The Quest to Achieve Net Zero: The Launch of Malaysia’s National Energy Transition Roadmap (Phase 1)

On July 27 2023, Malaysia launched Phase 1 of the country’s National Energy Transition Roadmap (NETR), which has a strong focus on transforming the economy and creating potential business opportunities in the clean energy sector. In this article, we take a brief look at the NETR and its aim to catalyse investment and progress in Malaysia’s goal to achieve a sustainable energy landscape.?

Why was the NETR created??

In terms of energy transition efforts, Malaysia was recently recognised as the leading Southeast Asian country championing this cause in the World Economic Forum’s?Energy Transition Index.?The Index was last published in June of this year and evaluates both system performance and a nation’s preparedness to transition to a more sustainable and environmentally friendly energy sources; Malaysia was ranked 35th?globally.??

On the heels of this achievement, the Economic Minister of Malaysia, Rafizi Ramli, has pointed out that this means Malaysia is well on the road to fostering rapid, secure, and cost-effective energy transition management. That being said, according to the?Malaysian-German Chamber of Commerce and Industry, as of 2020, renewable energy (such as hydroelectric, solar, and bioenergy) accounted for just 3.9% of the country’s total primary energy supply (TPES) mix. As such, the government has now revised its renewable energy capacity mix target with the aim of increasing it from 40% in 2035 to 70% by 2050.?

This is where the?NETR?comes in. Consisting of two phases, the NETR has the ultimate goal of accelerating Malaysia’s energy transition, shifting the nation from a fossil-fuelled based economy to a green and high-valued economy. The roadmap will require a whole-of-nation approach, meaning that everyone, including the federal government, state governments, the industry as well as the general public and the international community will need to be involved.?

Phase 1 and Phase 2 of the NETR

Broadly speaking, Phase 1 of the NETR has 10 flagship catalyst projects and initiatives that are based on six energy transition levers: energy efficiency (EE); renewable energy (RE); hydrogen; bioenergy; green mobility; and carbon capture utilisation and storage (CCUS).?

Phase 2 of the NETR, which is expected to launch in August 2023, will be focused on establishing the nation energy sector’s low-carbon pathway, national energy mix, and emissions reduction targets, as well as the enablers needed for the energy transition.?

Business Opportunities of the NETR (Phase 1)?

The launch of the NETR has prompted many international business partners of Malaysia to take a close look at the Roadmap and identify potential opportunities for investment. Here are seven options according to the?US International Trade Administration:?

1. Largest Solar Plant in ASEAN: Malaysia is planning to build a 1 gigawatt integrated solar photovoltaic (PV) plant which will require partnerships with and investments from solar equipment manufacturers, engineering, procurement, and construction (EPC) contractors, as well as renewable energy operators.
2. Household Rooftop Solar Initiative: The establishment of a new mechanism that allows households to earn income by leasing out rooftops for solar panel installations. This will need the involvement of businesses in the solar leasing and installation sector.
3. Renewable energy (RE) Zone: The development of a 1 gigawatt integrated renewable energy zone, which will require working with players in the renewable energy sector.
4. Large-Scale Solar Parks: Five centralized large-scale solar parks, each with a capacity of 100 MW will be established in Malaysia, providing opportunities for solar project development companies.
5. Energy Storage Systems: Utility-scale energy storage systems will be required, which will need input and investment from companies in the energy storage technologies and solutions business.
6. Green Hydrogen and Carbon Capture and Storage (CCS): In Sarawak, the government will be focusing on the production of green hydrogen and CCS projects, thus offering the chance for entities in the hydrogen and CCS sectors to participate in this project.
7. Future Mobility and Charging Infrastructure: Under the NETR, 10,000 charging stations for electric vehicles will be installed along highways and commercial buildings by 2025; EV charging infrastructure and services companies will be needed.
8. Biomass Demand Creation: Malaysia plans to utilize used cooking oil and waste as feedstock for biomass and biofuels. Therefore, players in the biomass and bioenergy sectors can help to further this aim.?

The NETR and Its Numbers – A Viable Business Proposition and a Way Forward for the Green Economy.

With the NETR, Malaysia is seeking to attract investment from global players in the local clean technology sector, which was valued at RM5 trillion in 2022. Phase 1, according to the Economic Minister, has seen total committed investments of?RM25 billion, and is expected to create 23,000 high-impact jobs, and to reduce 10,000 gigagrams of carbon dioxide equivalent annually. By 2050, these energy transition investment opportunities could be valued between RM435 billion to RM1.85 trillion.

Stay tuned to our social media as we share a more in-depth look at the NETR (Phase 1) and its 10 initiatives and projects in an upcoming article.?