing initiative at the Tanjung Bin Power Plant by
burning biomass with coal. A pilot phase will commence in 2024 with a
view to scale up to a minimum of 15% biomass co-firing capacity by 2027.
|Green Mobility||Future Mobility||– Installation of 10,000 electronic vehicle charging stations along highways |
and Selected commercial buildings by 2025 in collaboration with, among
others, TNB, Plus Malaysia Berhad, Permodalan Nasional Berhad, Gentari
and Sunway Group.
– Introduction of the first mobile hydrogen refuelling station for
transportation in Peninsular Malaysia.
– Electrification of first and last mile public transport and upgrading
infrastructure and electrical lines at bus depots for charging.
– Installation of solar photovoltaic systems for non-traction electricity
usage in rail operations.
|Future Fuel||– Development of a bio-refinery in Johor as a catalyst for creating hubs to |
produce bio-based products.
|CCUS||CCUS for Industry||– Development of policy and regulatory framework to facilitate CCUS projects.|
– Implementation of carbon capture and storage catalyst projects for
Kasawari and Lang Lebah high-carbon dioxide gas fields.
Review of Renewable Energy Policies
In tandem with the development of the NETR, the existing renewable energy policies have also been updated, resulting in the following decisions:
- increase in the target for installed renewable energy capacity from 40% in 2035 to 70% by 2050;
- expansion of renewable energy development based on the concept of a self-contained system to encourage investment in the renewable energy value chain and diversify renewable energy programmes based on the principle of “willing buyer, willing seller”;
- scaling up of the installation of solar systems in government buildings;
- establishment of an electricity exchange system to allow cross-border renewable energy trade, building on the ASEAN power grid initiative; and
- bolstering of the national power grid to accommodate higher renewable energy uptake through introducing smart grid features and broadening access to third parties.
The highly anticipated Part 1 of the NETR has brought greater insight into the Malaysian Government’s roadmap to accelerate the country’s energy transition towards a low carbon future and better clarity on the framework within which the energy transition is to take place. Much, however, will depend on how the Malaysian Government will implement the outlined projects and impact initiatives and how these are initiated into actions. Part 2 of the NETR, which focuses on establishing the low-carbon pathway, national energy mix and emissions reduction growth targets as well as the enablers needed for the energy transition, is anticipated to be published in the near future. Read together with Part 1, this should be able to provide sharper focus and a clearer picture on the NETR’s role in supporting the Twelfth Malaysia Plan 2021-2025 and the newly launched National Energy Policy in the country’s effort to becoming a low carbon nation in 2040 and achieving net-zero greenhouse gas emissions by 2050. With the creation of different opportunities for investment across the renewable energy sector and its related industries in Malaysia, businesses that align their offerings with the NETR’s energy transition goals have the potential to thrive and contribute to Malaysia’s economic and environmental objectives.
Further details in relation to the NETR can be found in the policy document titled “National Energy Transition Roadmap Part 1: Flagship Catalyst Projects and Initiatives”, which can be viewed here.
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