Malaysia to Review Ban on Export of Renewables

Following more than a year-long ban on the export of renewable energy, the Malaysian government is reviewing the imposition. This was revealed by the country’s Minister of Natural Resources, Environment and Climate Change, Nik Nazmi Nik Ahmad.

The recently appointed minister informed that the review  has been discussed twice in Cabinet meetings under the recently-established coalition government. It is being undertaken by the environment ministry and as well as by Malaysia’s economic and trade ministries.

Nik Nazmi said that the discussions are  underway and the papers will be presented to the cabinet soon. He was speaking at the launch of Malaysia’s Energy Transition Outlook (METO) report, jointly published by the environment ministry and the International Renewable Energy Agency (IRENA).

The ban was  instituted  in October 2021, by a government led by former prime minister Ismail Sabri Yaakob. It focused primarily on halting Malaysia’s export of renewable energy to Singapore with the goal of  promoting domestic renewable sector and supporting the domestic players in the country. However, it did not stop the East Malaysian state of Sarawak from discussing the possibilities of exporting  hydro-power to Singapore last year via submarine cables linking Kuching and the island republic.

Expressing his opinion on this review, Nik Nazmi opined, “We can leverage the strong demand for renewable energy from our neighbours to create a financial framework to decarbonise,” and further added that  exporting renewable energy presents tremendous opportunities for Malaysia, and potentially places it at the centre of the ASEAN power grid.

He stressed on the necessity of selling renewable energy at market rates and said, “If Malaysia does export its renewable energy, we can and must sell at market rates, which will give us the wherewithal to scale up, including to make technology cheaper and introduce new technologies such as battery storage, among other things.”

But he also pointed out,“We also do not have to sell all the green electrons produced – we can ration it to ensure that Malaysian industries benefit.”

However,Malaysia may ultimately still be a net importer of electricity, as per the recent METO report. It said that in a 1.5 degree scenario, Peninsular Malaysia would be importing power, while the East Malaysian states of Sabah and Sarawak would be power exporters, as the latter two regions have a strong supply of hydro-power, which would outstrip peak electricity demand up to 2050. Further,the planned expansion of hydro-power by Sarawak would create an opportunity for electricity trade with Indonesia and Brunei, said the report.

Calling hydro-power an important resource, the report said that hydro-power can balance variable renewable supply regionally and aid regional decarbonisation.

Moreover, the report also highlighted the opportunity that Malaysia has through the deployment of energy storage and expansion of regional interconnection. To achieve the energy transition in the most cost-effective, however, will demand higher renewables integration within Malaysia’s national power systems and regionally with its neighbours.