Malaysia on track to achieve 40% renewable energy capacity

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Malaysia is set to achieve a significant milestone in its renewable energy ambitions, targeting 40 percent renewable energy capacity by 2035, according to a recent report by GlobalData.

This follows the 2021 target set by the Ministry of Energy and Natural Resources of Malaysia (KeTSA) to reach 31 percent renewable capacity by 2025 and 40 percent by 2035. Additionally, the National Energy Policy (2022–2040) aims for an 18.4 GW renewable capacity by 2040.

Currently, renewables account for 13.3 percent of Malaysia’s total energy capacity. If current growth trends continue, Malaysia is projected to reach 18.2 percent renewable capacity by 2025 and 36.4 percent by 2035.

In 2016, the energy commission Suruhanjaya Tenaga (ST) introduced a large-scale solar (LSS) program with a quota of 1,250 MW for the 2017-2020 period, spurring the growth of grid-connected PV systems. The Net Energy Metering program also contributed to the expansion of the distributed renewable energy market.

Malaysia primarily utilizes solar PV, biopower, and small hydro as its renewable energy sources. In 2015, Malaysia initiated the 30 MW Tawau geothermal project, which was later abandoned. Due to seasonal unfavorable wind speeds, Malaysia has only one small onshore wind plant with a capacity of 0.2 MW, though several small wind projects are still under consideration.

The Malaysian government has undertaken various initiatives to promote green energy, such as extending the Green Investment Tax Allowance and Green Income Tax Exemption until 2023. Additionally, to encourage participation in the Net Energy Metering Scheme (NEM), the government announced an extension of the income tax exemption (ITE) for solar leasing companies until December 2026.

The government has Feed-in Tariffs (FiT) for up to 1MW capacity and Net Metering policies to promote renewable energy adoption. “Strong governmental policies and foreign investments in large-scale renewable projects could significantly advance Malaysia towards achieving its renewable energy goals,” Sudeshna Sarmah, Power Analyst at GlobalData, stated.

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