KUALA LUMPUR (July 22): Malaysia needs a new growth story, and the government believes that energy transition could be the country’s new source of growth. However, regulatory and market impediments that restricted the growth of the renewable energy (RE) industry must first be removed.
This is the main motivation behind the government’s reform agenda of the RE sector through the National Energy Transition Roadmap (NETR). The first phase of the NETR will be launched on July 27, while the second phase will be launched in August.
In an exclusive interview with The Edge, Economy Minister Mohd Rafizi Ramli says that the country has all the right ingredients to be the leader in energy transition in the region. Already, the country is the highest ranked Southeast Asian country in the World Economic Forum’s Energy Transition Index 2023.
“We view energy transition from an economic competitiveness perspective. Our task is to restructure the economy, and Malaysia needs to transform from our current state of the economy to one that is driven by technology, sustainability, and one that can attract new investments.
“And for that, we also require a new growth narrative, because we need to stand out regionally and globally, and we need to lead at something,” he notes.
To be sure, the NETR is not going to be the first road map on RE for the country. However, it is going to be the first on laying out the road map for energy transition, by making the landscape more attractive for investors to come in and set up the infrastructure, and for consumers to switch to RE.
One of the major aspects of the NETR will be unlocking the huge potential in rooftop solar that Malaysia has, according to Rafizi. This will be done by allowing rooftop owners — from private houses to commercial and industrial premises, as well as government institutions — to monetise their assets.
Rafizi also notes that to scale up RE capacity into the power system, the government will first have to manage the reliability of supply, and that goes into the discussion of grid upgrades as well. Through the NETR, the government will introduce a market mechanism whereby the tariffs will include allocation for grid upgrades and wheeling charges.
Once the market and ecosystem are reformed, and the country has demonstrated to the international community that it has commendable and convincing energy transition programmes, then there will be enough international green funds that can facilitate the early retirement of coal-fired power plants, he adds.
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