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Malaysia to close in on 40% renewable capacity target by 2035, says GlobalData

In 2021, the Ministry of Energy and Natural Resources of Malaysia (KeTSA) set a target to achieve 31% renewable capacity by 2025 and 40% by 2035. Later in the National Energy Policy (2022 – 2040) the government set a target to achieve 18.4 GW renewable capacity by 2040. Currently, 13.3% of the country’s total capacity is accounted for by renewables. As per the current growth trend, Malaysia is expected to achieve 18.2% renewable capacity by 2025 and 36.4% by 2035, says GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Malaysia Power Market Size, Trends, Regulations, Competitive Landscape and Forecast, 2024-2035” reveals that Malaysia is rich in the untapped potential of renewable energy sources. With a growing population and rising power demands, the country is looking towards clean energy. Malaysia holds the potential to develop a renewable energy system in order to achieve energy security while addressing climate change concerns.


Sudeshna Sarmah, Power Analyst at GlobalData, comments: “In 2016, Malaysia’s energy commission Suruhanjaya Tenaga (ST) introduced a large scale solar (LSS) program with a total quota of 1,250 MW allocated for the 2017-2020 period, which resulted in the accelerated growth of grid-connected PV systems. Moreover, the Net Energy Metering program led to the rise of distributed renewable energy market.”

Solar PV, biopower, and small hydro are the only three renewable sources utilized by the country. In 2015, Malaysia took a step towards exploring geothermal power by launching the 30 MW Tawau project, which was later abandoned by the government. Due to the unfavorable wind speeds during off seasons, the country has only one small onshore wind plant with a capacity of 0.2 MW. However, several small wind projects could still make a difference.

The Malaysian government has made various efforts towards prioritizing green energy, which includes extending the Green Investment Tax Allowance and Green Income Tax Exemption until 2023. In order to encourage participation in the Net Energy Metering Scheme (NEM), an extension to the income tax exemption (ITE) for solar leasing companies was announced by the government till December 2026.

Sarmah concludes: “The government has Feed-in Tariffs (FiT) (for up to 1MW capacity) and Net Metering policies in place to encourage the adoption of renewables. Governmental efforts such as strong policies and encouraging foreign investments towards setting up large scale renewable projects could push the country towards achieving its renewable energy goals.”

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