Sizing the renewable energy challenge in Malaysia

Where Malaysia is heading

In 2019, 92% of all electricity generated in Peninsular Malaysia came from coal, oil or natural gas[1]. The rest are hydroelectric power plants.

By 2025, even after accounting for various government programs to promote renewable energy (“RE”), coal, oil & natural gas will still contribute 88% of our medium-term electricity generation capacity.

Given the lack of penalty for GHG emissions, industry players are incentivized to maintain the share of non-RE generation capacity instead of phasing them out. This slow momentum against change is bound to persist without stakeholder intervention.

Business-as-usual trajectory of Malaysia’s energy generation mix

The urgent need for an ambitious agenda

The Intergovernmental Panel on Climate Change (“IPCC”) is an organization dedicated to provide an objective, scientific view on climate change backed by the United Nations.

The IPCC calls rapid, far-reaching and unprecedented changes in all aspects of society within the next decade to limit global warming to 1.5°C from pre-industrial levels[2]. If we fail to do this, we risk a catastrophic overshoot of global warming that may be irreversible once breached.

The minimum pathway to limit such an overshoot (Pathway P3) calls for a renewable energy mix of 48% by 2030 and 63% by 2050.

IPCCs four pathways of global climate change mitigation efforts[3]

What meeting minimum pathway targets mean for Malaysia

To be in line with the IPCC minimum pathway (Pathway P3), Malaysia needs to both deprecate some existing non-RE generating capacity (~7,500 MW), and build-up additional RE generating capacity (~12,400 MW) by 2030.

Since demand for electricity in Malaysia is expected to grow modestly in the medium term, our conversion into RE needs to viewed as a necessary, large-scale supply substitution exercise.

At least 13,000 MW of existing non-RE generating capacities are set to see their power-purchase agreements (“PPA”) expire prior to 2030[4] – more than enough candidates to deprecate. If they are replaced with RE instead, we will be able to exceed Pathway P3 targets without breaching any PPA contracts.

Our build-up estimates are likely an underestimation due to the intermittent nature of renewable energy. To ensure sufficient redundancy, we may have to invest in significantly more generating capacity then peak demand then we do right now in an non-renewable paradigm.


  1. Peninsular Malaysia Electricity Supply Outlook 2017, Energy Commission

Note: Available data is >3 years old, some renewals may have already been approved. Powerplants may have multiple PPAs with different expiry dates

Sizing the renewable energy challenge in Malaysia

RE projects are not created equal; each have their own associated costs, performance, GHG impact & reliability factors – the solution is a mix. Moreover, additional investment will be needed in upgrading our grid infrastructure, as well energy storage facilities to account for REs intermittent nature.

Simply the build-up of >12,400 MW of new RE generating capacity will require infrastructure spending on an unprecedented scale; more than the public sector can afford on its own. It is imperative that we galvanize the private sector to join us in this fight.

What 12,400 MW of RE look like:

Largest offshore wind:
Walney Project, UK
Cost: USD 1.5b

Total: USD 27b

Largest thermal solar:
Ouarzazate, Morocco
Cost: USD 3.9b

Total: USD 94b

Largest hydro:
Three Gorges, China
Cost: USD 31b

Total: USD 16b

Largest offshore wind:
Walney Project, UK
Cost: USD 1.5b

Total: USD 27b