THERE is increasing scope for Malaysia’s non-hydro renewable energy sector — particularly solar energy — to grow, with strengthening government support and rising investor interest in the past two years, Fitch Solutions Macro Research said in a Sept 13 report, identifying “substantial untapped … potential” in that area.
The report noted recent and upcoming moves that increase government support for the sector, in light of which there is “an upside risk” to Fitch Solutions’ forecast for the sector.
Ministry restructuring. Following the 2018 elections, the government restructured parts of ministries to form the Ministry of Energy, Science, Technology, Environment & Climate Change, indicating a shift in focus toward energy and environmental sustainability.
Incentives. Regulations have been put in place to encourage investment in the renewables sector, including feed-in tariffs, tax incentives, and renewable energy auctions.
Green financing support. The government is looking to introduce more financing incentives for the sector, as well as enhancing green energy trading in the private sector.
Renewable Energy Transition Roadmap. The government plans to launch a Renewable Energy Transition Roadmap 2035, aiming to raise the share of renewables in Malaysia’s power mix to 20 per cent by 2025. Expected to be launched by end-2019, the roadmap may include strategies such as peer-to-peer electricity trading or transitioning toward a mandatory renewable energy certificate market, said the report.
Fitch Solutions’ current forecast is for net non-hydro renewables capacity growth of over 1 gigawatt (GW) over the coming decade, taking total installed non-hydro renewables capacity to 3.1 GW by 2028. But this will likely be revised upwards upon “more concrete announcements and developments” in the coming quarters, said the report.