Malaysia's Utilities and Renewable Energy Sectors Set for Transformation with Ambitious Government Policy and Infrastructure Initiatives

Malaysia's utilities and renewable energy sectors are poised for a transformative phase with ambitious government policies and new infrastructure initiatives. The National Energy Transition Roadmap targets a 70% renewable energy mix by 2050, driving momentum across public and private investments. Solar power remains a growth engine, with engineering, procurement, construction, and commissioning players set to benefit. The government is preparing to launch the fifth large-scale solar programme, and the Energy Commission is expected to announce the bidding for LSS6, introducing additional solar capacity with battery energy storage system requirements.

Malaysia's utilities and renewable energy sectors are poised for a transformative phase, driven by ambitious government policies and new infrastructure initiatives. The National Energy Transition Roadmap (NETR) targets a 70% renewable energy mix by 2050, propelling momentum across both public and private investments [1].

Solar power remains a significant growth engine, with engineering, procurement, construction, and commissioning (EPCC) players such as Solarvest, Samaiden, Pekat, Sunview, and Northern Solar set to benefit [1]. The government is preparing to launch the fifth large-scale solar (LSS5) programme, known as the LSS Petra 5+, in the second half of financial year 2025. This programme is expected to introduce two gigawatts (GW) of additional capacity through land-based and floating solar projects [1].

In parallel, the Energy Commission (ST) is anticipated to announce the bidding for LSS6, which will likely introduce another 2 GW of solar capacity with battery energy storage system (BESS) requirements [1]. The expected cumulative growth of solar is significant, with estimates indicating that solar will account for 25%, 39%, 52%, 58% of the capacity mix in 2035, 2040, 2045, and 2050, respectively, growing at a compounded annual growth rate of 14% between 2025 and 2050 [1].

Beyond solar, Malaysia’s gas-fired generation capacity also received a boost with a recently launched request for proposal (RFP) for new gas plants. This initiative aims to deliver around eight GW of capacity through two channels: extensions of expiring power purchase agreements and new-build developments. Independent power producers such as Malakoff Corp and YTL Power International are expected to be among the frontrunners for this new scheme [1].

Grid modernisation remains a critical enabler, with Tenaga Nasional Bhd (TNB) set to be the key beneficiary in the asset ownership space from both renewable energy (RE) capacity expansion and grid upgrade investments [1].

The resilience of Malaysia’s green power supply will be bolstered by broadening the diversity and accessibility of renewable sources, facilitated by third-party access models such as the Corporate Renewable Energy Supply Scheme and the Community Renewable Energy Aggregation Mechanism [1]. Additionally, Sarawak’s dominance in hydropower is expected to be reinforced through a dedicated grid link to Peninsular Malaysia, further unifying the nation’s clean-energy infrastructure [1].

On the long-term horizon, nuclear power has re-entered the policy spotlight. The government is targeting commercial readiness by 2031, with MyPOWER Corp appointed as the Nuclear Energy Programme Implementing Organisation [1].

The transformative phase in Malaysia’s utilities and renewable energy sectors underscores the country’s commitment to a deep decarbonisation trajectory, supported by robust policy tailwinds and strategic investments.

References:
[1] https://thesun.my/malaysia-news/13mp-to-boost-utilities-and-renewable-energy-sectors-in-malaysia-JC14616197