Nik Nazmi: RM637b required for 70% RE deployment in power sector by 2050

This is part of the govt’s strengthened commitment to pursue an aspirational low-carbon energy pathway


NATURAL Resources, Environment and Climate Change (NRECC) Minister Nik Nazmi Nik Ahmad (picture) announced the government’s strengthened commitment to pursue an aspirational low-carbon energy pathway to accelerate Malaysia’s renewable energy (RE) deployment in the power sector to 70% (55 gigawatt [GW]) by 2050, compared to the current level of 25% (10GW) and the existing target of 40% in 2050.

He estimated that a new investment of approximately RM637 billion is required until 2050, which includes investments in RE generation sources and grid infrastructure strengthening (including transmission line enhancement, energy storage system integration and grid system network operation augmentation).

Commenting further on the amount of the investment, Nik Nazmi said the transition comes at a cost and that Malaysia must ensure the readiness of the grids.

“It is vital to go in tandem — we must prepare effectively for the system’s transition to greater RE, with a target of 70% capacity by 2050. Currently, capacity is at 25%, combining hydro, solar and other resources.

“Even in terms of capacity, we still have a long way to go. The rate of mixed energy is slightly lower. As a result, we hope that the measures we have recently implemented, as well as our attempts to introduce the Energy Efficiency & Conservation Act at the upcoming Parliamentary session, will aid in making the transition as smoothly as possible,” he said to the media at Tenaga Nasional Bhd (TNB) Energy Transition Conference in Kuala Lumpur today.

According to the Malaysia Energy Transition Outlook report, electrification and energy efficiency are key measures in Malaysia’s net-zero pathway, solar photovoltaics will be the key technology leading Malaysia’s energy transition, encouraging greater renewable energy (RE) investment and Malaysia’s opportunity to provide supply and flexibility to neighbouring countries with diverse renewable power systems.

Nik Nazmi also added that the government has decided to allow cross-border trade of RE as a two pronged-strategy for Malaysia to capitalise and explore new higher-value RE demand in neighbouring countries to enable Malaysia offering and enjoying greater grid flexibility with higher RE integration under the Asean Power Grid initiative.

He believed that the move would promote interconnectivity across the 10 Asean member states with its combined population of more than 670 million and counting, allowing for cross-border electricity trade across the region, where by 2030, he said Asean is believed to be the world’s fourth economy.

Concerning green hydrogen as a fuel alternative, Nik Nazmi stated that the government, in partnership with state governments and utilities such as TNB, is eager to investigate the possibility of harnessing a new energy carrier and the economic benefits it would offer.

Through the National Energy Transition Roadmap and the Hydrogen Economy and Technology Roadmap, which are expected to be released later this year, NRECC aims to unlock the hydrogen economy including how Malaysia can attract investments in its production and ultimately pave the way for Malaysia to become a major export hub for green hydrogen by 2027.

He added that NRECC is seeing the value in cooperation to drive the transition domestically, regionally and internationally for the hydrogen economy.

Separately, on the government’s commitment towards developing the electric vehicle (EV) industry strategically, Nik Nazmi stated that his ministry is examining the existing procedures for approving EV charging systems to reduce the time in processing the installation approval.

Under the Low Carbon Mobility Blueprint 2021-2030, he said Malaysia is on track to achieve the target of 10,000 public charging stations in the country by 2025, as well as the target to achieve 1.5 million EVs in the country by 2040.

Commenting on the government’s measure in ensuring the affordability of EV to achieve the 1.5 million EVs by 2040, Nik Nazmi said even though it is still at the beginning stage, he has seen many changes.

“The game changer will be when the cost of an EV falls below RM100,000 — we have yet to reach that stage, but many brands are now providing (EV) for as low as RM160,000. That (move) has already altered people’s perceptions of what an EV is, which is no longer a luxury vehicle.

“Also, Tesla, which has long been perceived as a luxury vehicle, now its cheapest model available in Malaysia is less than RM200,000, which is the world’s second lowest price. This is also a game changer as a result of Tesla Inc’s decision to establish a regional headquarters in Cyberjaya,” he further added.

However, he reminded that the situation should not be viewed solely through the lens of EVs, but rather through the lens of the entire ecosystem including public transportation, micro mobility and logistics because it must be viewed holistically.