What Is The Target Of Renewable Energy In Malaysia 2025?
Malaysia has ambitious targets to increase renewable energy adoption amid rising global energy demand and concerns about climate change. The government aims to boost the share of renewable energy in the power generation mix to 20% by 2025, up from current levels of around 9% in 2022 (Source). Meeting renewable energy targets helps improve energy security, reduce reliance on fossil fuels, lower carbon emissions, and boost economic growth in the renewable energy industry.
With power demand in Malaysia projected to rise steadily, increasing renewable energy capacity will be crucial for the country to transition to a more sustainable energy system. Reaching the 2025 renewable energy target requires concerted efforts from policymakers, regulators, utilities and independent power producers. Strong policy support, investor-friendly regulations and innovative business models can catalyze investments in solar, hydro, biomass and other forms of renewable energy across Malaysia.
Current Energy Mix
Malaysia’s current energy mix is still heavily reliant on fossil fuels. As of 2021, natural gas accounted for approximately 44% of Malaysia’s electricity generation according to the International Energy Agency (https://www.iea.org/countries/malaysia). Coal accounted for 34%, hydroelectricity 12%, with the remaining 10% from oil, solar, biomass and other renewables.
The share of natural gas in Malaysia’s electricity mix has decreased from 67% in 2005, as coal has been increasing. Renewables beyond hydropower still only account for a small fraction of Malaysia’s energy mix at present.
According to Malaysia’s National Energy Policy 2022-2040 report, in 2020 approximately 91% of Malaysia’s energy needs were met by fossil fuels, with the remaining 9% from renewable sources like hydro, solar and biomass (https://www.ekonomi.gov.my/sites/default/files/2022-09/National%20Energy%20Policy_2022_2040.pdf).
Previous Renewable Energy Targets
Malaysia has set renewable energy targets over the past decade but has struggled to meet them. In 2010, Malaysia aimed for renewable energy to reach 5.5% of electricity generation by 2020, but only achieved around 2% by that year according to Energy policy of Malaysia – Wikipedia. Renewable energy sources consisted mainly of hydroelectric power, with smaller amounts from biomass and solar.
The 10th Malaysia Plan from 2011-2015 pushed to increase renewable energy to 985 MW but achieved less than half that amount at 424 MW according to the Malaysia Country Commercial Guide on Renewable Energy. Reasons cited for missing the targets include lack of infrastructure investment, policy and regulatory issues, and fiscal constraints.
The 11th Malaysia Plan from 2016-2020 set a new target of 2,080 MW from renewable sources but again fell short. Renewable energy grew modestly from 424 MW to 612 MW during the period. While showing progress, Malaysia continued to rely heavily on natural gas and coal which together provided over 90% of electricity generation.
2025 Renewable Energy Target
The Malaysian government has set a target for renewable energy to reach 20% of total electricity generation capacity by 2025. This is approximately 13 gigawatts of renewable energy capacity. [1]
This 2025 target was set as part of the government’s efforts to diversify energy resources and reduce dependence on fossil fuels. Meeting the 2025 target will require significant growth in solar, hydro, biomass and other renewable sources over the next few years.
The 20% renewable energy target for 2025 is part of a longer-term goal of increasing renewables in the generation mix to 31% by 2050. However, some experts believe the 2025 target may be difficult to achieve due to slow progress so far.
[1] https://www.facebook.com/groups/myevoc/posts/2300382260350854/
Renewable Energy Growth
Renewable energy capacity in Malaysia has grown rapidly over the past decade, but is still far below the government’s targets. In 2009, renewable energy made up just 0.4% of total electricity generation in Malaysia. By 2020, renewables had increased to 8.7% of generation capacity, mostly from hydroelectricity and solar PV. Malaysia is aiming for renewables to reach 31% of capacity by 2025.
According to the Sustainable Energy Development Authority Malaysia (SEDA), the country is not on track to meet its 2025 target. As of 2020, installed renewable energy capacity stood at 9,929 MW, while the 2025 target is 31,245 MW. This represents a gap of over 21,000 MW of renewable energy capacity that needs to be built within the next few years.
The government has set even more ambitious targets for 2035 (40%) and 2050 (50%), which will require sustained growth in renewables. SEDA projects that solar PV capacity will need to increase from around 2,000 MW today to over 15,000 MW by 2035. Other sources like hydro, biomass and wind will also need to expand significantly.
Achieving these targets will require overcoming challenges around grid integration, financing, land acquisition and public acceptance. With the right policies and incentives, Malaysia’s strong solar resource and strategic location could support rapid growth in renewable energy capacity over the coming decades.
Main Renewable Sources
Malaysia has several promising renewable energy sources including solar, hydropower, biomass, biogas, and geothermal energy. According to the Ministry of Energy and Natural Resources, these sources have significant potential to contribute to Malaysia’s clean energy goals.
Solar energy is one of the most abundant renewable resources in Malaysia due to its location near the equator. The average solar irradiation is about 1,400 to 1,600 kWh/m2/year which makes solar PV systems highly productive. According to EIA, the technical potential for solar is estimated at up to 70,000 MW. Large-scale solar projects are already being deployed through auctions and net metering programs.
Hydropower is the second largest renewable energy source with a current installed capacity of 5,726 MW, mainly from large dams. Additional potential exists in mini, micro, and pico hydropower plants. Studies estimate the gross theoretical potential for hydropower in Malaysia at 29,000 MW, however, only a fraction may be economically feasible to develop. According to HSBC, new large hydropower projects face challenges due to environmental concerns and resettlement issues.
Malaysia produced over 26 million tonnes of biomass in 2020, primarily from the agricultural sector. Biomass can be used to generate electricity via direct combustion or be converted into biofuels. Currently, Malaysia has about 400 MW of grid-connected biomass power plants. The theoretical potential for electricity from biomass is estimated at 2,000 MW. Studies also suggest biogas from palm oil mill effluent, municipal solid waste and sewage could contribute over 1,000 MW.
Challenges
While Malaysia has set an ambitious target for renewable energy by 2025, there are some key challenges that need to be addressed. One major challenge is integrating large amounts of intermittent renewable energy into the existing grid infrastructure. As noted by the Asia Carbon Exchange, “Grid stability and security could be compromised if the grid integration of RE is not properly managed” (Asia Carbon Exchange). Significant investments will be needed in grid modernization and energy storage solutions.
Another challenge is attracting financing and investment into renewable energy projects. As renewable energy is still a relatively new sector in Malaysia, investors may be hesitant to fund projects due to perceived risk and lack of expertise. The government needs to provide incentives, risk guarantees and clear regulations to give investors confidence (Asia Carbon Exchange).
Finally, policy and regulatory barriers need to be addressed. While Malaysia has implemented some pro-renewable policies, there are still gaps and inconsistencies that are hampering growth. Streamlining the approval process for projects, providing better pricing mechanisms and updating technical regulations will help drive more renewable energy development.
Government Policy
The Malaysian government has implemented several policies and plans to increase renewable energy adoption and meet its targets. The key policies include:
The Renewable Energy Act 2011 enabled the development of the Feed-in Tariff (FiT) mechanism which provides a guaranteed connection to the grid and long-term fixed price payments for electricity generated from renewable sources like solar, biomass and biogas. This incentivized renewable energy investments from the private sector (Malaysia Renewable Energy Policy Handbook, 2023 Update).
The government launched the Malaysia National Renewable Energy Policy and Action Plan (NREPAP) in 2010 which set a target for renewable energy to contribute 5.5% of total electricity generation by 2020 (Transition of renewable energy policies in Malaysia).
Most recently, the government announced the 2050 Net Zero Emissions goal and Malaysia’s Low Carbon Aspiration 2030 in 2021. This aims to increase the share of renewable energy in its electricity mix to 31% by 2025 and 40% by 2035 (Malaysia’s energy transition plan resembles business as usual).
Private Sector Role
The private sector is playing a major role in driving Malaysia’s renewable energy growth. Some of the leading companies involved include:
YTL Power – This Malaysian conglomerate has invested heavily in solar and hydro power projects across the country. They operate the largest solar farm in Southeast Asia at Kedah and recently completed a hydro project at Hulu Terengganu (nefinco.com).
Malakoff Corporation – Malaysia’s largest independent power producer has committed to increasing its renewable energy portfolio to 1GW by 2030. They currently operate dozens of small hydro and solar energy plants (mordorintelligence.com).
Cypark Resources – This green tech company focuses on renewable energy, especially biomass and biogas production from waste. They have projects across Malaysia converting landfill gas and palm oil waste into energy (mordorintelligence.com).
Conclusion
Malaysia has set a target of renewable energy providing 31% of total electricity generation by 2025, as part of the Malaysia Renewable Energy Roadmap (MyRER). This is an ambitious goal that will require significant growth in renewable energy capacity over the next few years.
Currently, renewable energy accounts for around 8% of Malaysia’s electricity mix, with the majority still coming from fossil fuels. However, there has been good progress, with installed renewable energy capacity more than doubling from 2016 to 2020. Solar power has seen particularly rapid growth recently.
Reaching the 31% target will require concerted effort across government, regulators and the private sector. Challenges around grid integration, financing and policy support will need to be addressed. But with strong fundamentals for renewables and falling technology costs, the outlook is positive. Malaysia seems poised to continue on its renewable energy transition.
