This article first appeared in The Edge Malaysia Weekly on December 29, 2025 - January 4, 2026

The rapidly growing industrial base of the Johor–Singapore Special Economic Zone (JS-SEZ) has spurred local energy players to expand renewable energy (RE) supply and infrastructure to meet rising demand, both domestically and for exports via Energy Exchange Malaysia (Enegem).

One initiative that has emerged is the Southern Johor Renewable Energy Corridor (SJREC), a partnership between Ditrolic Energy Holdings Sdn Bhd, the International Finance Corporation (IFC) — the World Bank’s private-sector arm — and Johor’s investment arm, Permodalan Darul Ta’zim (PDT).

The corridor is a 2,000 sq km hybrid solar and battery energy storage system (BESS) zone in Johor. Its initial phase is expected to comprise up to four gigawatts-peak (GWp) of solar capacity and 5.12GW-hours of energy storage across a 10,000-acre site.

This partnership was formed to address Johor’s rapid industrial growth and meet the energy needs of key industrial players in the region.

“SJREC aims to serve as a model or even a pilot project to show that large-scale electricity trading, especially green energy, can be done in a way that is viable and bankable,” says Tham Chee Aun, group CEO of Ditrolic Energy, on behalf of the SJREC.

“If we can demonstrate success here, it opens the door for broader interconnections across Asean. Backing from the World Bank Group’s IFC at this stage shows that there is a strong viability case for a project such as SJREC.”

Tham says the key differentiator for SJREC compared to other initiatives is its strategic location within the JS-SEZ, placing the corridor next to major demand centres for green energy and enabling supply where demand is strongest.

The SJREC continues to see robust demand and market confidence, reflected in multiple letters of intent and memoranda of understanding with reputable regional companies, and has begun progressing in phases.

Tham says initial pre-development work and approvals are underway, with commercial operations targeted to roll out in phases from 2027 to 2030.

“At present, the 4GWp project has received more than 90% subscription rate in terms of letters of intent and term sheets from both domestic and non-domestic users. Discussions are ongoing to further formalise these commitments as the project progresses. We foresee domestic projects moving ahead first followed by potential export,” he shares.

In this partnership, PDT will play a central role — together with Ditrolic Energy — in shaping the SJREC by jointly designing and developing the master development plan.

Ditrolic Energy will be investing and building the first catalytic project, including the necessary infrastructure for domestic consumption and future export potential.

“Additionally, Ditrolic will work to secure both local and cross-border offtakers for green electricity, reinforcing the corridor’s commercial viability,” says Tham.

Meanwhile, IFC’s role will be to support and co-fund pre-development activities, providing views on technical and policy matters to strengthen the project’s bankability. IFC may consider participating in the financing phase through instruments such as debt or equity, which could help mobilise additional private capital.

The SJREC collaboration will also work with relevant authorities and stakeholders such as Ministry of Energy Transition and Water Transformation (Petra) to facilitate renewable energy exports to Singapore, including utilising the Enegem platform with the aim of enhancing the local market and infrastructure development while balancing commercial viability for end consumers.

Cape EMS Bhd (KL:CEB) is another company that is looking at cross-border RE trading as a key long-term opportunity and is preparing technology to meet Singapore’s compliance and certification requirements.

Christina Tee Kim Chin, group CEO and managing director of Cape EMS, shares that the company’s broader vision is to establish Johor as a regional hub for BESS manufacturing and integration, with Singapore as a strategic export market for clean-energy infrastructure.

“We are developing modular, high-durability BESS designs suited for long-duration storage and high cycling, which is essential for supporting future Johor to Singapore export frameworks. As these frameworks mature, we aim to supply BESS modules, power-conversion systems, containerised packs and grid-interactive storage solutions from Johor.”

Much like the SJREC collaboration, the JS-SEZ has accelerated the RE ambitions of Cape EMS by creating a clearer policy environment and a more concentrated demand base for clean energy technologies.

Tee shares that the JS-SEZ’s emerging high-load consumer cluster — including data centres and advanced manufacturers — creates the demand conditions that make BESS, peak shaving and smart mobility solutions commercially viable at scale, driven by their decarbonisation needs.

“We aim to scale BESS assembly in Senai, expand EV (electric vehicle) charging infrastructure with load-managed and BESS-supported nodes, and integrate smart-mobility solutions with township developers and industrial estates. Our goal is to build an interoperable clean-energy backbone across Johor,” she says.

Cape EMS will focus on market segments that deliver economic value through energy storage, which include utility-scale solar and hybrid plants, commercial and industrial consumers such as factories, data centres, cold-chain operators and increasingly, smart warehouses.

“Smart warehouses and logistics hubs are becoming major users of automation, robotics and cold-storage systems, which create high and variable energy loads. BESS helps these facilities manage peak demand, stabilise operations during outages and reduce overall energy costs,” says Tee.

“We also target EV-charging operators, microgrid applications for islands and remote estates, and real-estate developers integrating distributed energy systems into RE-ready buildings and smart townships.”

According to Petra, several developers have expressed interest in exploring projects to export RE from Johor via Enegem, operated by the entity Single Buyer, serves as Malaysia’s platform for cross-border renewable trade and is aligned with the Asean Power Grid (APG) vision. The platform was introduced in April of 2024 and recently launched its auction for cross-border green electricity trade with Singapore after initial pilots.

The auction reflected Malaysia’s technical readiness for structured cross-border RE trade. However, the high demand has constrained the scale-up of renewable energy (RE) capacity and grid readiness in southern Peninsular Malaysia, Petra tells ESG in an email response.

Although the exact numbers from the winning bids cannot be disclosed, Petra shares that the initial auction demonstrated good demand for RE from Singaporean buyers, and that the prices indicate the value Singapore attaches to reliable, certified Malaysian renewable electricity.

The first successful RE exports of up to 50MW in December 2024 have also enhanced Petra’s and the system operators’ understanding of Johor’s energy profile and cross border flow requirements.

From January to mid-November 2025, a total of 233.81GWh has been exported through Enegem, according to Petra.

The ministry says it will continue to ensure that RE supply remains predictable for strategic industries in the state, while also keeping it export ready.

The Cross-Border Electricity Sales, the framework designed to facilitate energy trade to other countries, will also continue to evolve based on operational experience from Enegem’s activities. Petra shares that recent updates are focusing on clarifying participant eligibility, tightening technical requirements, and refining auction terms to reflect lessons from the pilot.

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