Malaysia: National Energy Transition Roadmap Part 1 – Flagship catalyst projects and initiatives

04 Aug 2023    4 minute read
Energy Transition Sustainability Hydrogen

In brief

  1. On 27 July 2023, the Malaysian Ministry of Economy has published Part 1 of the National Energy Transition Roadmap ("NETR Part 1") to effectively manage energy transition. Energy transition signifies a shift from a fossil fuel-dominated energy system to a greener system based on clean and renewable energy sources. 
  2. The NETR Part 1 sets the direction of the Malaysian government in developing future capabilities and shaping demand in the green energy market, by providing 10 flagship catalyst projects based on 6 energy transition levers, namely: 
    1. Energy efficiency
    2. Renewable energy
    3. Hydrogen
    4. Bioenergy
    5. Green mobility
    6. Carbon capture, utilization and storage.
  3. Part 2 of the NETR, to be published later in the year, will address the low-carbon pathway, national energy mix and emissions reductions targets as well as enablers needed for energy transition. It is expected that this would include much needed legislative reforms, incentive fundings and other support measures to be made available for the acceleration of Malaysia's energy transition.

Contents

Flagship catalyst projects

As part of the flagship catalysts projects, the Ministry of Economy has chosen the following initiatives:

Energy Transition Levers Flagship Modalities Champion
Energy efficiency Efficient switch

Legislative change

The Energy Efficiency and Conservation Bill, which regulates energy-intensive users, buildings and products, will be tabled in Parliament in the 4th quarter of 2023.

 Ministry of Energy and Natural Resources ("NRECC")

Energy audit for the rail sector

Railway operators will be asked to conduct an energy audit exercise to identify the current energy consumption and potential energy savings.

 Ministry of Transport
Renewable energy (RE) RE Zone

Integrated RE zone

A pilot RE zone including: an industrial park, zero-carbon city, residential development and data centre, will be established.

 Khazanah Nasional Berhad

Solar park

In partnership with businesses, Tenaga Nasional Berhad (TNB) will develop parks consisting of 100MW deployment per site across 5 sites in several states.

 TNB

Hybrid Hydro-Floating Solar PV

2500 MW HHFS potential at the TNB hydro dam reservoirs will be developed to increase RE generation close to 24-hour availability

 TNB

Residential Solar

4.5MW solar capacity shall be constructed across 450 homes in City of Elmina and Bandar Bukit Raja, with up to 10kW solar capacity per house via rooftop leasing.

 Sime Darby Property
Energy storage

Building storage systems

Utility-scale energy storage system shall be developed to enable higher penetration of variable RE.

 NRECC and Energy Commission
Energy secure

Sabah Energy Security Initiative

The pending initiatives are as follows:

  • Development of large-scale solar and small hydropower plants
  • Formulation of policy framework on biowaste
  • Feasibility of geothermal for power generation.
 Energy Commission of Sabah
Hydrogen Green hydrogen

Sarawak Hydrogen Hub

This involves:

  • The development of a green hydrogen production plant in Kuching by 2025 for domestic use
  • Developing 2 plants in Bintulu by 2027 for export purposes.
 SEDC Energy
Hydrogen for power

Co-firing of hydrogen and ammonia

Petronas will collaborate to decarbonize TNB generation plants.

 TNB
Bioenergy Biomass demand creation

Biomass clustering

Potential biomass clusters with a centralized plant using aggregated feedstock from multiple neighbouring mills will be developed to improve economies of scale and secure larger, more reliable feedstock.

 NRECC and Sustainable Energy Development Authority Malaysia

Biomass co-firing

A pilot phase of co-firing at the existing 2100MW Tanjung Bin Power Plant will commence in 2024 to scale up to a minimum of 15% biomass co-firing capacity by 2027. Biomass sources include: empty fruit bunch pellets, wood chips, wood pellets, bamboo pellets, coconut husk and rice husk.

 Malakoff
Green mobility Future mobility

EV charging stations

By 2025, 10,000 EV charging stations will be installed along highways and selected commercial buildings in collaboration with strategic partners (TNB, Plus Malaysia Berhad, Permodalan Nasional Berhad, Gentari, Sunway Group and more).

 Ministry of Investment, Trade and Industry

Mobile hydrogen refuelling station

The first mobile hydrogen refuelling station for transportation in Peninsular Malaysia will be introduced, in collaboration with NanoMalaysia Berhad, Petronas, United Motor Works and Malaysian Green Technology and Climate Change Corporation.

 Ministry of Science, Technology and Innovation

Public transport electrification

This project involves the electrification of first and last mile public transport, as well as upgrading infrastructure and electrical lines at bus depots for charging, with maintenance, repair and overhaul opportunities for local businesses.

 Ministry of Transport and
Prasarana

Solar photovoltaic (PV) installation for rail operations

PV systems for non-traction electricity usage in rail operations (e.g., stations and depots) will be installed, in accordance with the Rail Sector Energy Management and Renewable Energy Action Plan.

 Ministry of Transport
Future fuel

Biofuels hub

A bio-refinery will be developed to produce a range of bio-based products (e.g., sustainable aviation fuel, hydrotreated vegetable oil, advanced sustainable fuel and biochemicals) in Pengerang, Johor.

 Petronas
Carbon capture, utilization and storage (CCUS) Carbon capture and storage (CCS) for industry

Regulatory framework

Policy framework shall be developed for the purposes of implementing CCUS projects, including transboundary carbon movement.

 Ministry of Economy
Implementation of CCS catalyst projects for Kasawari and Lang Lebah high-CO2 gas fields, are expected to be in operation by 2026 and 2028 respectively. Petronas

Sources: National Energy Transition Roadmap, Part 1: Flagship Catalyst Projects and Initiatives published by Ministry of Economy, 27 July 2023

Observations

While the NETR Part 1 does not address certain things such as further steps to be taken or specific steps to implement the flagship projects, it does provide much-awaited development that sets out the oppportunities for collaborative partnerships between ministries and businesses and signals to the market the anticipated legislative reforms in light of energy transition. It is clear that the Government is committed to advance the energy transition movement of Malaysia and with investments of more than RM 25 billion required to achieve this, there is massive opportunities for more projects to be developed by both foreign and local investors.

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Contact Information
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Kuala Lumpur
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mark.lim@wongpartners.com
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Partner
Kuala Lumpur
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