Malaysia is opening its renewable energy market to power purchase agreements, i.e. cross-border trade



The Malaysian government is developing a new strategy to expand the use of renewable energy in the country and also to boost the domestic renewable energy industry.

Earlier this month, the ministries presented their proposals to the government, which approved several measures:

  • Renewable energy production capacity will be increased to create new economic opportunities through enhanced growth of the country’s renewable energy industry while ensuring security of electricity supply;
  • Based on the concept of autonomous systems, renewable energy development will be expanded to encourage investment in the renewable energy value chain and diversify renewable energy programs under a “willing buyer-willing seller” approach to encourage business participation through power purchase agreements. (PPAs);
  • The government allocates funds directly from its development budget to install solar power systems in government buildings, allowing ministries and agencies to benefit from savings in electricity costs;
  • The government develops and establishes an electricity exchange system that enables the implementation of the cross-border renewable energy trade policy.

“With this development, the renewable energy capacity of the electricity distribution system is expected to increase to around 70 percent by 2050,” says Minister of Natural Resources, Environment and Climate Change Nik Nazmi Nik Ahmad. “The expansion of renewable energy capacity will enable the exchange of excess renewable energy generation capacity across borders with regional neighbors based on a government-mandated mechanism, which will contribute to the realization of the ASEAN electricity grid.”

The projected increase in renewable energy capacity is in line with government-sponsored research on a low-carbon energy system and will be included in the National Power Generation Plan (PDP), he added.

Increasing renewable energy capacity in Malaysia’s electricity distribution system requires approximately MYR 637 billion (EUR 130.5 billion) in investment by 2050. This funding would finance renewable energy generation sources and strengthen grid infrastructure, including upgrading transmission lines and an energy storage system. network systems integration and operating costs.

The Ministry of Natural Resources and the Environment is examining the details of the resulting costs and investment values, as well as the effects on electricity consumers’ tariffs.

Malaysia currently has 2,165 MW of total solar capacity, according to data from Berlin-based consulting firm Apricum.

It aims to add 1,098 MW by 2025 and 2,414 MW by 2035. The country has raised its renewable energy target to 31% by 2025, equivalent to 8.53 GW of total renewable energy generation capacity, and to 40% by 2025, or 1094. GW.

David is a passionate writer and researcher who specializes in solar energy. He has a strong background in engineering and environmental science, which gives him a deep understanding of the science behind solar power and its benefits. David writes about the latest developments in solar technology and provides practical advice for homeowners and businesses who are interested in switching to solar.

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