Malaysia

Malaysia
Renewable Energy Business Opportunities
31 March 2021
Malaysia - Renewable energy business opportunities 1
Note to Readers
Disclaimer
The Foreign, Commonwealth & Development The report highlights key findings on the research
Office (FCDO)’s ASEAN Prosperity Fund team has performed, key information available or address
commissioned this series of reports to Ernst & matters. This study relied on a combination of
Young LLP (EYLLP) where EYLLP has undertaken research sources (e.g., reports, presentations and
a market study for six countries in ASEAN. Noted new articles) and local knowledge, we have not
that Indonesia version was initially written by Tetra verified the accuracy, reliability or completeness of
Tech ES Inc in 2019 then updated by EYLLP in 2021. such information or sources. With respect to market
The summary of the findings are included in this estimates referenced throughout the report, there
report (hereafter “report”). This report is only for will usually be differences between estimated and
general information. It doesn’t intend to provide actual results, because events and circumstances
or should not be considered for accounting, tax or frequently do not occur as expected and those
other professional advice. On any specific matter, differences may be material.
reference should be made to the appropriate
The views reflected here are the views of the
advisor.
EYLLP and do not necessarily reflect the views of
the global EY organisation or its member firms.
Moreover, they should be viewed in the context of
the time they were expressed.
2 Malaysia - Renewable energy business opportunities
About DIT
Department for International Trade (DIT)
The Department for International Trade is the specialist
Government department that supports:
• Foreign companies seeking to set up or expand in the UK,
and
• UK-based companies to trade internationally.
The Department for International Trade provides a fully
integrated advisory service, delivering the latest business
intelligence through a global network of commercial teams
worldwide. DIT also works in close partnership with investment
and economic development agencies in England, Scotland,
Wales and Northern Ireland to help overseas companies to
maximise their business objectives in the UK.
For more information, please contact Trade.KualaLumpur@fco.gov.uk
Abbreviation & Acronyms

Acronym Explanation Acronym Explanation
AI Artificial intelligence MESI Malaysian Electricity Supply Industry
ASEAN Association of Southeast Asian Nations MOSTI Ministry of Science and Technology
ASEAN ASEAN Green Bond Standards MDV Malaysia Debt Venture Berhad
GBS NEM Net Energy Metering
AMI Advanced metering infrastructure NEDA New enhanced dispatch arrangement
APAEC ASEAN Plan of Action for Energy Cooperation NREPAP National Renewable Energy Policy and Action Plan
BESS Battery energy storage systems NGTP National Green Technology Policy
BOP Balance of plant NEM Government Ministries and Entities
BTM Behind the meter GoMEn
BNEF Bloomberg New Energy Finance NOVA Net Offset Virtual Aggregation
BMI Business Monitor International O&M Operations & maintenance
BIPV Building integrated photovoltaics OpEx Operating expenditure
CAGR Compounded annual growth rate ODI Overseas direct investments
CapEx Capital expenditure P2P Peer-to-peer
DOE Department of Environment PCC Point of common coupling
DAQ Declared annual quantity PKS Palm kernel shell
DIT UK Department for International Trade PMC Project management consultancy
ESG Environmental, social and corporate governance POME Palm oil mills effluent
ECF Equity crowd funding PL Power Ledger
EPP5 National Biogas Implementation PV Photovoltaics
EPC Engineering, procurement and construction PPA Power purchase agreement
EV Electric vehicles QCE Qualifying capital expenditure
EPU Economic Planning Unit RECODA Regional Corridor Development Authority
FiT Feed-in-tariff RM Malaysian ringgit
FDI Foreign direct investments RP2 Regulatory Period 2
GDP Gross domestic product RFP Request For Proposal
GW Gigawatt RFQ Request For Qualification
GSO Grid system operator RETR Renewable Energy Transition Roadmap
GITA Green Investment Tax Allowance RPVI Registered solar PV investor
GITE Green Income Tax Exemption RE Renewable energy
GTFS Green Technology Financing Scheme ROW Right of way
IBR Incentive-based regulation (IBR) SELCO Self-consumption scheme
IoT Internet of things ST Suruhanjaya Tenaga or Energy Commission
ICPT Imbalance cost pass–through SEDA Sustainable Energy Development Authority
IA Implementing agency SREP Small Renewable Energy programme
IPP Independent power producer SCORE Sarawak Corridor Of Renewable Energy
JV Joint venture SO System operation
KASA Ministry of Environment and Water SB Single buyer
KETSA Ministry of Energy and Natural Resources SEB Sarawak Energy Berhad
kV Kilovolt SESB Sabah Electricity Sdn. Bhd
LSS Large-scale solar SRI Socially responsible investments
LCOE Levelised cost of energy SLA Service level agreements
MGTCC Malaysia Green Technology and Climate Change Center SPPA Solar power purchase agreement
MW Megawatt SARE Supply Agreement with Renewable Energy
MWac Megawatt alternating current TNB Tenaga Nasional Berhad
MWh Megawatt-hours TPA Third party access system
MAAQ Maximum annual allowable quantity TWh Terawatt-hours
MF Mesocarp fiber T&D Transmission & distribution
MES- Ministry of Energy, Science, Technology, Environment and UKEF UK Export Finance
TECC Climate Change VPP Virtual power plant
MHLG Ministry of Housing and Local Government WTE Waste-to-energy
MIDA Malaysia Investment Development Authority
Executive Summary
Socio–economic landscape of Malaysia 2025 have been yet to be released. Classification of
large hydropower as renewable energy has reduced
Malaysia is one of the largest economies in the
the new renewable energy capacity requirement
Association of Southeast Asian Nations (ASEAN).
from other non-solar sources. Recently awarded
It has successfully diversified its economy from an
capacity of 1GW solar under LSS4 has reduced new
agriculture/resource–based economy to one that
requirements from solar in the 2021 Generation
is driven by services and high–tech manufacturing.
Development Plan compared to the 2020
Openness for trade and investment has catapulted
Generation Development Plan.
Malaysia to rank 27th in the Global Competitive
Index which is second highest in ASEAN after Under the new government administration of Prime
Singapore. Oil and gas exports contribute to about Minister Muhyiddin Yassin, who was sworn in on
30% of the country’s national income. Malaysia is 1 March 2020, MESTECC has been restructured
also a leading exporter of high–tech electronics, into three different ministries, namely Ministry
including electronic appliances and electronic of Energy and Natural Resources (KETSA),
components. Ministry of Environment and Water (KASA) and
Ministry of Science, Technology and Innovation
Overview of power sector
(MOSTI). KETSA holds the electricity portfolio
The Malaysian government has implemented which governs Suruhanjaya Tenaga (ST) and the
various initiatives to increase the efficiency of renewable energy authority, Sustainable Energy
the power sector. In 2019, the Ministry of Energy, Development Authority (SEDA). Despite this change
Science, Technology, Environment and Climate in administration, Malaysia is expected to continue
Change (MESTECC) announced the second phase the MESI 2.0 scheme with certain initiatives being
of its industry reforms under Malaysia Electricity postponed or to be implemented at a later date.
Supply Industry (MESI) 2.0 that will run up till
Renewable energy market
2025. MESI 2.0 has been established to achieve
four reform initiatives: increase industry efficiency, Malaysia has a high potential to focus its energy
increase green and sustainability energy, enhance mix toward renewable resources. Driving this
customer experience and ensure energy security.1 change will be additions of solar power capacity.
Large-scale-solar (LSS) auctions managed by ST
The demand for electricity is projected to increase
is seen as a transparent mechanism for awarding
4% year on year from 2020–2030. To sustain the
LSS projects and it is expected that to meet the
growing demand, the Malaysian government has
additional 1,098 megawatt (MW) target for solar
set a target of achieving 31% renewable energy
in 2025, ST will release further rounds of auctions
(RE) capacity mix by 2025 and 40% by 2035
of 500MW–1,000MW of electricity. Each of the
for Malaysia (Peninsular Malaysia, Sarawak and
successive auctions to date have resulted in
Sabah). To achieve this, as set out in the Generation
progressive tariff reductions toward grid parity. The
Development Plan (March 2021), Malaysia will
cheapest tariffs in LSS 1 and LSS 4 were Malaysian
require an additional 1.2GW of renewable energy
ringgit (RM) 40 sen (US$9.93 cents)/ kWh and RM15
capacity by 2025 and 3.6GW by 2035. Details on
sen (US$3.72 cents)/ kWh respectively.
the additional installed capacity targets beyond
Investment potential of renewable energy projects in Malaysia as per 2025 targets

Hydro
Solar Wind (small) Geothermal Bioenergy Marine
NA
NA NA
Priority
High Low
Source: EY analysis
1.
Following the change in government in Feb 2020, the former MESTECC’s responsibilities have been divided across three different Ministries. These are the Ministry of Energy and Natural Resourc-
es (KETSA), Ministry of Environment and Water (KASA) and Ministry of Science, Technology and Innovation (MOSTI).
Renewable energy programme The government has also started to encourage

residential, commercial and industrial consumers
The feed–in tariff (FiT) is Malaysia’s financial
to install solar PV for their own consumption
mechanism under the renewable policy and
under the Self-consumption (SELCO) programme.
action plan to catalyse generations of renewable
Unlike the NEM scheme, there are no limits for
energy up to 30MW in size. The renewable
the capacity of off–grid systems.
energy technologies covered under this scheme
are biomass (inclusive of municipal solid waste), The government has also adopted a pro–investor
biogas (inclusive of landfill and sewage), small approach in the power sector with multiple
hydro and solar photovoltaic. As per recent renewable energy market incentives such as the
announcements, the procurement of capacities Green Investment Tax Allowance (GITA), Green
in bioenergy and small hydro are also expected Income Tax Exemption (GITE) (Services) and the
to be on a competitive pricing basis with the FiT Green Technology Financing Scheme 2.0 (GTFS
rates intended to act as a ceiling value. 2.0). These initiatives encourage investment by
reducing financial burden and providing financial
The recent uptake in solar photovoltaic (PV)
support.
power production has been powered through LSS
auctions. The ST started the competitive bidding Malaysia has deep financial markets and an active
process for LSS in 2016. The first tender was commercial loan market that is well established
released in 2016 with a total aggregate capacity for renewable energy projects, especially solar
of 200MW in Peninsular Malaysia and 50MW in projects developed under the LLS schemes.
Sabah, followed by the second round in 2017, with Another common instrument used for financing
an increased total aggregate capacity of 360MW renewable energy projects in Malaysia is green
in Peninsular Malaysia and 100MW in Sabah/ bonds that are issued in the form of green
Labuan. The third round for LSS bidding opened SRI sukuks which are shariah–compliant. The
up in February 2019 with a target aggregate most popular sector that is being funded by
capacity of 500MW and expected commissioning green sukuk issuance has been the renewable
in 2021. The biggest possible package that any energy with seven unique sukuk issuances so
one company can win has been in the range of far, of which five are solar PV projects and two
50MW to 100MW. In May 2020, ST opened the hydropower projects. As of November 2019, there
LSS 4 with 1GW of aggregate capacity, worth up are a total of RM4.4 billion (US$1.1 billion) worth
to RM4 billion (US$992 million) up for auction. of green SRI sukuks issued in Malaysia, starting
This was larger than the preceding rounds. with the world’s first green sukuk, totaling to
RM250 million (US$62 million), being issued by
The Net Energy Metering (NEM) scheme has
Tadau Energy Sdn. Bhd. in 2017 to finance a solar
played a key role in driving up rooftop solar
power plant in Malaysia. The funding for other
adoption. The programme was first introduced
renewable energy technology such as biomass
in 2018 and allows excess solar PV generated
and biogas projects is relatively harder as it
energy to be exported back to the grid on a one–
requires higher degrees of diligence, review of
on–one offset basis, i.e., for every 1kWh exported
feedstock supply agreements, recourse from
to the grid, the NEM customer’s bill will be offset
project sponsors, etc.
against 1kWh consumed from the grid. However,
the net export capacity should not exceed 75%
of the maximum demand of the energy metering
of the customer. As of February 2021, the NEM
scheme is in its third iteration as the NEM 3.0.
The NEM 3.0 programme will be in effect from
2021 to 2023 and the total quota for allocation is
up to 500MW.
Conclusion Market values for renewable energy projects

At the moment, Malaysia’s renewable energy The total market value for renewable energy is
sector is in a ripe stage for rapid development. estimated at US$1.6 billion between 2021–2025,
Investors and providers of technical expertise based on an analysis of Malaysia’s energy
have the opportunity to participate in a vibrant policies, masterplan and current market
and competitive market that has clear regulations conditions.
and wide access to capital and grid network
In general, there are six types of renewable
opportunities.
energy sources: solar, wind, hydro, geothermal,
bioenergy and marine. However, there are no
active projects in geothermal, wind and marine as
these renewable technologies are not technically
or financially feasible in Malaysia. There is also
a lack of specific regulatory framework for the
development of these types of energy. So for
the aforementioned reasons, market values of
investment potential have been calculated for
solar, hydro–small and bioenergy from biomass,
biofuel and waste-to-energy (WTE) only.
Estimated market value of renewable energy and related projects (US$ million, 2021–2025)
Technology Market size Foreign share in market size
Solar PV 1,362 694
Small hydro 49 24
Biomass 129 63
Biogas 37 17
WTE 3 1
Total 1,580 799
Source: EY research.
Table of Contents
Note To Readers 1
About DIT 3
Executive Summary 4
Abbreviation & Acronyms 5
1. About The Study 12
2 Malaysia Energy Industry Background 14
2.1 Socio–Economic Landscape 14
2.2 Key Government Stakeholders 16
2.3 Major Government Policies and Programmes in The Power Sector 19
2.4 Overview of Power Market 21
3 Renewable Energy Market Characteristics 26
3.1 Major Government Policies and Programmes 26
3.2 Costs and Technical Considerations 35
3.3 Project Development Lifecycle 36
3.4 Financing 41
3.5 Key Considerations for Renewable Energy Investments in Malaysia 43
4 Market Conditions for Solar PV Development 44
4.1 Utility–Scale, Ground–Mounted Systems 45
4.2 Rooftop Solar PV 49
5 Market Conditions for Hydropower Development 58
5.1 Large–Scale Hydropower 58
5.2 Small–Scale Hydropower 60
6 Market Conditions for Bioenergy Power Development 66
6.1 Biomass 66
6.2 Biogas 70
6.3 Waste–To–Energy (WTE) 74
6.4 Biofuels 78
7 Market Conditions for Electrical Networks and Storage 80
7.1 Smart Grid Systems 80
7.2 Battery Energy Storage Systems (BESS) 82
8 Top Business Opportunity Areas for UK Companies 83
8.1 Business Opportunities for UK Companies 83
8.2 Upcoming Renewable Energy Projects 83
8.3 Top UK Companies Ready to Export 90
9 Appendix 92
Appendix 1: UK Low–Carbon Capabilities 92
Appendix 2: Upcoming Projects 104
Appendix 3: List Of References 126
Figures
Figure 2.1 GDP Per Capita in Select Southeast Asian Countries (Nominal US$, 1990–2025) 15
Figure 2.2 Cumulative Net Inflows of FDI Between 2014 and 2019 (US$ billion) 15
Figure 2.3 Structure of Power Market in Southeast Asian Countries (2019) 16
Figure 2.4 Malaysia Electricity Market Structure 16
Figure 2.5 Key Government–Linked Vius in The Power Sector 17
Figure 2.6 Summary of Key Government Agencies Relevant to The Power Sector 18
Figure 2.7 Illustrative Representation of The Electricity Tariff Based On The Two Components
of The IBR Framework 20
Figure 2.8 Electricity Consumption in Malaysia (TWh, 2000–2030) 21
Figure 2.9 Electricity Generation in Malaysia (TWh) 22
Figure 2.10 Total Electricity Generation and Electricity Generation Per Capita (2018) 23
Figure 2.11 Installed Capacity by Fuel Type (MW, 2018) 23
Figure 2.12 Projected Capacity Mix for Peninsular Malaysia (Sabah and Sarawak Exclusive) 24
Figure 2.13 Electricity Tariff Rates for Various End Users from 2008–2019 (RM/kWh) 25
Figure 3.1 Proposed Additions Under Tenewable Energy in Peninsular Malaysia from 2021–2025 (MW) 26
Figure 3.2 Key Acts and Policies Governing Renewable Energy in Malaysia 27
Figure 3.3 Overview of The Peer–To–Peer (P2P) Energy Trading Pilot 32
Figure 3.4 Levelised Costs of Electricity (LCOE) Ranges for Various Generation Technologies
in Malaysia 35
Figure 3.5 Overview of The Large–Scale–Solar (LSS) Procurement Process 36
Figure 3.6 LSS Application and Procurement Process 37
Figure 3.7 NEM Project Development Lifecycle 39
Figure 3.8 Srep Application Process 40
Figure 4.1 Solar Irradiation Across Malaysia 44
Figure 4.2 LSS Raw Offer Price vs. Offered Export Capacity 46
Figure 4.3 Cost Breakdown for Grid–Connected, Ground–Mounted, Centralised PV Systems 48
Figure 4.4 Grid–Connected Rooftop Capacity from 2012–2023F (MW) 49
Figure 4.5 Method of Payment for RVPI 51
Figure 4.6 Off–Grid Solar Capacity from 2012–2019 (MW) 53
Figure 7.1 Capital Costs for 20MW/80MWh Fully Installed BESS 82
Figure 8.1 Market Opportunity for Renewables Investment in Malaysia (US$ million) 87
Figure 8.2 Summary of UK Expertise Across Sectors and Services (Number of Companies) 90
Table
Table 3.1 FiT Rates in Malaysia (in RM sen and US$ cents/kWh) 29
Table 3.2 Types of Bonuses for Use of Solar PV as Building Material 34
Table 3.3 Examples of Commercial Banks Active in Renewable Energy in Malaysia 41
Table 3.4 Green Sri Sukuks Issued in Malaysia to Finance Renewable Energy Projects 42
Table 4.1 PV Cell and Module Production and Production Capacity (2019) 48
Table 4.2 Estimated Market Size — Solar PV (2021–2025) 54
Table 4.3 Supply Chain and Financing Analysis for Solar PV (%) 54
Table 4.4 Supply Chain and Financing Market Value Analysis for Solar PV (US$ million) 54
Table 4.5 Summary of Upcoming Projects in Solar PV 55
Table 5.1 Small Hydropower Plants (<30MW) 60
Table 5.2 Estimated Market Size — Small Hydropower (2021–2025) 63
Table 5.3 Supply Chain and Financing Analysis for Small Hydropower (%) 63
Table 5.4 Supply Chain and Financing Market Value Analysis for Small Hydropower (US$ million) 63
Table 5.5 Summary of Upcoming Projects in Small Hydro (<30MW) 64
Table 5.6 Summary of Upcoming Projects in Large Hydro (>30MW) 65
Table 6.1 Biomass Power Plants in Malaysia 68
Table 6.2 Estimated Market Size — Biomass (2021–2025) 68
Table 6.3 Supply Chain and Financing Analysis for Biomass (%) 69
Table 6.4 Supply Chain and Financing Market Value Analysis for Biomass (US$ million) 69
Table 6.5 Summary of Upcoming Projects in Biomass 69
Table 6.6 Estimated Market Size — Biogas (2021–2025) 72

Table 6.7 Supply Chain and Financing Analysis for Biogas (%) 72
Table 6.8 Supply Chain and Financing Market Value Analysis for Biogas (US$ million) 72
Table 6.9 Summary of Upcoming Projects in Biogas 73
Table 6.10 Current WTE Plants in Malaysia 75
Table 6.11 Estimated Market Size — WTE (2021–2025) 75
Table 6.12 Supply Chain and Financing Analysis for WTE (%) 77
Table 6.13 Supply Chain and Financing Market Value Analysis for WTE (US$ million) 77
Table 6.14 Summary of Upcoming Projects in WTE 77
Table 6.15 Summary of Upcoming Biofuel Blend Roll Outs 78
Table 6.16 Current Biofuel Plants in Malaysia 79
Table 7.1 Current Microgrids in Place in Malaysia 81
Table 8.1 Summary of Business Opportunities for UK Companies 84
Table 8.2 Seda E–Bidding Opportunities As of 24 March 2021 88
Table 8.3 Potential Opportunities for UK Companies 89
Table 8.4 UK Companies Involved in Renewable Energy and Green Financing (Non–Exhaustive) 91
1. About The Study

Background Step 1: Estimating the value of the market
The UK has provided leadership in addressing the A B
challenges of climate change and in supporting C
= Installed = Project
X = = Market
the shift toward a low–carbon economy across capacity cost (US$
value (US$)
the world. Since the Paris agreement on climate (MW) per MW)
change in 2016, the world has been undergoing
a transition toward low–carbon technologies. US$1.5
US$300
This represents opportunities for UK companies, Example: 200MW X million =
million
which have wide–ranging expertise in policy and per MW
regulation, and in technological know–how such as
research, innovation, manufacturing, engineering Installed capacity (2020–2025)
and renewable energy technologies. The size of the market has been estimated based on
Purpose of study reviews of Malaysia’s national energy master plans,
such as the generation plan 2019 that was published
A greater understanding of the ASEAN renewable by ST in February 2020, in order to determine the
energy market would support UK companies in planned and expected installed generating capacity
tapping on the opportunities, in particular the to be added between 2020–2025.
export of its low–carbon capabilities. This study
provides an overview of the power market in The renewable energy capacity additions
Malaysia and details of the renewable energy announced were further split by the various energy
market, including major government policies and types, e.g., 2,172MW for solar capacity additions,
programme, ownership and financing. Market while on–solar capacity additions were further
opportunities for foreign investments are then segregated based on current renewable energy
assessed and identified. shares in the capacity mix and tender trends.
Study approach Project cost
This study analyses the power market in Malaysia Project costs are determined based on the
across the following types of renewable energy: estimates of levelised cost of electricity (LCOE) or
solar PV, hydropower, bioenergy (biomass, biogas actual project costs, where information is available.
and biofuels), electricity networks and storage Sources used include research agencies such as
(smart grid and battery storage). Bloomberg New Energy Finance (BNEF), GlobalData
and International Renewable Energy Agency
Market size estimation (IRENA).
The size of the renewable energy market in Step 2: Estimating the market value for each
Malaysia was assessed between 2020–2025 and supply chain input
further broken down by technology type, supply
chain value added, and foreign and/or domestic The contributions from foreign and domestic
share. businesses for each supply chain input were
allocated based on our knowledge of the local
market and available data.
E
D
= Market
C = Market
value of
= Market X share per =
a specific
value (US$) supply chain
supply chain
input (%)
input (US$)
20% (for
consulting
US$300 US$60
Example: X and =
million million
engineering
services)
Step 3: Estimating the Foreign Share Market Exchange rate

Value of Each Supply
Where otherwise stated, the exchange rate used in
The contributions from foreign and domestic this report is the rate announced by Bank Negara on
businesses for each supply chain input were 17 February 2020:
allocated based on our knowledge of the local
market and available data. US$1 = RM4.0300
Opportunities for UK companies
This study then identifies top business opportunities
E G for UK companies by analysing their strengths
= Supply F = Market and weaknesses, current market positioning and
chain input X = Foreign = value of
market share (%) foreign mapping these against the respective markets and
share (US$) share (US$) supply chain components.
Sources of information
This study relied on a combination of research
sources (e.g., reports, presentations, news articles)
US$60 US$42 and knowledge of the local markets from our local
Example: X 70% =
million million teams. A list of references, including publications,
presentations and articles for this study, is provided
at the end of this report.
2. Malaysia Energy Industry

Background
2.1 Socio–Economic
Landscape of Malaysia
Located in the Malay peninsula and the island of Malaysia is a leading exporter for oil and gas
Borneo, Malaysia is one of the largest economies exports which contributes to approximately 30%
in ASEAN. The economy is fairly diversified from of its national income.1
an agriculture or resource based economy. The Recent falls in oil and commodity prices have
economy is driven by services and high–tech directly impacted Malaysian exports. The country
manufacturing. The country has seen steady targets to achieve high income status in the
growth in recent years and benefited from trade coming years while sustaining stable economic
and investment backed by solid infrastructure. growth in such challenging external environments.
Malaysia — country overview Population (2019): 32.4 million

GDP (2019): US$337 billion
Annual GDP growth (2017–19): 2.75%
Kuala Lumpur
(capital)
Source: Oxford Economics.

1
World Bank, Country Overview – Malaysia, https://www.worldbank.org/en/country/malaysia/overview.
In mid–term (2020–2025), it is projected that Malaysia’s economy will keep growing at the pace of 3.5%
annually. The GDP per capita is forecast to grow 7.3% annually to US$17,3690 in 2025.1
Figure 2.1: GDP Per Capita in Select Southeast Asian Countries (Nominal US$, 1990–2025)
Malaysia in the period of 2020–2025
• Real GDP annual growth rate: 3.5%
• GDP per capita annual growth rate: 7.3%
20,000 Indonesia Philippines

Malaysia Thailand
16,000
Myanmar Vietnam
12,000
8,000
4000
1990 1995 2000 2005 2010 2015 2020 forecast 2025 forecast
Malaysia’s stable economy makes it an attractive January–September 2019, the United Kingdom
destination for foreign investment. Foreign direct had five major projects approved with a total
investment (FDI) inflows into the country have registered investment of US$369 million. In terms
been between US$9 billion and US$12 billion per of the quantum of FDI, the UK ranked sixth among
year since 2010. 2 Malaysia is one of the highest all countries and territories. 3 The total stock of FDI
recipients of FDI in the region, ranking third behind rose to RM691.6 billion (US$ 172 billion), a rise of
Indonesia and Vietnam. around 9.6% compared to 2018 level of RM613.2
billion (US$ 152 billion).4 Due to the COVID-19
Based on the data from the Malaysian investment
pandemic, media reports suggest that FDI inflows
development authority (MIDA), the majority of
dropped by 56% in 2020 to US$ 3.4 billion.5
investments to Malaysia has come from China,
Singapore, Japan and the United States. Between
Figure 2.2: Accumulative Net Inflows of FDI Between 2014 and 2019 (US$ billion)
114
79
60
48 44
17
Indonesia Vietnam Malaysia Philippines Thailand Myanmar

Source: World Bank – Databank
1
Oxford Economics
2
UNCTAD World Investment Report 2019, https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf.
3
Malaysia Investment Data Authority, https://www.mida.gov.my/home/facts-and-figures/posts/.
4
2019 Malaysia Investment Performance Report, MIDA, https://www.mida.gov.my/wp-content/uploads/2020/12/20200421151258_MIDA20IPR20201920fullbook_FINAL.pdf.
5
“Malaysia says FDI inflows dropped 56% in 2020 to $3.4 billion”, Today online, 2 March 2021, https://www.todayonline.com/world/malaysia-says-fdi-inflows-dropped-56-2020-34-billion.
2.2 Key Government

Stakeholders
The Malaysian power sector follows the regionally by three government–linked companies and is
prevalent model where the state utility dominates heavily regulated by the government, with only
the landscape as a single buyer (SB) of power the generation segment open to private sector
as shown below. The power sector is dominated participation.
Figure 2.3: Structure of Power Market in Southeast Asian Countries (2019)
Vertically integrated Single–buyer model

Wholesale spot Retail Electricity future
regulated utilities with independent power
market competition market*
producers (IPPs)
Malaysia Vietnam Philippines Singapore
Thailand
The single buyer procures electricity from IPPs and Tenega Nasional
Berhad (TNB) generation to meet demand at least cost
Indonesia
Myanmar
Source: IRENA – Southeast Asia Renewable Energy Market Analysis (2018), Singapore’s EMA, EY analysis.
* According to Singapore’s energy market authority, the electricity futures market enables the entry of independent electricity retailers and
facilitates new business models. As of February 2020, all households in Singapore can freely choose their electricity provider.
The overall electricity market structure is shown below.

Figure 2.4: Malaysia Electricity Market Structure
Policymaker Ministry of Energy and Natural Resources

(KETSA)1
Regulators SEDA
ST
(Renewable energy authority)
Vertically integrated utilities (VIUs)

IPPs
Sarawak Energy Berhad Sabah Electricity Sdn. Bhd. TNB
(SEB, State of Sarawak) (SESB, State of Sabah) (Peninsular Malaysia)
Power purchase
Transmission Transmission Transmission agreement (PPA)
Distribution Distribution Distribution Single buyer
1
Please note: Since the change in government in Feb 2020, MESTECC responsibilities have been divided across three different Ministries: KETSA, KASA and MOSTI (see page 10)
KETSA is responsible for the management of the VIUs and other major players
energy sector, including renewable energy projects,
TNB is the largest vertically integrated electric
while KASA is the ministry responsible for climate
utility in Malaysia. It is also the monopoly operator
change. KETSA is responsible for the overall energy
of all electricity transmission and distribution (T&D)
planning, supervision and regulation. KETSA holds
networks across Peninsular Malaysia. The Malaysian
the electricity portfolio that will govern ST and
government owns 65% of TNB through various
the renewable energy authority, SEDA. Meanwhile,
entities (including Khazanah Nasional Berhad,
KASA will be responsible for matters related to
Permodalan Nasional Berhad, etc.).
green technology.
TNB is the largest player in the electricity
ST is a regulatory body responsible for regulating
generation segment with a substantial share
the energy sector, specifically the electricity and
of 52%. 3 It enjoys monopoly on transmission,
piped gas supply industries while SEDA is the
distribution and retail in Peninsular Malaysia.
statutory body that administers the implementation
The grid is owned by TNB and managed by the
of FiT schemes and new renewable energy
ring–fenced grid system operator (GSO) and SB
programmes such as NEM and SELCO.
within the public utility.4 In the longer term, the
The power sector is dominated by three Commission plans to open the grid and retail
government–linked companies. The sector is electricity to other players as well. Other utilities
heavily regulated by the government, with only include SEB and SESB.
the generation segment open to private sector
participation.
Figure 2.5: Key Government–Linked VIUs in The Power Sector
TNB SESB SEB
Generates 52% of Malaysia’s Generates 11%7 of Malaysia’s

Only power utility
Market share power and has monopoly on T&D power and has monopoly on
firm in Sabah
in Peninsular Malaysia2 generation, T&D in Sarawak
Generation
12,873MW2 1,235MW 5,308MW6
capacity
Generation Power primarily from coal, gas, Primarily from gas, diesel, solar Primarily from gas, coal and
capacity solar and hydro2 and hydro5 hydro6
1
NST – Opportunity to capitalise on green technologies (14 March 2020). https://www.nst.com.my/opinion/columnists/2020/03/574645/opportunity–capitalise–green–technologies
2
TNB investor presentation (2019). https://www.tnb.com.my/assets/news_and_highlights/TNB_Handbook_Period_Ended_Mar19_–2.pdf.
3
ST – Peninsular Malaysia Electricity Supply Industry Outlook (2019). https://www.st.gov.my/ms/contents/files/download/106/Peninsular_Malaysia_Electricity_Supply_Industry_
Outlook_2019_compressed.pdf.
4
The Star news report (14 May 2019). https://www.thestar.com.my/business/business–news/2019/05/14/tnb–continues–to–play–active–role–in–re.
5
ST – Sabah Electricity Supply Industry Outlook (2019). https://www.st.gov.my/contents/files/download/106/SABAH_ELECTRICITY_SUPPLY_INDUSTRY_OUTLOOK_2019.pdf.
6
Sarawak Energy – What we do. https://www.sarawakenergy.com/what–we–do/power–generation.
7
Based on total generation capacity of 46,191MW that was derived from TNB Installed capacity and market share.\
TNB is expected to maintain a dominant position, relatively fragmented. There is no single firm that
given its importance to the economy and its stands out as a dominant consolidated private
long–established market position. Private sector player.
participation is present in the generation segment.
In 2018, TNB set up a subsidiary, TRe, to participate
IPPs provide the balance–generation capacity with
in the renewable energy market.1 Similar trends are
Malakoff and Edra Energy owning 28% and 13%
also being viewed among other dominant oil and gas
respectively and the remaining 7% owned by other
players in Malaysia, such as Petronas, which stepped
private IPPs.
beyond conventional oil and gas to invest in the
While the thermal generation market is highly renewables sector through its subsidiary Petronas
dominated by domestic and national power New Energy.
companies, the renewable energy market is
In summary, there are a number of stakeholders with
clearly identified roles as shown in the figure below.
Figure 2.6: Summary of Key Government Agencies Relevant to The Power Sector
Key stakeholders Role relevant to electricity sector
Economic Planning Unit (EPU) Principal government agency now under the Minister of Economic Affairs2 that focused on
development planning and blueprinting the growth of Malaysia’s energy policy3
Ministry of Energy and Natural Facilitator of growth and regulator for the energy and natural resources (including forestry
Resources (KETSA) and wildlife)
Suruhanjaya Tenaga (ST) Handles all the regulatory functions of the Ministry of Energy; regulates the energy supply
activities and enforces energy supply laws
Sustainable Energy Administers and manages the implementation of the FiT system and NEM system for rooftop
Development Authority (SEDA) solar
Malaysia Green Technology Agency under the purview of Ministry of Environment mandated to lead the nation in the
and Climate Change Center areas of green growth, climate change mitigation and climate resilience and adaptation
(MGTCCC)
Other stakeholders Role relevant to electricity sector
Malaysia Investment Implementation agency for green investment tax allowance (GITA) and green income tax
Development Authority (MIDA) exemption (GITE)
MESI trust account Focuses its efforts on the implementation of energy efficiency programme
Business council for sustainable Fosters active participation of the business and industrial community in caring for the
development in Malaysia environment
1
The Star (14 May 2019). https://www.thestar.com.my/business/business–news/2019/05/14/tnb– –to–play–active–role–in–re.
2
Free Malaysia Today News Report – Guan Eng: No overlap between Economics and Finance (20 May 2018). https://www.freemalaysiatoday.com/category/nation/2018/05/20/guan–eng–no–overlap–
between–economics–and–finance–ministries/.
3
World Data Atlas – Sources, Economic Planning Unit, Malaysia. https://knoema.com/atlas/sources/EPU.
2.3 Major Government

Policies and Programme
in The Power Sector
The Malaysian government has implemented • Opening up of the fuel supply market
various initiatives to increase the efficiency and incentivising IPPs to source their fuel
of the power sector. In 2010, the Malaysian independently rather than relying on state–
government introduced a reform known as the owned fuel providers (TNB fuel services (for
Malaysia Electricity Supply Industry Reform (MESI) coal) and PETRONAS (for gas)). Through the
1.0. The MESI 1.0 programme aimed to achieve introduction of this independent sourcing
secure and reliable supply of energy, secure mechanism, IPPs are free to source their own
economically competitive tariffs and improve fuel at prices that are below the regulated
customer satisfaction and choice. To build on the prices. It is believed that this approach will
success of MESI 1.0, the government announced allow for cost savings to be passed on to end
the commencement of the next series of Electricity customers
Supply Industry reforms, MESI 2.0.
• Establishing a hybrid generation market that
Malaysia Electricity Supply Industry Reform facilitates entry of new market participants
(MESI 2.0) creates a capacity market and promotes
In September 2019, the Malaysian government efficiency and competition (the new enhanced
announced the second phase of its industry dispatch arrangement (NEDA)). Power
reforms under MESI 2.0 that will run up till 2025.1 producers with excess capacity or with expired
Despite the recent government administration PPAs can utilise the improved NEDA platform to
change, MESI 2.0 can be expected to continue but sell both capacity and energy via spot contract
could face potential delays in the implementation of to the SB, who will then distribute electricity to
certain initiatives. retailers
MESI 2.0 has been established to achieve four • Establishing third–party access (TPA)
reform initiatives: increase industry efficiency, framework to promote third–party participation
increase green and sustainability energy, enhance in the generation and retail segment of the
customer experience and ensure energy security.1 value chain
To achieve these goals, MESI 2.0 involves • Facilitating choice in retail, thereby empowering
implementing measures such as: consumers to make their own choices on energy
supply packages. A pilot project is planned in
• Promoting sustainability in Malaysia by 2020 with full operations expected by 2021,
encouraging green energy producers and subject to the installation of smart meters and
consumers to adopt renewable energy sources. other necessary infrastructures by TNB
Green products to be available include green
tariffs, green gentailers and tradable green • Increasing transparency and reducing
certificates conflicts of interest by transitioning the SB to
independent entities to ensure a level–playing
field in the Malaysian energy supply industry
• Maintaining reliability and system security
through continuous investment in the system
1
MESTECC – Reimagining Malaysian electricity supply industry (MESI 2.0). https://www.mestecc.gov.my/web/wp–content/uploads/2019/11/MESI_2.0_IGEM19–web.pdf.
Incentive–Based Regulation (IBR)1

The Incentive–Based Regulation (IBR) was The IBR mechanism is intended to reflect the
introduced in early 2014 to allow a structured, actual costs of generation in consumer bills
transparent and informed way of tariff–setting and encourage power producers to increase
aligned to the capital expense (CapEx) and efficiency.
operating expense (OpEx) spending of utilities.
The first regulatory period of the ICPT included
Under the IBR framework, the retail electricity
the three–year period from January 2015 to
tariff is made up of two components: the base
December 2017. Malaysia is now in the second
tariff and an imbalance cost pass–through (ICPT).
regulatory period (RP2), another three years
The base tariff reflects: starting from 2018 to 2020. Movements in the
• CapEx and OpEx of transmission, distribution, prices of imported gas and coal prices, as well
system operation (SO) and SB operation as domestic gas in the previous six months, will
be reflected as a surcharge or rebate in the
• Return on regulated asset base of following six months.
Transmission, Distribution, SO and SB
While initiatives like MESI 2.0 and IBR are
• Power purchase cost charged by generators designed to address the challenges of the
(including base price for fuel) to SB power sector as a whole, there are several other
While the ICPT reflects: mechanisms like FiT schemes, LSS, NEM and
SELCO, which are focused on the development of
• Half–yearly tariff adjustment to reflect renewable energy in Malaysia. These programme
variations in fuel costs, costs associated with are discussed further in section 3.
PPAs and service level agreements (SLAs)
and renewable energy displaced costs
Figure 2.7: Illustrative Representation of The Electricity Tariff Based on The Two Components of The
IBR Framework
RM/kWh
ICPT surcharge ICPT to reflect

fuel cost and
generator cost
ICPT rebate variations
Base tafiff
Year 1 Year 2 Year 3
Source: ST – Guidelines On Tariff Determination Under Incentive Based Regulation For Tenaga Nasional Berhad, ST – https://www.st.gov.my/ms/con-
tents/publications/guidelines_electricity/2016/Registered%20Guidelines%20on%20Tariff%20Determination%20Under%20IBR%20for%20TNB.pdf.
https://www.st.gov.my/contents/highlight/2018/Components%20of%20IBR.pdf.
1
MESTECC – Reimagining Malaysian electricity supply industry (MESI 2.0). https://www.mestecc.gov.my/web/wp–content/uploads/2019/11/MESI_2.0_IGEM19–web.pdf.
2.4 Overview of The Power

Market in Malaysia
Malaysia’s power consumption, driven both by Between 2000 and 2020, electricity consumption
an increase in economic activity and a growing grew at a compounded annual growth rate
population, grew from 57TWh in 2000 to 158TWh (CAGR) of 4.7% and is expected to reach 234TWh
in 2019. With the COVID–19 pandemic, the amount by 2030, with an average expected CAGR of 4%
of electricity consumed has fallen as Malaysia between 2020 and 2030. 2
enforced strict nationwide lockdowns beginning
In terms of demand, historically demand has
in March 2020 which covered most of the year.1
grown from 16,822MW to 18,808MW between
2015 to 2020. For the year 2021-2030 and 2030-
2039, peak demand is projected to grow by 0.9%
p.a. and 1.7% p.a. respectively. 3
Figure 2.8: Electricity Consumption in Malaysia (TWh, 2000–2030)
+4%
234
225
217
210
202
195
188
182
176
169
+4.7% 153 150
144 147
142
128 133
123
116
105 107
93 96
85 89
77 81
69 73
61 65
2000 2001 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F
Sources: ST – Statistics (Final electricity generation), GlobalData.

https://meih.st.gov.my/statistics?p_auth=qQIhhiY7&p_p_id=Eng_Statistic_WAR_STOASPublicPortlet&p_p_lifecycle=1&p_p_state=max-
imized&p_p_mode=view&p_p_col_id=column–1&p_p_col_pos=1&p_p_col_count=2&_Eng_Statistic_WAR_STOASPublicPortlet_execu-
tion=e1s1&_Eng_Statistic_WAR_STOASPublicPortlet__eventId=ViewStatistic3&categoryId=4&flowId=7.
1 The Star – Electricity demand dips, renewable energy gains momentum. https://www.thestar.com.my/business/business–news/2020/12/17/electricity–demand–dips–renewable–energy–gains–m.
2
ST – Malaysia Electricity handbook (2018). https://meih.st.gov.my/documents/10620/c7e69704–6f80–40ae–a764–ad0acf4a844d, ST – Malaysia Electricity handbook (2019). https://meih.st.gov.my/
documents/10620/bcce78a2-5d54-49ae-b0dc-549dcacf93ae.
3
ST - Generation development plan (2020).
https://www.st.gov.my/en/contents/files/download/169/Report_on_Peninsular_Malaysia_Generation_Development_Plan_2020_(2021-2039)-FINAL.pdf.
Electricity supply
Malaysia has been increasing its electricity output As of 2018, natural gas and coal accounted for 83%
since 2000 to meet the growing demand. The of electricity supply in Malaysia, closely followed
annual increase during 2000–2018 was 5%, which by large hydro at 15% of electricity energy mix.1
was slightly lower than the growth in electricity Although Malaysia possesses substantial fuel
demand during the same time period. A significant reserves compared to other ASEAN countries,
portion of electricity is supplied through natural energy security stemming from depleting reserves
gas and coal. remains a concern. Coal is predominantly imported
from Indonesia and Australia. To diversify the
energy mix and increase energy security, the
country has to focus on developing its renewable
energy sources.
Figure 2.9: Electricity Generation in Malaysia (TWh)

200
+5%
150
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Natural gas Oil Coal Large hydro Large hydro Large hydro
Source: International Energy Agency (IEA).
Being the sixth most populous country in Southeast electricity generation per capita, Malaysia ranks
Asia, after Indonesia, the Philippines, Vietnam, third in the region after Singapore and Brunei
Thailand and Myanmar, Malaysia ranks fourth with a level of 5.3MWh/capita, which is one of the
after Indonesia, Vietnam and Thailand in terms highest in the region and at par with the levels
of electricity generation in the region. In terms of experienced in the UK.
1
IEA – Energy supply. https://www.iea.org/data–and–statistics?country=MALAYSIA&fuel=Energy%20supply&indicator=ElecGenByFuel.
Figure 2.10: Total Electricity Generation and Electricity Generation Per Capita (2018)
1.0 2.4 2.8 5.0 0.9 0.4 8.9 9.3 4.8
345
285
241 204 168
99
53
22 4
Indonesia Vietnam Thailand Malaysia Philippines Myanmar Brunei Singapore UK*
Total electricity generation (terawatt hour (TWh))

Electricity generation per capita (megawatt hour (MWh) per capita)
Source: International Energy Agency, Worldbank
(*) Data for UK is as of 2019.
Capacity mix Figure 2.11: Installed Capacity by Fuel Type

(MW, 2018)
At the end of 2018, the total installed generation
capacity in Malaysia was 33,991MW, with natural 2.3% 0.2%
1.6% 0.2%
gas, coal and hydropower being the major sources 2.4%
of power generation. The installed capacity
remained similar to the year prior, which was
primarily driven by broader decommissioning of
diesel and biomass plants which was matched by 18.1%
the commissioning of new plants and government
initiatives such as LSS auctions, NEM schemes and
FiT schemes. While renewable energy accounted 33,991MW 43.7%
for 4% of the capacity mix in 2018, it is expected
to increase to 9% in 2020. Mid– and large–scaled
hydropower projects (or hydropower projects with
capacity more than 30MW) are not considered 31.4%
renewable energy projects in Malaysia. Hence,
they are reported separately as large hydropower
projects.
Natural gas Biomass
As of April 2021, Malaysia has signaled a policy
shift from coal, with no new coal plants post 2025 Coal Solar
and no life extensions to be granted to currently Large hydropower Biogass
operating coal plants.1
Diesel Others
Source: ST Energy Commission – National Energy Balance (2018).

https://meih.st.gov.my/documents/10620/f2f4c39b–4748–4c5d–b90a–
fc36ba880264.
1
SEDA Presentation to British High Commission Malaysia - Renewable Energy Landscape in Peninsular Malaysia (March 2021)
Projected capacity mix1

By the end of 2030, 6,077MW of new capacity is To achieve these targets, Peninsular Malaysia will
required to meet the projected demand growth, require an additional 1.2GW of renewable energy
replacing retiring power plants and ensuring system capacity by 2025 and 3.6GW by 2035. Details
reliability, with the reserve margin projected to on the additional installed capacity targets by
reach below 25%. technology beyond 2025 have been yet to be
released.
As of April 2021, SEDA has raised its target for
renewables in line with a decision made during It should be noted that as of April 2021, large hydro
the ASEAN Plan of Action for Energy Cooperation projects have been reclassified as a renewable
(APAEC) in November 2020, to comprise 31% of energy source. As of 2020, large hydro capacity
Malaysia’s (Peninsular Malaysia, Sabah and Sarawak stands at 5,684MW. Classification of large
inclusive) installed capacity mix by 2025 and 40% hydropower as renewable energy has reduced
by 2035. the new renewable energy capacity requirement
from other non-solar sources. Recently awarded
The projected capacity for Peninsular Malaysia’s
capacity of 1GW solar under LSS4 has reduced new
energy mix is presented in figure 2.12 below.
requirements from solar in the 2021 Generation
Renewable energy capacity is projected to increase
Development Plan compared to the 2020
from 17% in 2021 to 26% in 2025 and 32% in 2035,
Generation Development Plan.
in tandem with a fall in the share of thermal (coal
and gas) projects which will be gradually reduced
from 82% in 2021 to 68% by 2035.
Figure 2.12: Projected Capacity Mix for Peninsular Malaysia (Excluding Sabah and Sarawak)*
100% 1.0% 0%
9.0%
20.0% 20.0%
10.0%
80%
6.0% 7.0%
60% 40.0%
38.0% 32.0%
Interconnection
40% Renewable energy

(inclusive of
large hydro)
Hydro
20%
40.0% 36.0% 41.0%
Coal
Gas
0%
2020 2025 2030
Source: International Energy Agency (IEA).
* No specific specific breakdown by technology is available for Malaysia as a whole
1
ST – Report on Peninsular Malaysia generation development plan (2020).
https://www.st.gov.my/en/contents/files/download/169/Report_on_Peninsular_Malaysia_Generation_Development_Plan_2020_(2021-2039)-FINAL.pdf.
Electricity tariffs
Electricity tariffs have largely remained stable reforms, electricity tariff rates will be more cost
and were revised close to three times in the last reflective with any cost savings being passed to end
10 years. 2 It is anticipated that with the MESI 2.0 customers.
Figure 2.13: Electricity Tariff Rates for Various End Users from 2008–2019 (RM/kWh)
32
30
28
26
Co-generators
24
Industrial
(medium voltage)
22 Commercial tariff
vv(medium voltage)
20 Domestic tafiff
(1-200kWh)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: TNB – Tariff rates.

https://www.tnb.com.my/commercial–industrial/pricing–tariffs1.
3. Renewable Energy Market

Characteristics
3.1 Major Government
Policies and Programmes
The Eleventh Malaysia Plan (2015–2020) and Out of these targets, solar PV is expected to
National Renewable Energy Policy and Action Plan comprise the main bulk of the additional 1,178MW
(NREPAP) set a target of 2.08GW and 3.48GW of in installed capacity by 2025. From Figure 3.1,
grid–connected renewable energy by 2020 and solar PV makes up 1,098MW of the 1,178MW in
2030, respectively. additions, with WTE, biogas, biomass and small
As of March 2021, ST has released the 2020 hydro cumulatively accounting for 80MW.
version of the Report on Peninsular Malaysia From 2026 to 2035, the Malaysian Government
Generation Development Plan (2011-2039) which is targeting to install an additional 2.4GW of
has set new renewable targets of 8.5GW by 2025 renewable energy capacity. Details on the
and 11GW by 2035. additional 2.4GW of installed capacity have been
yet to be released.
Figure 3.1: Proposed Additions Under Renewable Energy in Peninsular Malaysia from 2021–2025 (MW)
1,178 0
12
45
1,483 23
1,483
1,483 1,483 1,098
1,483
Operational Committed Large hydro New Total New

requirements renewable
energy capacity
*WTE *Biogas *Biomass *Small hydro Solar
Source: ST – Report on Peninsular Malaysia generation development plan 2021-2039 (2020).

https://www.st.gov.my/en/contents/files/download/169/Report_on_Peninsular_Malaysia_Generation_Development_Plan_2020_
(2021-2039)-FINAL.pdf.
* Non–solar capacity additions of 80MW have been announced. Of the non–solar renewable energy capacity additions, the break–up on re-
newable energy technologies is assumed to be as per the renewable energy capacity mix projected for 2020, considering that the projected 2020
capacity mix will stay constant till 2025.
1
generation development plan 2019, released on February 2020
In pursuit of the target, there are several regulatory policies and mechanisms implemented. The laws,
policies and roadmaps create the regulatory and policy framework for the implementation of several
renewable energy programme as elaborated in subsequent sections.
Figure 3.2: Key Acts and Policies Governing Renewable Energy in Malaysia
Key features
Establishes and implements a special tariff system to catalyse the generation of

Renewable Energy Act
renewable energy and to provide for related matters.
Sets the target of renewable energy contribution in the national power

National Renewable Energy Policy
generation mix and outlines how the growth of the renewable energy will be
And Action Plan (NREPAP)
achieved.
The national energy efficiency action plan presents a strategy for a well–
National Energy Efficiency Action coordinated and cost–effective implementation of energy–efficiency measures
Plan in the industrial, commercial and residential sectors, which will lead to reduced
energy consumption and economic savings for the consumers and the nation.
Aims to utilise environment–friendly and sustainable energy sources to reduce

National Biofuel Policy
dependency on fossil fuels and to help stabilise the palm oil (CPO) industry.
Facilitates the mainstreaming of green technology into the planned

Green Technology Master Plan
developments of Malaysia while encompassing the four pillars set in the National
(2017–2030)
Green Technology Policy (NGTP), i.e., energy, environment, economy and social.
Outlines scenarios Malaysia will face should global temperature rise by 2°C and
the country’s response.
Climate Change Act (drafting stage) 1
The current government administration is undertaking a feasibility study to
ascertain the need for a climate change act.
The roadmap will provide strategies and action plans to achieve the 20%
Renewable Energy Transition aspirational renewable energy target by 2025 and the various renewable energy
Roadmap (RETR) 2035 scenarios in 2035. The roadmap will be incorporated in the Twelfth Malaysia Plan
(2020–2025).
Sources: Compiled from various sources
1
As a result of the political change in Malaysia in March 2020, MESTECC is being broken down into three different ministries, namely Ministry of Energy and Natural Resources, Ministry of Environ-
ment and Ministry of Science and Technology. The Ministry of Energy and Natural Resources would hold the electricity portfolio. However, no further details are available on the role of the other
two ministries in the development of renewable energy in Malaysia. Therefore, the state of the climate change act, which was being drafted by the MESTECC, is uncertain. The current government
administration is undertaking a feasibility study to ascertain the need for a climate change act that was initially planned by MESTECC.
Renewable Energy programme

FiT1
The FiT scheme under the renewable policy be on a competitive pricing basis with the FiT
and action plan promotes renewable energy rates intended to act as a ceiling value. Details
generation up to 30MW in size. The FiT programme of indicative FiT rates and resources allocated
is administered by SEDA. The mechanism allows are covered in the upcoming renewable energy
electricity produced from renewable energy sections.
resources to be sold to power utilities at a fixed
The FiT system in Malaysia is designed with the
premium price for a specific duration to enable
main objective of achieving grid parity as fossil fuel
financial viability of the renewable energy plant’s
subsidies are gradually phased out and/or when the
development.
generation of renewable energy becomes cheaper.
The renewable energy technologies covered Given the recent regime change, we anticipate that
under this scheme are biomass (inclusive of the FiT scheme will continue for renewable energy
Municipal Solid Waste), biogas (inclusive of landfill/ projects that are yet to achieve grid parity and for
sewage), small hydro and solar PV. As per recent other renewable energy technologies, it will serve
announcements, the procurement of capacities as a reference price for the numerous players
in bioenergy and small hydro are expected to interested in entering the space.
1
SEDA. http://www.seda.gov.my/reportal/nem/.
Table 3.1: FiT Rates in Malaysia (in RM sen and US$ cents/kWh)
2018 2019 2020

Technology Type Category RM sen/kWh RM sen/kWh RM sen/kWh
(US$ cents/kWh) (US$ cents/kWh) (US$ cents/kWh)
≤4kW 66.82 (16.6) 60.14 (14.9) 54.13 (13.4)
>4kW and ≤24kW 65.19 (16.2) 58.67 (14.6) 52.80 (13.1)
Community >24kW and ≤72kW 44.35 (11.0) 37.70 (9.4) 32.05 (8.0)
Solar and other
non–individual >72kW and ≤1MW 42.85 (10.6) – –
>1MW and ≤10MW – – –
>10MW and ≤30MW – – –
Installed in buildings or
12.56 (3.12) 11.30 (2.80) 10.17 (2.52)
Bonus for building structures
community
and other For use as building materials 8.48 (2.10) 6.78 (1.68) 5.42 (1.34)
Solar
non–individual
solar Use of local content (modules) 5.00 (1.24) 5.00 (1.24) 5.00 (1.24)
installations
Use of local content (inverters) 5.00 (1.24) 5.00 (1.24) 5.00 (1.24)
≤4kW 66.82 (16.6) 60.14 (14.9) 54.13 (13.4)

Solar Individual
>4kW and ≤12kW 65.19 (16.2) 58.67 (14.6) 52.80 (13.1)
Installed in buildings or
12.56 (3.12) 11.30 (2.80) 10.17 (2.52)
building structures
Bonus for For use as building materials 8.48 (2.10) 6.78 (1.68) 5.42 (1.34)
Solar individual solar
installations Use of local content (modules) 5.00 (1.24) 5.00 (1.24) 5.00 (1.24)
Use of local content

5.00 (1.24) 5.00 (1.24) 5.00 (1.24)
(inverters)
≤4kW 66.82 (16.6) 60.14 (14.9) 54.13 (13.4)
>4kW and ≤24kW 65.19 (16.2) 58.67 (14.6) 52.80 (13.1)

Solar Non–individual
>24kW and ≤72kW 44.35 (11.0) 37.70 (9.4) 32.05 (8.0)
>72kW and ≤1MW 42.85 (10.6) 36.42 (9.0) 30.96 (7.7)
≤2MW 26.0 (6.5) 26.0 (6.5) 26.0 (6.5)

Small
- >2MW and ≤10MW 25.0 (6.2) 25.0 (6.2) 25.0 (6.2)
hydropower
>10MW and ≤30MW 24.0 (6.0) 24.0 (6.0) 24.0 (6.0)
Sources: GlobalData, SEDA.

Table 3.1: FiT Rates in Malaysia (in RM sen and US$ cents/kWh) (continued)
2018 2019 2020

Technology Type Category RM sen/kWh RM sen/kWh RM sen/kWh
(US$ cents/kWh) (US$ cents/kWh) (US$ cents/kWh)
Geothermal - ≤30MW 45.0 (11.2) – 45.0 (11.2)
≤4MW 31.84 (7.9) 31.84 (7.9) 31.84 (7.9)
Biogas - >4MW and ≤10MW 29.85 (7.4) 29.85 (7.4) 29.85 (7.4)
>10MW and ≤30MW 27.86(6.9) 27.86 (6.9) 27.86 (6.9)
Gas engine technology with

1.99 (0.49) 1.99 (0.49) 1.99 (0.49)
electrical efficiency >40%
Bonus for Locally developed gas engine

5.00 (1.24) 5.00 (1.24) 5.00 (1.24)
Biogas biogas technology
installations Landfill, sewage gas or
agricultural waste, including
7.86 (1.95) 0.0000 (0.000) 0.0000 (0.0000)
animal waste used as fuel
source
22.10–28.14 22.10–28.14
Up to and including 5MW –
(5.48–6.98) (5.48–6.98)
agricultural–waste – 1.99 (0.49) 1.99 (0.49)

Landfill or
Biogas agricultural– Use of locally manufactured
waste or assembled gas engine – 5.00 (1.24) 5.00 (1.24)
technology
Use of landfill, sewage gas or

agricultural waste, including – 7.86 (1.95) 7.86 (1.95)
animal waste as fuel source
≤10MW 30.85 (7.66) 30.85 (7.66) 30.85 (7.66)
Biomass – – 28.86 (7.16) 28.86 (7.16) 28.86 (7.16)
>20MW and ≤30MW 26.87 (6.67) 26.87 (6.67) 26.87 (6.67)
Use of gasification technology 1.99 (0.49) 1.99 (0.49) 1.99 (0.49)
Bonus for biomass

Bonus for 1.00 (0.24) 1.00 (0.24) 1.00 (0.24)
installations
Biomass biomass
installations Locally developed boiler or
5.00 (1.24) 5.00 (1.24) 5.00 (1.24)
gasifier
9.82 (2.44) 0.0000 (0.0000) 0.0000 (0.0000)
Sources: GlobalData, SEDA.

Large–scale solar1
Malaysia introduced the LSS competitive bidding The Malaysian government has allocated 500MW
programme to aid the development of solar as the 2019 NEM quota, out of which 450MW is
projects through a price discovery mechanism. for commercial and industrial buildings and the
remaining 50MW is for residential buildings. NEM
The first tender was released in 2016 with a total
thus replaces the FiT scheme that was applicable
aggregate capacity of 200MW in Peninsular
for solar PV earlier. As of January 2020, a quota
Malaysia and 50MW in Sabah, followed by the
balance of 50MWac remains, with 20MWac under
second round in 2017 with an increased total
domestic and 30MWac under commercial. The
aggregate capacity of 360MW in Peninsular
country has over 4.12 million buildings with solar
Malaysia and 100MW in Sabah/Labuan. The third
rooftop installation capability, but this potential is
round for LSS bidding opened up in February
largely untapped in the peninsula. The ministry is
2019 with a target aggregate capacity of 500MW
targeting commercial and industrial buildings to
and expected commissioning in 2021. As of
go solar and adopt the NEM scheme in the coming
January 2020, the Malaysian ST has selected five
years.
successful projects in its 500MW LSS 3 auction,
with 490.88MW awarded for the most competitive Due to the positive response from the PV industry,
tariffs and compliance with the request for the Energy and Natural Resources Minister has
proposals (RFPs). In May 2020, the fourth round of introduced the new NEM 3.0 programme to provide
the LSS 4 was launched with an aggregate capacity more opportunities to electricity consumers to
of 1GW. The programme has attracted strong install solar PV systems. The NEM 3.0 programme
interest with a total of 138 bids as per information will be in effect from 2021 to 2023 and the total
on the EC website. quota for allocation is up to 500MW. The NEM
3.0 programme will be delivered in three new
Each of the successive auctions to date have
initiatives / category: (1) Programme NEM Rakyat;
resulted in progressive tariff reductions toward
(2) Programme NEM GoMEn (Government Ministries
grid parity. The cheapest tariffs in LSS 1 and LSS 4
and Entities); and (3) Programme NOVA (Net Offset
were RM40 sen (US$9.93 cents)/kWh and RM15 sen
Virtual Aggregation).
(US$3.72 cents)/kWh respectively. 2
Self–consumption (SELCO)
A further analysis of the bid rates will be covered in
section 4. As the quota for development under FiT, the
government has started encouraging individual,
Net Energy Metering (NEM) scheme
commercial and industrial consumers to install
The NEM programme for rooftop solar PV was solar PV for their own consumption. 3
introduced in late 20181 to allow energy from solar
There are no limits for the capacity of off–grid
PV systems to be consumed first with any excess
systems while in case of grid–connected system,
delivered to TNB on a one–on–one offset basis.
the limit is set at 75% of the maximum demand of
The programme has received a positive response
the consumers’ existing installations.4
since inception. The scheme applies to all domestic,
commercial, industrial and agricultural sectors as Apart from the above schemes, the government
long as they are TNB customers. has introduced several incentives too to aid the
development of the sector.
1
Backer McKenzie insight – ST of Malaysia Opens Third Round of Competitive Bidding for the Development of Large Scale Solar Photovoltaic Plants in Peninsular Malaysia.
https://www.bakermckenzie.com/en/insight/publications/2019/02/energy–commission–of–Malaysia.
2
Energy Commission - LSS@MEnTARI - Large scale solar photovoltaic plant for commissioning in 2022/2023 - Bids received from Bidders. https://www.st.gov.my/contents/2020/LSS/Bid%20Price%20
Opening%20LSS%40MEnTARI%20v3.pdf.
3
SELCO guidelines.
https://www.st.gov.my/contents/publications/guidelines_electricity/2017/Guidelines%20on%20the%20Connection%20of%20Solar%20Photovoltaic%20Installation%20for%20Self–Consump-
tion–280417.pdf.
4
SEDA briefing on the NEM, SELCO and RPVI directory application in 2019.
P2P trading energy trading

As a part of MESI 2.0 initiatives that focus on competitive to retailer’s tariff. The participating
empowering customers with choices, encouraging consumers will have the choice of purchasing solar
more solar PV adoption and enhancing customer electricity from the P2P or from the retailer. The
experience through digital, SEDA has introduced a grid operator will be compensated with a grid fee,
pilot for P2P electricity trading. while the retailer operating the energy trading
platform will be compensated with a retailer’s fee.
For this pilot run, only solar PV under NEM
The pilot will run for eight months and energy
programme is allowed to participate. The P2P
trading will be conducted over the Power Ledger
energy trading will allow solar PV producers to
(PL) platform. Financial settlements between the
sell excess solar electricity on an energy trading
solar electricity producers and the consumers will
platform to other consumers. The solar energy
be done through TNB’s electricity bills.
producer will sell their solar electricity at a rate
Figure 3.3: Overview of The Peer–To–Peer (P2P) Energy Trading Pilot
Prosumer (NEM user) TNB’s grid
Produces excess electricity from own Use of TNB’s grid

rooftop solar panels
Smart meter Consumer
Record exchange of electricity between prosumer, Purchases excess electricity from prosumer when
consumer and TNB, tracked via blockchain platform. available; rest of the time to purchase from TNB.
Source: SEDA.
http://www.seda.gov.my/2019/10/malaysias–1st–pilot–run–of–peer–to–peer–p2p–energy–trading/.
Renewable energy (RE) incentives Green Technology Financing Scheme 2.0 (GTFS 2.0)
Green Investment Tax Allowance (GITA) GTFS is a special financing scheme introduced by
the government to support the development of
The GITA scheme is an incentive to promote the
green technology in Malaysia which is administered
purchase and use of green technologies. Under the
by the Malaysia Green Technology and Climate
scheme, the rate of incentive is 100% of qualifying
Change Center (MGTCCC).
capital expenditure (QCE) incurred. The capital
expenditure comprises of renewable energy, energy With the launch of GTFS 2.0, the government
efficiency, green building, green data center and extended the total soft loan amount of an
integrated waste management activity. additional RM2 billion (US$496 million) from 2019
until the period of 2020.
Projects which have been approved by SEDA under
the FiT scheme are not eligible for GITA. The scheme, which is expected to be active until
2020, will offer a 2% per annum interest/profit
Green Income Tax Exemption (GITE)
rate subsidy for the first five years. Under GTFS
GITE is available to qualifying companies who 2.0, no government guarantee will be offered (a
provide green technology services and which have departure from the precedent of 60% government
been verified by GreenTech Malaysia. The qualifying guarantee). For a producer of green technology,
companies must also be listed under the MyHIJAU each group of the company is allowed to have up
directory. The rate of incentive is an income tax to RM100 million (US$24.8 million) of financing
exemption of 100% of statutory income from the subsidy.
year of assessment where the date of application
GTFS is subject to a processing fees as follows:
received by MIDA until the year 2020. The list of
qualifying activities include renewable energy, • Application fee: RM8,000 (US$1,985) payable
energy efficiency, green building, green data upon submission of application
center, green township, certification/verification
• Annual fee: 0.25% for tenure less than 10 years
bodies and electric vehicles (EV). A 70% income
or 0.5% tenure more than 10 years
tax exemption of up to 10 years will be given to
companies undertaking solar leasing activities. 2 Only legally registered Malaysian companies that
have at least 51% Malaysian shareholding is eligible
for GTFS 2.0.
RE100 incentives3
In June 2019, the former government
administration announced its intention to roll
out a framework that would allow companies
which have signed up to be a part of RE100 and
commit to use 100% renewable energy to avail
tax incentives under MIDA. The tax incentives and
green investment tax allowance were proposed to
cover 40 activities and assets. However, due to the
recent administration changes, there have been
no further plans released about this initiative. As
RE100 is a global initiative, the new administration
can be expected to continue to pursue initiatives in
this area. This is a space foreign companies hoping
to invest in Malaysia should look out for.
1
MIDA. https://www.mida.gov.my/home/tax–incentives–for–green–industry/posts/.
2
SEDA. http://www.seda.gov.my/reportal/re–incentive/.
3
MIDA. https://www.mida.gov.my/home/8910/news/companies–get–tax–incentives–in–100–re-
newable–energy–initiative/.
FiT bonuses for FiT holders from 2011

For current solar FiT holders who have been in The scheme is applicable for roofed building
operation since 2011, SEDA has recently announced structures such as shelters for people, animals or
updated guidelines for FiT bonuses for using solar stores for objects. The types of bonuses for the FiT
PVs as building materials. The updated scheme will rate offered for solar PV installations are as follows:
be effective from 1 April 2020.1
Table 3.2 Types of Bonuses for Use of Solar PV As Building Material
Types of bonuses
Effective period from FiT bonus
Renewable
the commencement (US$
source
Bonus FiT rates having the following criteria of the FiT date cents/kWh)
(one or more):
Solar PV Use as installation in buildings or building structures 21 years 2.52
Use as building material* 21 years 1.34
Use of locally manufactured or assembled solar PV modules 21 years 1.24
Use of locally manufactured or assembled solar PV inverters 21 years 1.24
Sources: SEDA – FiT rates, SEDA – Guidelines for Eligibility for the Bonus S02 – Use as Building Material for solar PV Applications under the
Feed–in–Tariff (FiT) Mechanism.
*Use as building material relates to utilise solar PV as a principal building material with no secondary building material underneath.
http://www3.seda.gov.my/iframe/.
http://www.seda.gov.my/pdfdownload/guidelines–for–eligibility–for–the–bonus–s02–use–as–building–material–2020–version–6–1–
april–2020/?wpdmdl=6819.
The eligible FiT holders must ensure that the final the FiT holders need to ensure that the solar PV
structure design drawings, rooftop configuration, installations do not experience any water leakages,
detailed engineering design calculations and Single especially when installed as a roof. SEDA has the
Line Drawings (DC/AC, interconnection, etc.) are right to conduct site inspections to check the
in accordance with SEDA’s technical requirements eligibility and the functionality of the installation at
and are updated to the e–FiT Online System any time within the 21–year period.
Project Files. Among the technical requirements,
1
ST – Guidelines for solar photovoltaic installation on net energy metering scheme.
https://www.st.gov.my/ms/contents/files/download/154/Guidelines_For_Solar_Photovoltaic_Installation_on_Net_Energy_Metering_Scheme_July_2019_compressed.pdf.
3.2 Costs and Technical

Considerations
LCOE is often used to determine the overall Research indicates small hydropower has the
competitiveness of different generating largest LCOE range, followed by biomass and
technologies. In Malaysia, conventional energy geothermal. The LCOE for solar PV appears to
sources are still more cost–efficient given partial be reaching grid parity. In the third round of LSS
subsidies on gas prices and low commodity auctions, the tariff reached as low as US$42/MWh,
prices. However, given that Malaysia has been at par with the grid. With technological advances
implementing gas price subsidy rationalisation and greater renewable expertise, other renewables
with the objective to reflect market price in the are expected to achieve grid parity in the near
gas supply.1 it is expected that the economics of term.
renewable energy will be more attractive in the
coming years.
Figure 3.4: Levelised Costs of Electricity (LCOE) Ranges for Various Generation Technologies in Malaysia
US$/MWh
250 244
236
200
166
150 145
95 TNB fossil
100
fuel
73 95 average
87
50 64
57 57
As seen in the LSS round 3
42 29
0
Solar CCGT Coal Biomass Geothermal Hydro small
PV incineration flash
Sources: Proprietary databases, EY research.
The LCOE is equal to the lifecycle cost divided by lifetime energy production. Key inputs to calculating the LCOE include capital costs, fuel costs,
fixed and variable operations and maintenance (O&M) costs, financing costs and an assumed utilisation rate for each plant type.
1
Malaysian Gas Association. https://malaysiangas.com/marketreforms/.
3.3 Project Development

Lifecycle
ST conducts competitive bidding exercises for arrangement in the general form during the RFP
new capacity requirements. The competitive submission. Such procurement policies are likely
bidding process allows any qualified players, new to support the participation of private sector
or established, to put in their bids when ST issues companies, both domestic and international.
a request for proposal (RFP) for any new plant.
The entire process — from the issuance of RFP, LSS projects
shortlisting of bidders, announcement of eventual LSS round 1 (launched in 2016) tendered for
winners and the results — are published in the ST capacity in the range from 1MWac to 50MWac, LSS
website. round 2 (launched in 2017) tendered for capacity in
In an effort to improve transparency, ST the range from 1MWac to 30MWac and LSS round 3
publishes the bidding price of all bidders at the (launched in 2019) tendered for capacity packages
bid opening date, allowing bidders to benchmark in the range of 1MWac to 100MWac. LSS round 4
their submissions against those of other bidders. (launched in May 2020) tendered for three distinct
Another notable feature of the competitive bidding categories: (1) those with capacity between 10MW
process is that all parties have to bid against and 30MW, and (2) those with a higher capacity
standard PPAs as shared in the RFP. All bidders between 30MW and 50MW. 500MW are allocated to
have to adhere to the standard PPA and will have each category. The application process is detailed
to confirm their compliance to the commercial below.
Figure 3.5: Overview of The Large–Scale–Solar (LSS) Procurement Process
1. Pre-qualification 2. RFP 4. Bidding 5. Award
3. Power system 6. PPA signing

study
9. Billing and 8. Testing and 7. Interconnection coordination

invoicing commissioning supervision
Sources: EY research, ST.

Figure 3.6: LSS Application and Procurement Process
1. Pre–qualification (request for qualification (RFQ) and/or request for proposal (RFP))
• To evaluate company’s financial and technical capability.

• RFQ and/or RFP document will be issued by ST.
• ST will invite the shortlisted participants to participate in the RFP stage.
• Bidders will receive the RFP documents, including draft power purchase agreement (PPA), Guidelines for
LSS photovoltaic connection to electricity network and non–disclosure agreements form.
• Potential connections (nodal points) to TNB or SESB network will be provided.
• The LSS developer is fully responsible to:
• Acquire land or submit certified and executed site/lease agreement over land title.
• Obtain right of way (ROW) and permits from relevant local authorities, the required interconnection
facility (IF) and network reinforcement up to the point of common coupling (PCC).
• Design, construct, commission, test and complete LSS plant.
• All costs associated with the connection of LSS and power system studies shall be borne by the LSS
developers.
2. Submission of RFP
• Bidders submit the following, but not limited to, to ST:

• All documents as specified in RFP
• Financial commitment documents
• Certified copy of site agreement for facility and route survey for interconnection ROW
• Approved PSS study by grid owner/distribution licensee
• Consortium arrangement (if any)
• Declaration of energy production:
• Annual energy production
• Maximum annual allowable quantity (MAAQ) for 21 years
• To submit financial model
3. Evaluation of RFP submission
• LCOE
• Compliance with technical standard and regulatory requirements
• Fulfil the technical and financial requirements as per RFP
Source: ST – Guidelines for large scale solar.
http://www.seda.gov.my/reportal/large–scale–solar/.
Figure 3.6: LSS Application and Procurement Process (continued)
4. Acceptance of offer or notice of terms and conditions
• ST issues Letter of Acceptance of Offer or Notice of Terms and Conditions to shortlisted bidders.
5. PPA signing
• Shortlisted bidder will enter into a PPA with TNB or SESB.

• Shortlisted bidder to complete project document as specified in letter of acceptance of offer/notice.
6. Award
• ST issues Letter of Award or Notice of Compliance to successful bidders.
7. PPA effectiveness
8. Financial close
9. Project implementation
10. Commercial operation
Source: ST – Guidelines for large scale solar.

http://www.seda.gov.my/reportal/large–scale–solar/.
The application for rooftop solar projects and self–consumption projects is through the NEM system to
SEDA. The application process is detailed below.
Figure 3.7: NEM Project Development Lifecycle
The study will determine the technical impact to the distribution licensee’s electricity distribution
network and establish technical and safety requirements. The study is a pre–requisite for NEM
application approval.
At this stage the NEM applicant has not yet committed to the physical construction. The findings of
Renewable source
the study will assist the NEM applicant to decide on the feasibility of the project.
For capacity <72kW, there will be no analysis by the distribution licensee. The consumer shall
ensure that the exported power is less than the existing capacity of the distribution licensee and
consumer’s equipment.
An application for NEM shall be on first–come, first–served basis up to the allocated quota.
Application The application shall be submitted to SEDA with the required documents, either online or manually,
as may be determined by SEDA.
The application shall be processed and verified by SEDA within 10 days from the date of complete
Verification and submission.
approval SEDA shall administer the agreed quota for NEM. IA shall deduct annual quota for domestic,
commercial, agriculture and industrial consumer category accordingly.
Upon successful application, a maximum of 12 months is given to the NEM consumer to complete
the proposed works. If the consumer exceeds the maximum period given, SEDA has the right to
revoke the approved quota.
Commissioning The successful NEM consumer shall apply for generating license from the Energy Commission for
and testing installation of more than 24kWp for single–phase system and more than 72kWp for three–phase
system. The NEM consumer shall submit their application to DL to check existing meter.
The successful NEM consumer shall perform system test on his PV system and forward the test
report to SEDA.
The NEM consumer shall sign a NEM contract with distribution licensee upon NEM commencement
Contract signing
date approval by SEDA.
The NEM consumer must meet all environmental regulations set by the Department of Environment
ESG compliance
(DOE).
Source: SEDA – Guidelines for solar photovoltaic installations on NEM system.

http://www.seda.gov.my/reportal/wp–content/uploads/2021/01/NEM3–Guidelines.pdf.
The Small Renewable Energy programme (SREP) municipal waste, solar, small hydro and wind.
was launched in May 2001. The Sarawak Corridor of The power generation capacity of power plants
Renewable Energy (SCORE) was established to lead established under SREP is not limited, although the
the programme. maximum capacity permitted for power feed to the
distribution grid must not exceed 10MW. Renewable
Through SREP, the government aims to encourage
electricity producers receive a power purchase
the proliferation of small renewable plants all over
guarantee from the TNB and a license for a period
the country. The programme focuses on renewable
of 21 years, effective from the date the plant was
energy technologies such as biomass, biogas,
commissioned.
Figure 3.8: SREP Application Process
SREP shall apply to all types of RE, including biomass, biogas, municipal waste, solar, mini–hydro
Application and and wind.
licensing The renewable energy electricity producer shall be given a license for a period of 21 years, to be
effective from the date of commission of the plant.
The application for NEM shall be on first–come, first–served basis up to the allocated quota.
Feasibility The application shall be submitted to SEDA with the required documents, either online or manually,
as may be determined by SEDA.
Renewable energy electricity producers are responsible for all costs of connection, utility system
reinforcement and metering installation. The grid interconnection shall be made at a voltage
Integration
between 11–33 kV. Small renewable energy power plants shall be located within 10 km of the nearest
interconnection point. Exception is given for hydro power generation project.
No stand–by charges shall be levied. However, if back energy is requested by project developers, it
Pricing will be charged accordingly with the prevailing tariff.
Power generation through co–generation technology shall be given special preference.
The maximum capacity of a small renewable energy power plant designed for sale of power to the
grid shall be 10MW. A power plant can be more than 10MW in size, but the maximum capacity has to
Capacity be 10MW.
Small renewable energy power plants must be ready for grid connection within 12 months from the
date of approval.
ESG compliance The renewable energy power plant must meet all environmental regulations set by the DOE and the
developer of the project is responsible for obtaining the necessary approval of DOE and any other
statutory approvals required.
Source: National renewable energy policy.

3.4 Financing
Commercial lending1
The commercial loan market is well–established for • Engineering, procurement & construction (EPC)
Malaysian renewable energy projects, especially agreement with suitable security packages
solar projects developed under the LSS scheme.
Lenders have demonstrated they are comfortable • A PPA, typically with a party that has an
lending in Malaysia’s renewable market. The lenders investment grade credit rating
that have been active in this market are listed in the • Operation & maintenance (O&M) agreement and
table below. Renewable energy projects that senior O&M warranty packages
lenders consider bankable require the completion
• Report from the insurance adviser
of a number of key development milestones to
enable the banks to make an appropriate risk • Due diligence reports from the lender’s
assessment. A high–level summary of these advisers (including required due diligence on
milestones include: environmental issues) and engagement letters
addressed to the lender in satisfactory form
• Access to or ownership of, property site (either
ownership or leasing a site) and any easements The funding for other renewable energy technology
such as biomass and biogas projects is relatively
• Technical feasibility study that detail the energy
harder, requiring higher degrees of diligence,
yield forecast for the period of 21 years on the
review of feedstock supply agreements, recourse
proposed sites
from project sponsors, etc.
Table 3.3: Examples of Commercial Banks Active in Renewable Energy in Malaysia
Category Participant Commentary
Maybank, SME Bank, Most of the local banks are active in providing green financing. Maybank,
Domestic BPMB, AM Bank, RHB SME Bank and BPMP are the country’s most active lenders to renewable
banks Bank, Hong Leong Bank energy projects. However, domestic banks still prefer proven technology
coupled with LSS project for now.
OCBC, UOB, HSBC Singapore and European banks have a strong presence in Malaysia, across
Foreign Amanah, Standard a variety of sectors, particularly in power, utilities and infrastructure.
banks Charted, MUFG Collectively, the foreign banks have financed more than 70 renewable
energy projects that have obtained GTFS certification.
MDV, Green Lagoon, Malaysia Debt Venture (MDV) is one of the most active players that
Newton Eco Technology, provided funding to renewable energy projects, specially solar projects
Non–bank PolySeed from both FiT and LSS.
lenders Equity crowd funding (ECF) platform providers such as Green Lagoon,
Newton Eco Technology and PolySeed have successfully raised about
RM2.2 million (US$0.55 million) to fund two renewable projects.
1
EY research based on previous experience of projects in Malaysia.
Green bond/Sukuk
Another instrument used for financing renewable With the success story of green SRI sukuks,
energy projects in Malaysia are green bond Malaysia has proven that there is depth in the
issuances in the form of green Socially Responsible market to finance renewable energy projects,
Investment (SRI) sukuks. Sukuks, an Islamic especially LSS projects where sukuk underwriters
financial certificate that is shariah–compliant, have were comfortable with sizes as low as RM200
been designed as SRI instruments for renewable million (US$49.62 million).
energy and other environmental sustainability
To encourage the use of green SRI sukuk as a
projects. Green SRI sukuks are issued under the SRI
means to raise funding, a number of grants and
Sukuk Framework.
incentives have been introduced:1
As of November 2019, a total of RM4.4 billion
• RM6 million (US$1.49 million) Green SRI Sukuk
(US$1.09 billion) worth of green SRI sukuks were
Grant Scheme administered by Capital Markets
issued in Malaysia, starting with the world’s first
Malaysia which helps cover 90% of the cost
green sukuk, totaling RM250 million (US$62
associated with the external review with up to
million), being issued by Tadau Energy Sdn. Bhd. in
RM300,000 (US$74,441) per issuance
2017 to finance a solar power plant in Malaysia.1
• Tax exemption for recipients under the Green
Following the success of SRI Sukuk Tadau, Quantum
SRI Sukuk Grant Scheme until the year of
Solar Park Malaysia Sdn. Bhd. launched the world’s
assessment 2020
largest green SRI sukuk of RM1 billion (US$248
million) in October 2017 to fund the construction • Tax deduction on issuance costs of SRI sukuks
of Southeast Asia’s largest solar photovoltaic approved, authorised by or lodged with the
plant project in three districts: Kedah, Malacca and Securities Commission until the assessment
Terengganu. year 2023
Table 3.4: Green SRI Sukuks issued in Malaysia to Finance Renewable Rnergy Projects
Issuer (year) Amount (in million) Standards Use of proceeds
Green bonds RM US$
Tadau Energy Sdn. Bhd. (July 2017) 250 62 SRI Solar
Quantum Solar Park (October 2017) 1,000 248.1 SRI Solar
Sinar Kamiri Sdn. Bhd. (January 2018) 245 60.8 SRI Solar
240 59.6 SRI, ASEAN Green Solar

UiTM Solar Power Sdn (April 2018) Bond Standards
(GBS)
Pasukhas Green Assets Sdn. Bhd. (February 2019) 200 49.6 SRI, ASEAN GBS Hydropower
Telekosang Hydro One Sdn. Bhd. (August 2019) 590 146.4 SRI, ASEAN GBS Hydropower
Cypark Ref Sdn. Bhd. (Oct 2019) 550 136.5 SRI Solar
Total 3,075 763
Note
1
Kasikornbank, 2016; Pande, 2013; Private Equity Wire, 2014; Rappler, 2015; STEAG GmbH, 2016; SCB, 2012; Das, 2011; Bank Mandiri, 2014; Reuters, 2017.
3.5 Key Considerations

for Renewable Energy
Investments in Malaysia
Challenges in accessing financing for non–solar Local ownership
renewable projects1
Until early 2009, the Malaysian government
Despite sufficient liquidity in the domestic market, had policies in place that aimed to achieve
developers may face some challenges in raising 30% Bumiputra participation in all industries.
finance for small–scale renewable energy projects However, in April 2009, the Prime Minister
for sectors other than solar (i.e., biogas, biomass, announced the removal of the 30% Bumiputera
rooftop solar, small hydro) due to several reasons, equity requirement for 27 services sub–sectors.
including: In October 2011, the Prime Minister announced
• The equipment and technology of green further liberalisation of 17 service sub–sectors to
projects is inadequate collateral for banks as allow 100% foreign equity participation. However,
technology and equipment are new and with foreign ownership in power plants are still
unproven lifespan restricted to 49%. 3
• For aggregated rooftop solar project portfolio There are numerous international players in the
with multiple off–takers, the credit profile of renewable energy market. For instance, in the
the off–takers may impact the bankability of solar energy space, recent tenders under the LSS
the project programme have been awarded to consortiums
formed by international solar power project
Currency risk developers such as IbVogt, BayWa Re, Scatec
RM had weakened in the past five years, Solar, Hanwha Energy and Constant Energy and
depreciating by about 3% p.a. against their respective local partners. However, foreign
US$. 2 Renewable energy project revenues in ownership restrictions necessitate the need for a
Malaysia are typically received in RM (e.g., FiT local Malaysian company with an equity interest of
rates are offered in RM), so to ensure investors more than 51% in the bidding consortiums.
do not have large exposure in the currency
exchanges, they need to plan the repatriation of
investments (either through dividend and disposal)
to avoid long–term exposure in the currency
exchange or consider to continuously reinvest the
dividend returns into new renewable projects in
Malaysia.
1
EY research based on previous experience of projects in Malaysia.
2
Estimated based on data from Bank Negra Malaysia. https://www.bnm.gov.my/index.php?ch=statistic&pg=stats_exchangerates&lang=en&StartMth=2&StartYr=2015&EndMth=2&EndYr=2020&-
sess_time=1200&pricetype=Mid&unit=rm.
3
MIDA. https://www.mida.gov.my/home/liberalisation–of–the–services–sector/posts/.
4. Market Conditions for Solar

PV Development
Malaysia has among the highest potential for is lower irradiance during South–West monsoon
solar uptake as it is strategically located near the when the wind direction changes and proceeds
equator. Monthly solar irradiation for Malaysia is from Australia and moves toward Sumatera Island
estimated at 400–600 MJ/m2. It is generally hot before reaching the Straits of Malacca between
and sunny all year round. May and September.
The irradiance is higher during North–East According to an estimate by SEDA, Malaysia has
monsoon with the wind coming from central Asia a potential of up to 269GW of solar PV. Out of the
to South China Sea through Malaysia and finally 269GW, Peninsular Malaysia has a potential of
to Australia between November and March. There 137.5GW, Sarawak 32.1 GW and Sabah 99.4GW.
Figure 4.1: Solar Irradiation Across Malaysia
Source: Global Atlas © 2019 The World Bank, Global Solar Atlas 2.0.
Solar resource data: Solargis.
4.1 Utility–Scale,
Ground–Mounted
Systems
Solar energy is poised to play a key role in helping 10MW and 30MW, and (2) those with a higher
Malaysia achieve its aspirational goal of 20% capacity between 30MW and 50MW. 500MW are
renewable energy by 2025. The sharp decline in the allocated to each category.
price of PV technologies is driving solar PV toward
The auctions are seen as a transparent mechanism
grid parity and is enabling greater adoption by
for awarding LSS projects and it can be expected
power producers.
that to meet the additional 1,098MW target for
ST started the competitive bidding process for solar by 2025, ST will release at least one to two
LSS in 2016. The first tender was released in more rounds of auctions of 500MW-1,000MW.
2016 with a total aggregate capacity of 200MW in
Regulatory treatment
Peninsular Malaysia and 50MW in Sabah, followed
by the second round in 2017 with an increased Solar PV is governed by the Electricity Supply Act
total aggregate capacity of 360MW in Peninsular and regulatory oversight is by ST.
Malaysia and 100MW in Sabah/Labuan. The third Pricing
round for LSS bidding opened up in February 2019
with a target aggregate capacity of 500MW and Utility ground–mounted solar projects (>30MW
expected commissioning in 2021.1 The biggest power) have their tariffs determined through the
possible package that any one company can win LSS auctions. Tracking the bid prices submitted
under LSS 3 was 100MWac.2 to ST over the years, we can see a clear fall in the
average bid rates from RM50 sen (US$12.40 cents)/
For LSS 3, five bidders were named in the shortlist kWh in LSS 1, to RM42 sen (US$10.42 cents)/kWh
on 23 December 2019,3 after 112 bids for contracts in LSS 2, and further down to RM19.8 sen (US$4.91
were opened in August 2019. Formal letters of cents)/kWh and RM22.2 sen (US$5.51 cents)/kWh
award are pending fulfilment of conditions. The for projects with capacity between 10MWac to less
PPAs will start from the date of commercial than 30MWac and 30MWac to 50MWac respectively
operations, for which there is a deadline of 31 in LSS 4. This reflects a compounded annual
December 2021, running for 21 years. The plants growth rate (CAGR) of -15%. 2
will sell the energy to TNB under the PPA.
The fourth round for LSS bidding for 1GW of solar
capacity opened up in May 2020, with expected
commissioning in 2022/2023 and a PPA term of
21 years. The tender aggregrates projects into two
distinct categories: (1) those with capacity between
1
Backer McKenzie – ST of Malaysia Opens Third Round of Competitive Bidding for the Development of Large Scale Solar Photovoltaic Plants in Peninsular Malaysia (Feb 2019). https://www.bakermc-
kenzie.com/en/insight/publications/2019/02/energy–commission–of–Malaysia.
2
ST.
3
IJGlobal – Five projects successful in Malaysia’s third solar auction (Jan 2020). https://ijglobal.com/articles/144813/five–projects–successful–in–malaysias–third–solar–auction.
Figure 4.2: LSS Raw Offer Price vs. Offered Export Capacity
Raw Offer Price (RM / kWh)
0.70
0.65
0.60
0.55
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 110.00
LSS - 4 (30MWac to 50MWac) LSS - 4 (10MWac to less than 30MWac) LSS - 3 LSS - 2 LSS - 1
Source: EY analysis based on ST data.
In the PPA, the LSS developer is entitled to be paid • MAAQ: Annual committed dispatch volumes is
the energy rate up to the LSS power plant’s MAAQ. proposed by bidders in their proposals
Any energy beyond MAAQ, if accepted by TNB or
• Energy rate: Energy up to MAAQ is purchased
SESB, shall be paid at the excess energy rate. The
at the agreed tariff. Any excess energy
energy rate shall include but not be limited to EPC,
accepted by the off–taker is purchased at RM1
land cost, project development cost, financing
sen/kWh
cost, O&M cost and interconnection cost.
• Deemed energy payments: For energy output
PPA terms1
not accepted by off–taker for reasons not
• The LSS process is underpinned by a standard attributable to the generator shall be eligible
PPA which all winning bidders are expected to for deemed energy payments at the agreed
sign. Some of the standard PPA terms include: energy rate in the PPA
• Take and pay: The PPA shall be based on the • Shortfall in energy output: For shortfalls
take–and–pay mechanism of more than 70% in the declared annual
quantity (DAQ), the generator shall be liable
• PPA term: Standardised duration of 21 years
to reimburse the off–taker for the energy
with fixed energy price
shortfall estimated at the displaced cost of
• Single off–taker: TNB is the SB from all projects supplying energy from alternative sources
in Peninsular Malaysia and SESB will be the
off–taker in Sabah
1
ST – Guidelines on large scale solar plant for connection to electricity networks. https://www.st.gov.my/contents/article/dokumen/2016/02–HoT_LSS_–_for_RFP_Session_26_May_2016.pdf. Some
terms referred are in accordance with the definition attributed in the standardised PPA.
Procurement method Financing

ST applies a competitive bidding process. The LSS projects (>30MW) will typically have access
offers by the shortlisted bidders shall be based on to the capital market. Malaysia, being home to
the optimum output, final yield and specific yield the world’s largest sukuk market with four green
of the proposed LSS power plant in accordance sukuks issued for LSS projects. Some of the
with the design and technology used. largest solar plant projects coming online in 2020
include loan–financed projects by MUFG Bank,
Key decision makers
OCBC Malaysia, HSBC and BNP Paribas.
The LSS is implemented by the ST. The main
While loan markets are deep and accessible in
actors involved in the grid–connected solar
Malaysia, we do see recent projects that are
schemes are KETSA1, ST, off–takers (TNB or SESB),
financed completely with equity. For instance,
the distribution licensees, solar PV developers and
at the Kerian Solar Power park, which will have
service providers.
a capacity of 47MW. Redsol, a special purpose
Licensing company formed by Fumase (Malaysia) Sdn. Bhd.
All LSS power plants must be licensed under and Scatec Solar Malaysia B.V. will provide 100%
Section 9 of the Act. For licensing matters, of the project’s equity.
the guidelines on licensing is available on the Foreign ownership restrictions
Commission’s website (https://www.st.gov.my) and
The participant of the LSS programme must be
an application shall be made through the online
a local company of which the Malaysian equity
application portal at (https://oas.st.gov.my).
interest in such a local company is at least 51%.
Land and permitting Or, the participant must be a consortium of
The LSS developer is fully responsible to acquire legal entities which includes a minimum of one
land or submit a certified and executed site/lease local company and which has a Malaysian equity
agreement as reflected in the land title, obtain interest in the consortium of at least 51%. The
Right of Way (ROW) and permits from relevant LSS4 auction allowed only 100% locally owned
local authorities required for the construction of or incorporated companies to participate or
the Facility, SPP IF, SPP Interconnector, TNB IF and companies listed on Bursa Malaysia which has
for network reinforcement up to the PCC. at least 75% local shareholding to participate.
It remains to be seen if subsequent auctions will
The usage of land to be used for the LSS power retain such restrictions.
plant may also be optimised for other economic
activities (e.g., agricultural) and not restricted only Local content requirements
to solar energy generation and may carry certain There are no solar–specific local content
merit points. requirements.
Source: ST – Guidelines on large scale solar plant for connection to electricity networks.
https://www.st.gov.my/contents/article/dokumen/2016/02–HoT_LSS_–_for_RFP_Session_26_May_2016.pdf.
Note
1
Following the change in government in Feb 2020, the former MESTECC’s responsibilities have been divided across three different Ministries. These are the Ministry of Energy and Natural Resourc-
es (KETSA), Ministry of Environment and Water (KASA) and Ministry of Science, Technology and Innovation (MOSTI).
Unit costs and production

Solar modules for utility scale are predominantly In total, about 250 companies are involved in
sourced from China. However, in recent times, upstream solar PV activities such as poly silicon,
Malaysia has been increasing its manufacturing wafer, cell and module production. Companies
capabilities in this space. Several companies have are also involved in downstream activities such as
set up manufacturing plants (silicon cell or CdTe– inverters and system integrators.
thin film) with aggregate production capacity of
more than 9GW 1. Additionally, there are other
smaller silicon module manufacturing companies.
Table 4.1: PV Cell and Module Production and Production Capacity (2019)
Manufacturer Technology Capacity for cell (MW) Capacity for module (MW)
Hanwa Q Cells Mc–Si 2,000 2,000
LONGi (Kuching) Sdn. Bhd. Sc–Si 880 900
LONGi Technology (Kuching) Sdn. Bhd. Sc–Si 1,250 –
Jinko Solar Mc–Si 2,200 1,400
Sun Everywhere Sdn. Bhd. Sc–Si 229.5 318.2
SunPower Malaysia Manufacturing Sdn Bhd Sc–Si 773 –
First Solar CdTe – 3,200
Total 8,582.5 8,898.2
Source: IEA and SEDA – National Survey Report of PV Power Applications in Malaysia (2019).
https://iea–pvps.org/wp–content/uploads/2020/08/NSR_Malaysia_2019.pdf.
The cost efficiencies of ground mounted systems with less than 10MW can explain their prevalence in
current solar farm constructions.
Figure 4.3: Cost Breakdown for a Grid–Connected and Ground–Mounted Centralised PV Systems
US$ cents/watt*
160
145.0
140
120
65.2
100
83.1
80 Module
21.7 33.3
60
Inverter
40 58.0 24.9
24.9 Others (electronics, balance of
20
5-10MW >10MW systems and interconnectors)
Source: IEA & SEDA – National Survey Report of PV application in Malaysia (2018).https://iea–pvps.org/national_survey/national–survey–re-
port–of–pv–power–application–in–malaysia–2018/.
1
European Commission – PV Status Report (2019). https://ec.europa.eu/jrc/sites/jrcsh/files/kjna29938enn_1.pdf.
4.2 Rooftop Solar PV

Rooftop solar is another segment in solar power on the rooftops especially as these packages offer
generation that has been recently introduced in zero capital investments and easy installations for
Malaysia and is experiencing rapid growth and customers.
adoption. Rooftop solar may be connected to the Through the Net Energy Metering (NEM) 3.0 scheme
grid or off–grid for self consumption. that has come into force in February 2021, ST has set
The growth in rooftop solar expansion has been a goal for an additional 500MW of installed capacity
incentivised through the NEM system and solar for rooftop solar by 2023, bringing the total installed
rooftop leasing packages. Leasing packages have capacity to 1,000MW. This quota will be assigned
successfully attracted customers to put solar panels through three different sub–schemes, covered below:
Sub–scheme Applies to Capacity allocated Details
NEM Rakyat Residential 100 MW Net metering tariff over a 10–year period
programme systems
Government 100 MW
NEM GoMEn ministries and
public entities
NEM Nova Commercial 300MW Sell excess power to the grid at market price or system marginal
scheme, or Net and industrial price (SMP). In the Malaysian electricity market, the SMP is given
Offset Virtual PV system by the price of the most expensive marginal generator scheduled
Aggregation owners or dispatched to meet demand in the half–hour period.
Figure 4.4: Grid–Connected Rooftop Capacity from 2012–2023F (MW)

MW
1,200
1,000
1,000
800
600 500
371
400 302
230
198
200
91
10 56
139
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023F
Grid-cnnected rooftop (MW)
Regulatory treatment
A rooftop solar is governed by the energy supply act (A1501) and regulatory oversight is through SEDA.
Source: IEA and SEDA – National Survey Report (2019), PV Magazine – Malaysia to allocate another 500 MW of rooftop PV under net metering
(Feb 2021), ST – Peninsular Malaysia Electricity Supply Industry Outlook (2019).
https://iea–pvps.org/wp–content/uploads/2020/08/NSR_Malaysia_2019.pdf.
https://www.pv–magazine.com/2021/02/01/malaysia–to–allocate–another–500–mw–of–rooftop–pv–under–net–metering/.
https://www.st.gov.my/ms/contents/files/download/106/Peninsular_Malaysia_Electricity_Supply_Industry_Outlook_2019_compressed.pdf.
Pricing1 Key decision makers

Solar rooftop returns are determined by the NEM is executed by the KETSA 2 which is regulated
NEM. The concept of NEM is that the energy by the ST with SEDA Malaysia as the implementing
produced from the installed solar PV system will agency.
be consumed first and any excess will be exported
PPA terms1
to TNB on a one–on–one offset basis. This scheme
applies to all domestic, commercial, industrial and For domestic or residential consumers, the
agricultural sectors as long as they are customers maximum capacity of the PV system will not
of TNB. The one–on–one offset basis means that be more than 12kW for single phase and 72kW
every 1kWh exported to the grid will be offset for three–phase systems. This capacity will be
against 1kWh consumed from the grid, instead of subjected to an annual review depending on the
at the displaced cost previously. demand for residential quota.
For NEM, the credit to the consumer will be based For commercial, industrial and agricultural
on prevailing gazette tariff for the relevant supply consumers, the maximum capacity of the PV
voltage level at the PCC. The net charge amount system installed shall be:
can be derived from the following calculation: net a. For medium and high–voltage consumers
charge amount (RM) = (energy imported from wherein the maximum capacity limit is 75% of
distribution licensee* x gazette tariff) - (energy the maximum demand. This is based on:
exported to distribution licensee x gazette tariff)
ii. The average of the recorded maximum
*Energy imported is subjected to sales and demand of the past one year; or
services tax (SST), Kumpulan Wang Tenaga Boleh
Baharu (renewable energy fund) (KWTBB) and iii. The declared maximum demand for
ICPT where applicable. consumers with less than one year’s record
The net energy shall be allowed to roll over for b. For low–voltage consumers, the maximum
a maximum of 24 months. Any available energy capacity limit is 60% of the fuse rating
after 24 months will be forfeited. (for direct meter) or 60% of the current
transformer rating. The peak or maximum
Procurement method demand is to be supported by an actual 24–
The quota allocation for NEM is 500MW up to hour and four–day load profile consisting of
year 2020. The quota allocation will be divided Friday to Monday. The load profile should
into domestic and non–domestic (i.e., commercial, have a 30–minute reading interval. Installation
industrial and agriculture) categories. above 1MW is subjected to the Distribution
Code requirement.
The NEM category has been divided into four
categories which are residential, commercial, The permissible net export capacity for
industrial and agriculture. The PV systems can connection to the distribution system shall be not
be installed on the rooftop of buildings, garages, less than 1kW rating measured at the connection
car parks and similar buildings. It can also be point, provided that the net export capacity at
installed for ground mounted systems. Installation the connection point shall not exceed 75% of the
of rooftop solar PV is allowed on a case–by–case maximum demand of the metered consumer.
basis as approved by SEDA. To understand the application and procurement
The new NEM scheme is only applicable to process, please refer to section 3.3.
Peninsular Malaysia and applicants must be
registered TNB customers.
ST – Guidelines for solar photovoltaic installation on NEM scheme. http://www.seda.gov.my/reportal/wp–content/uploads/2021/01/NEM3–Guidelines.pdf.

1
2
Please note: Following the change in government in Feb 2020, the former MESTECC’s responsibilities have been divided across three different Ministries. These are the Ministry of Energy and
Natural Resources (KETSA), Ministry of Environment and Water (KASA) and Ministry of Science, Technology and Innovation (MOSTI).
Financing Registered solar PV investor (RPVI)3

Solar rooftops are predominantly self–funded. Any company or individual can register to be a
Moreover, the government has implemented solar PV investor (RVPI) that provides a SPPAs or
a number of initiatives to boost rooftop solar solar leasing services to NEM customers.
adoption.
To be registered as an RPVI, local companies
The solar–leasing programme offers zero capital can apply for solar PV projects of any capacity.
cost requirements to customers planning to Foreign companies on the other hand are eligible if
install a rooftop solar. The packages offer end– they apply for solar PV capacities above 250KW. 3
to–end hassle–free services during the design,
RPVI requirements:
commissioning and operation periods 1. The
installation of rooftop solar can potentially reduce • Both foreign and local companies need to be
the monthly bill by allowing for flexible tariff which incorporated in Malaysia
may be at a discounted rate from the regulated • Minimum paid–up capital is at least RM1 million
tariff or staged tariff escalation. (US$0.25 million) for local companies and RM10
There are also numerous other financing million (US$2.5 million) for foreign companies
structures available besides leasing, such • Local companies can be a Registered PV
as outright purchases, loans from financing Service Provider with SEDA
institutions and solar power purchase agreements
(SPPAs). In 2018, SEDA launched the country’s • Foreign companies will have to have 100%
first–of–its–kind all risks solar PV insurance to local EPC by appointing a registered solar PV
ensure the investors’ assets are well protected 2. service provider with SEDA Malaysia
The payments to RVPI may be through direct
contract or through supplementary agreement
for renewable energy – where the RVPI receives
payments when a PPA or lease is set up through
an electricity bill.
Figure 4.5: Method of Payment for RVPI

Via Direct contract Via SARE
MW
Registered solar PPA = Solar energy (RM/kWh)

PV investor Lease = Fix instalment (RM/month) Engage
Agreement (RPVI) Agreement local EPC
or leasing or leasing for solar PV
*P *PPA/lease
PA installation
/le payment
a
se
Dir pa
SPPA or ec ym SPPA or solar Registered Tenaga Nasional
tp en
solar leasing Engage local ay t leasing solar PV
me *PPA/lease payment
EPC for solar nt investor (RPVI)
PV installation Via electricity bill
NEM
applicant
(site owner) Supplementary
n agreement for
io
lat renewable energy
tal
ns (SARE)
Vi Registered solar
Registered solar larP NEM applicant
PV service
So Tenaga Nasional (site owner)
PV service provider (RPVSP)
provider (RPVSP) Solar PV
installation
Source: ST – Guidelines for solar photovoltaic installation on NEM scheme.

http://www.seda.gov.my/reportal/wp–content/uploads/2021/01/NEM3–Guidelines.pdf
1
MDPI, 2019, The Potential and Status of Renewable Energy Development in Malaysia
2
SEDA website, https://www.seda.gov.my/2018/10/seda–initiates–countrys–first–insurance–protection–scheme–for–home–and–commercial–solar–pv–owners–with–allianz–via–anora–agency–mpia/.
3
SEDA – Registered solar PV investor (RPVI) presentation.
Financing through third–party ownership1

Participation of eligible consumers in NEM with For a NEM scheme with third–party ownership,
financing through a third–party ownership is the investor/asset owner shall be licensed under
allowed subject to mutual agreement between the section 9 of the Electricity Supply Act 1990. The
NEM consumer and investor/asset owner. license application shall be made upon approval
of quota from the implementing agency (IA) and
Types of financing options that may be allowed to
is valid until the end of the contract period. The
fund the NEM installations are as follows:
NEM consumer may apply for a new license upon
• Solar lease termination of the contract period, subject to the
• Solar PPA commission’s approval.
• Hybrid of solar lease/PPA Foreign ownership restrictions
Supplementary Agreement With Renewable Energy Eligible customers are owners or occupiers of a
(SARE) is one of the allowed programmes under premise who is supplied or requires to be supplied
financing through third party ownership for NEM with electricity by the Distribution Licensee. There
which is a tripartite agreement between a NEM are no foreign ownership limits as long as this
consumer, distribution licensee and investor/asset criteria is met.
owner. Local content requirements
Roles of parties in SARE and implementation of There are no local content requirements.
SARE are as follows:
Active solar module manufacturers
• The investor/asset owner conducts energy
Malaysia earned its place as one of the significant
audit, design and propose the optimum solar PV
PV manufacturers in the world since 2007 when
system for installation
the first solar was set up at the cadmium telluride
• The investor/asset owner invests, owns and PV manufacturing plant in Kulim, Kedah. Since
operates the solar system throughout the then, other renowned international PV brands such
contract period as SunPower, Hanwha Q Cells, China’s LONGI, JA
• NEM consumer will own the solar PV system Solar and Jinko Solar have established Malaysia as
after contract period their manufacturing base. Hence, it is not a surprise
when Malaysia emerged an international hub for
• NEM consumer’s solar energy purchase will be the manufacture of solar PV cells, wafers and
billed by the distribution licensee on the same modules.
utility bill and be subjected to the same terms
and conditions
Source: IEA & SEDA – National Survey Report of PV application in Malaysia (2018).
https://iea–pvps.org/national_survey/national–survey–report–of–pv–power–application–in–malaysia–2018/.
1
ST, Guidelines For Solar Photovoltaic Installation on NEM scheme.
https://www.st.gov.my/contents/files/download/154/Guidelines_for_Solar_Photovoltaic_Installation_on_Net_Energy_Metering_Scheme_Amendment_2019_Final–min.pdf.
Self-consumption (SELCO)
Self–consumption (SELCO) has also contributed a device that will prevent the export. The export
to the growing PV capacity. Self–consumption curtailment is to prevent any voltage rise at the
means that the generated power is fully consumed point where an indirect solar PV power generation
within the customer premise. As no export is system is connected to the consumer’s main
allowed, self–consumption consumers shall install supply board.
Figure 4.6: Off–Grid Solar Capacity from 2012–2019 (MW)
371
300
200
100
36
1 1 1 1 1 9
0
2012 2013 2014 2015 2016 2017 2018 2019
Sources: MESI – National Survey Report (2018), ST – Peninsular Malaysia Electricity Supply Industry Outlook (2019).
Regulatory treatment1 Licensing

The self–consumption scheme is governed by the For solar PV system installation above 24kW
Energy Supply Act (Act 447). for single–phase and 72kW for three–phase,
any person who uses, works or operates the
Pricing
installation shall require a license as stipulated
As electricity is generated for self–consumption, under the Guidelines on Licensing under section
there is no tariff or pricing scheme for this nine of the Act.
renewable energy source.
Financing
Procurement method
Personal and corporate loans are used. Initially,
Procurement is done through business–to– government policies like My Suria existed to
consumer frameworks. encourage those below the 40% income group
Key decision makers1 to have 3kWp systems established in homes.
However, due to a low interest, the government
Regulatory oversight is through the SEDA. has rescinded the scheme.
Foreign ownership restrictions
Refer to section 3.5 for details.
Local content requirements
There are no local content requirements.
1
ST – Guidelines For Solar Photovoltaic Installation on NEM scheme.
https://www.st.gov.my/contents/files/download/154/Guidelines_for_Solar_Photovoltaic_Installation_on_Net_Energy_Metering_Scheme_Amendment_2019_Final–min.pdf.
Estimated market size

Assumptions for market size are based on estimat- (BNEF) and triangulated from different sources,
ed capacity additions forecasted in the latest Malay- including IRENA and Tetra Tech. Assumptions for
sian Generation Development Plan between 2021- a foreign and domestic share of the market come
2025. Assumptions for project costs come from from estimated involvement of foreign companies
various sources like Bloomberg New Energy Finance in each component of the supply chain.
Table 4.2: Estimated Market Size – Solar PV (2021–2025)
Technology Additions (2021–2025) Project cost (US$ million/MW) Market size (US$ million)
Solar PV 1,098 1.24 1,362

Table 4.3: Supply Chain and Financing Analysis for Solar PV (%)
Share in cost (%) Domestic (%)* Foreign (%)
Project developer or sponsor 10% 5% 5%
Consulting engineering 5% 2% 3%
Engineering design 5% 2% 3%
Major electromechanical equipment 60% 29% 31%
Balance of systems 15% 7% 8%
Construction 5% 2% 3%
Total 100% 49% 51%
Source: IRENA, EY research.

Note: (*) While there are no local content requirements, we have assumed that 50% project development will require domestic players as this will
help with ease of business, 49–50% domestic involvement of local players in consulting, engineering, major equipment, balance of systems and
construction as these are sectors for solar PV in Malaysia are reasonably developed but require foreign expertise and management. It is expected
that foreign share through international players will continue to dominate the market potential of solar in Malaysia. International players have
greater access to advanced major equipment, balance of systems and project development expertise.
Table 4.4: Supply Chain and Financing Market Value Analysis for Solar PV (US$ million)
Total market size Domestic share Foreign share
Project developer or sponsor 136 68 68
Consulting engineering 68 27 41
Engineering design 68 27 41
Major electromechanical equipment 817 395 422
Balance of systems 204 95 109
Construction 68 27 41
Total 1,362 667 694

Examples of upcoming projects

Table 4.5: Summary of Upcoming Projects in Solar PV
Power plant name Fuel State or Total Owner Status Year

type province capacity online
(MW)
Ladang Tanah Merah Solar PV Negeri 10.5 Selasih Mentari Sdn. Bhd. Permitting
Solar PV Park Sembilan
Machang Solar PV Park Solar PV Kelantan 45 Idiwan Solar Sdn. Bhd. Permitting 2020
Chuping Solar PV Park Solar PV Perlis 48 Beseri Jaya Sdn. Bhd.; Hanwha Under 2020
Energy Corp construction
Solar management Solar PV Negeri 60 Solar management Seremban Financed –

Rembau Solar PV Park Sembilan Sdn. Bhd.
Pasir Mas Floating Solar Solar PV Kelantan 49 Tien Ching Energy Co Ltd; Umile Announced –
PV Park LLP
Bayan Lepas Solar PV Solar PV Penang 0.923 Cleantech Solar Energy (India) Permitting 2020
Park Pvt Ltd
ENGIE TTL Kerian Solar Solar PV Perak 100 Engie Energy Services Permitting 2021
PV Park International; TTL Energy Sdn.
Bhd.
Ib Vogt Coara Marang Solar PV Terengganu 116 Coara Solar Sdn. Bhd.; ib vogt Under 2022
Solar PV Park GmbH construction
Suria Sungai Petani Solar Solar PV Kedah 116 SolarPack Corporacion Permitting 2021
PV Park Tecnologica SL
Cypark Impian Marang Solar PV Terengganu 100 Cypark Resources Berhad Permitting 2021
Solar PV Park
Hanwha Konsortium Solar PV Pahang 100 Hanwha Energy Corporation Permitting 2021
Pekan Solar PV Park Singapore Pte Ltd
Bukit Selambau Solar PV Solar PV Kedah 45 TNB Bukit Selambau Solar Sdn. Under 2020
Park Bhd. construction
Xinyi Glass Jasin Solar PV Solar PV Malacca – – Partially 2020

Park active
Kuala Ketil Solar PV Park Solar PV Kedah 1.3 Cleantech Energy Corp Pte Ltd Permitting 2020
Source: GlobalData.
Table 4.5: Summary of Upcoming Projects in Solar PV (continued)

(MW)
IKEA IPC Shopping Center Solar PV Selangor 0.5 – Permitting –

Solar PV Park
Teo Seng Capital Johor Solar PV Johor 4 – Permitting 2021

Solar PV Farm
Pasir Gudang Solar PV Solar PV Johor 25 UiTM Solar Power Sdn. Bhd. Permitting –
Park
Alor Gajah Solar PV Park Solar PV Malacca 6.8 Ikram Greentech Sdn. Bhd. Permitting 2020
Sungrow Malaysia Solar Solar PV – 150 – Permitting –

PV Park
Ain Medicare Sdn. Bhd. Solar PV Kelantan 2.533 GSPARX Sdn. Bhd. Permitting 2020
Solar PV Park I
Ain Medicare Sdn. Bhd. Solar PV Kedah 0.598 GSPARX Sdn. Bhd. Permitting 2020
Solar PV Park II
TATI University College Solar PV Terengganu 0.999 GSPARX Sdn. Bhd.; TNB Permitting 2020
Solar PV Park
Setul Solar PV Park Solar PV Negeri 90 Vsolar Group Berhad Permitting –

Sembilan
Larut dan Matang Solar Solar PV Perak 9.9 Asia Meranti Sdn. Bhd.; Atlantic Permitting 2020
PV Park Blue Sdn. Bhd.; Ocean Solar
Energy Sdn. Bhd.
Beaufort Solar PV Park–2 Solar PV Sabah 5 Constant Energy; Gaya Belian Permitting 2020
Sdn. Bhd.; Stone EPC Sabah Sdn.
Bhd.
BP Energy–Kunak Solar Solar PV Sabah 5 BP Energy Sdn. Bhd. Permitting 2020

PV Park
Empangan Kelinchi Solar Solar PV Negeri 30 B&Z Mechanical and Electrical Permitting 2020
PV Park Sembilan Sdn. Bhd.; Nippon Bumijaya Sdn.
Bhd.
Beaufort Sabah Solar PV Solar PV Sabah 6 Beau Energy East Sdn. Bhd. Permitting –
Park
Source: GlobalData.

(MW)
Kota Marudu Solar PV Solar PV Sabah 5.9 BT Solar Sdn. Bhd.; Regional Permitting –
Park Utilities Sdn. Bhd.
Tanjung Kubong Solar PV Solar PV Sabah 5 Sabah Energy Corporation Sdn. Permitting –
Park Bhd.
Kota Tinggi Solar PV Park Solar PV Johor 29 – Financed –
Penang Solar PV Park Solar PV Penang 20 Greenviro Solutions Sdn. Bhd.; Permitting –
PLB Terang Sdn. Bhd.
Sungai Kuala Muda Solar Solar PV Kedah 30 Lembaga Tabung Angkatan Permitting –
PV Park Tentera; Scomi Group Bhd;
Synergy Generated Sdn. Bhd.
Kinta Solar PV Park – 1 Solar PV Perak 9.99 Atlantic Blue Sdn. Bhd.; Ocean Permitting 2020
Solar Energy Sdn. Bhd.
Mersing Solar PV Park Solar PV Johor 5 Fairview Equity Project Sdn. Bhd. Permitting 2020
Kuala Muda Solar PV Solar PV Kedah 9.9 Kara Power Engineering Sdn. Permitting 2020
Park 1 Bhd.; Maju Solar Sdn. Bhd.
Kluang Solar PV Park Solar PV Johor 9.99 Fairview Equity Project Sdn. Bhd. Permitting 2020
Manjung Solar PV Park Solar PV Perak 9.99 Coral Power Sdn. Bhd. Permitting 2020
Kota Kinabalu Solar PV Solar PV Sabah 2.6 Natural Majestic Sdn. Bhd.; Permitting 2020
Park Nusantara Megamas Sdn. Bhd.
Papar Solar PV Park Solar PV Sabah 2.3 Amled Illumination M Sdn. Bhd.; Permitting 2020
GV Bumisinar Sdn. Bhd.
Labuan Solar PV Park 2 Solar PV Labuan 10 Sabah Development Energy Sdn. Permitting 2020
Bhd.; Symbior Solar Siam
PLB Penang Solar PV Solar PV Penang 20 PLB Green Solar Sdn. Bhd. Permitting –
Park
Sultan Ibrahim Solar PV Solar PV Johor 450 - Permitting 2023

Park
Source: GlobalData.
5. Market Conditions for

Hydropower Development
Malaysia has 189 rivers with the total length As well as contributing to the energy mix,
approximately of 57,300km1. Due to this unique hydropower is playing a role in boosting regional
geographical advantage, it has an abundance of ASEAN energy security. Electricity exports to the
natural hydro resource potential. Indonesian province of West Kalimantan are already
under way and further plans are to export to both
According to an estimate by SEDA, Malaysia has
Brunei and Sabah by 2025. The government also
a potential for 13.4GW of large hydro (Peninsular
targets to support the purchasing of up to 100MW
Malaysia - 3.1GW, Sarawak – 10GW and Sabah – 0.3
of hydroelectricity from Laos via Thailand.
GW) and 2.5GW of small hydro (Peninsular Malaysia
- 1.7GW, Sarawak - 0.2GW and Sabah - 0.6GW).2
Hydroelectricity accounts for 15%3 of Malaysia’s 5.1 Large Hydropower
total electric capacity and 11%2 of electricity As of April 2021, large hydro projects of 30MW
generation. Of the 11%3, large conventional and above have been reclassified to count toward
hydropower accounts for 10%2 of the generation, Malaysia’s renewable energy targets6. Moreover,
while small hydro projects account for 1%. Most large scale hydropower is considered to be a
of the hydroelectric facilities are small or medium nationally critical asset for which the Malaysian
sized and are located in Peninsular Malaysia. government will not permit foreign ownership.
However, the Sarawak state has the most potential
for hydroelectric growth considering its rainfall and Regulatory treatment
geography. Large hydropower is governed by the Electricity
As part of the government’s SCORE programme , 4 Supply Act 1990.
which is designed to use Sarawak’s vast energy Pricing
resources to serve the power needs of several
proposed energy–intensive manufacturing projects, Large–scale hydro rates are determined by how the
the state intends to increase generation capacity ring–fenced SB procure electricity from IPPs and
from domestic hydroelectricity and other renewable TNB generation to meet demand at a minimal cost.
sources through 2030. In 2014, hydroelectricity Hydropower providers are paid via two
represented about 60% of Sarawak’s power components stipulated under the PPA, i.e., the
generation and is anticipated to expand to 80% by fixed payment and the variable payment:
2020, replacing some of the state’s dependence
on natural gas–fired power generation. SCORE is • The fixed payment, contractually known as
looking to capitalise on the 51 potential hydropower capacity payment (RM/kW/Month), enables the
sites that the government has identified which IPPs to service the loans and pay for the cost
could provide an estimated 20GW of capacity. of project development and other fixed costs
The SCORE master plan has planned to make an to run and maintain the plant. An allowable
investment of RM334 billion (US$83 billion) by level of returns to shareholders is also included
2030 and is currently managed by the Regional in this component
Corridor Development Authority (RECODA). • The variable payment, known as Energy
In recent years, the 2,700MW Bakun plant Payment, covers the costs incurred to generate
developed by Sarawak Hidro was opened in the electricity. This is based on demand as well
2011 and is Malaysia’s largest hydropower plant. as consumable expenses estimated over the
The 944MW Murum Dam became operational running hours. Variable payment is paid based
in September 2016. Sarawak Energy plans to on the actual energy units that are dispatched
construct the 1,285MW Baleh Dam by 2025.
1
Economic and environmental impact of Hydropower in Malaysia in April 2017 5
GlobalData, power data base
2
PDP 2018 and International Energy Agency and energy supply 6
ST – Report on Peninsular Malaysia generation development plan (2020). https://www.st.gov.
3
SEDA Presentation to British High Commission Malaysia - Renewable Energy Landscape in my/en/contents/files/download/169/Report_on_Peninsular_Malaysia_Generation_Develop-
Peninsular Malaysia (March 2021) ment_Plan_2020_(2021-2039)-FINAL.pdf.
4
GlobalData, Hydropower report 2019
PPA terms Financing

The PPA should contain all the necessary Financing for large hydropower is done through
information such as technical parameters and Sukuk Musyarakah programmes.
commercial arrangements required for the
Sukuk Musyarakah are participatory types of
development, procurement, financing, resource
investment sukuk that are based on profit–sharing
supply, operations and maintenance of plants
terms to mobilise funds. This can help establish
developed by the IPP. It also allocates all the risks
new and large–scale projects, develop existing
associated with the project and is a document
ones or help in financing business activities on
which is required by lending institutions to support
the basis of equity partnerships. The certificate
the financing of the project. The PPA lasts up to
holders become the owners of the project or
32 years.
the assets of the activity as per their respective
Procurement method shares as they are all considered to be the
investors.
The SB shall prepare a hydro plant management
plan once every 12 months to forecast hydro The Musyarakah Venture (partnership
generation for storage–based schemes based on arrangement) shall be entered into between
hydro generation capacity, lake levels and other the investors (Musyarakah Partners) and
relevant assumptions. The SB shall update the the Malaysian government. The Musyarakah
hydro plant management plan as required and Partners will finance the Musyarakah venture
shall update the ST with the most recent plan. or construction of the project whereby all the
partners shall contribute capital and the profits
Key decision makers
shall be distributed based on an agreed profit–
Regulatory oversight is by the ST. For Sarawak. sharing ratios. The Malaysian gets involved by
The SEB also provides oversight. providing project finance from its budget.
Land and permitting Foreign ownership restrictions
In Malaysia, the procedure is different depending Refer to section 3.5.
on whether the project is classified as a
‘prescribed’ or ‘non–prescribed’ activity. If the
project falls under the category of ‘non–prescribed There are no local content requirements.
projects’, the developer is required to consult
Major development or equipment providers
with the DOE regarding the site. A site suitability
assessment is carried out and the license will be Some of the major development or equipment
issued subject to suitability. If deemed unsuitable, providers are Sinohydro Corp. Ltd., GE Renewable
alternate locations would need to be identified. Energy, IMPSA SA, MWH Global, China Gezhouba
For prescribed projects, a suitability study is Group Co. Ltd., Fichtner GmbH & Co. KG, SMEC
followed by an Environmental Impact Assessment (Malaysia) Sdn. Bhd.
(either preliminary or detailed) by DOE registered
individuals, based on the decision of the authority1.
1
DOE
5.2 Small Hydropower

Small–scale hydropower projects are classified as There are certain limitations to small hydro
run–of–river schemes by the Malaysian regulations. technology. The hydro potential is often located
These are up to 30MW in installed capacity and far off from where the demand is concentrated. To
contribute to the country’s electricity supply, enhance the supply according to demand, funds
especially in rural areas. Their development has need to be spent toward connecting small hydro to
been incentivised by the FiT scheme. the grid system.
Table 5.1: Small Hydropower Plants (<30MW)
Power plant name State or Total Owner Status Year

Province capacity online
(MW)
Sg Kenerong Small Kelantan 20 – Operational 2000
Hydro Power
Station
Upper Liang Hydro Pahang 10 Amcorp Power Sdn. Bhd.; TNB Operational –
Power Project
Lower Liang Hydro Pahang 10 Amcorp Power Sdn. Bhd.; TNB Operational –
Power Project
Perting Pahang 6 Amcorp Perting Hydro Sdn. Bhd. Operational 2009
Perting Pahang – Operational 2009
Perting Pahang – Operational 2015
Habu Pahang 5.5 Tenaga Nasional Bhd Operational 1964
Pangapuyan SHPP Sabah 4.83 Esajadi Power Sdn. Bhd. Operational 2010
Odak Pahang 4.2 Tenaga Nasional Bhd Operational 1967
Sungai Rek Kelantan 3.2 – Operational 2012
Kadamaian SHPP Sabah 2 Esajadi Power Sdn. Bhd. Operational 2009
Carabau Sabah 2 – Operational –
Sungai Kerling Selangor 2 Renewable Power Sdn. Bhd. Operational 2009
Naradau Sabah 1.76 – Operational –
Sempam G2 Pahang 1.25 – Operational 1900
Bombalai Sabah 1.1 – Operational –
Merotai Sabah 1.1 SESB Operational 1992
Kalamuku Sarawak 1.07 SEB Operational 1984
Sayap Sabah 1 SESB Operational 1991
Melangkap Sabah 1 SESB Operational 1990
Tuaran Sabah 5 BP Energy Sdn. Bhd.; Warisan Harta Sabah Sdn. Bhd. Announced –
Kota Belud Sabah 3.5 BP Energy Sdn. Bhd.; Warisan Harta Sabah Sdn. Bhd. Announced –
Source: GlobalData.
Regulatory treatment Land and permitting

Small hydropower is governed by the Renewable While applying for FiTs, the applicants are required
Energy Act 2011 (Act 725). to provide documents proving the ownership
of the site or other provisional documents (e.g.,
Pricing
lease, leasing agreements, state approval letters1)
As small hydro procurement is now through indicating the ability to use the site for the duration
competitive bidding, it is no longer entitled to FiT of the PPA at a minimum. In addition, applicants are
rates. FiT rates that are published by SEDA act as also required to submit a copy of the Water Rights
a ceiling as opposed to the actual rate that will be Agreement or approval letter from the government
offered to small hydro producers. entity that will grant rights to the applicant to use
Rates for small hydro power plants will be at or below1: the water for renewable energy generation.
Financing
Capacity (MW) US$ cents/kWh RM sen/kWh
There are three general sources of capital available
≤2MW 6.45 26.0 for a small hydropower project – equity, debt and
grant financing.
>2MW and ≤10MW 6.20 25.0 Small hydropower projects are generally financed
with 30–40%2 equity while the rest of the project
>10MW and ≤30MW 5.95 24.0
is financed with corporate loans. While there is
significant potential to tap into small hydropower
PPA terms with many companies being awarded licenses,
companies are unable to kickstart their work
PPAs are structured by SEDA where the renewable because they do not have access to the funds
energy PPA for small hydropower has a net export needed.
capacity of up to and including 30MW. The recent
competitive bidding, only limits up to 30MW of Financing is a challenge because banks do not yet
maximum capacity per application per site with understand how to price the risks and rewards of
a total quota of 116MW. The duration of small investment.
hydropower PPAs is 21 years. Another hurdle is bureaucracy; where different
Procurement method states have different laws, which means that some
issues that may be sorted out in a few months could
SEDA has introduced competitive bidding for take up to two years depending on states. While the
small hydropower and biopower technologies. The current landscape is dominated by local players for
inaugural e–bidding for small hydropower systems small–capacity projects. However, to take on bigger
was introduced in 2019. A quota of 160MW has been capacity projects, local players will need to tie–up
allocated under this. As of January 2020, The e– with international players.
bidding has resulted in award of 176.69MW of small
hydro instead due to price efficiency of some of the Key decision makers
high–head technologies submitted. Each application SEDA provides regulatory oversight and oversees
will be capped at 30MW per location and the competitive bidding for small hydro.
projects should achieve commercial operations by
the second half of 20241. Local content requirements
Source: SEDA – Guideline for Testing and Commissioning of Small Hydro Power Plant for Feed–in–Tariff (FiT) Projects in Malaysia,
http://www.seda.gov.my/pdfdownload/guideline–for–the–tc–of–small–hydro/?wpdmdl=2267.
1
SEDA – E–Bidding exercise for small hydro quota under FiT (Feb 2020). http://www.seda.gov.my/download/presentation–materials/.
2
GlobalData

Assumptions for market size are based on sources like Bloomberg New Energy Finance (BNEF)
estimated capacity additions forecasted in the and triangulated from different sources, including
latest Malaysian Generation Development Plan IRENA and Tetra Tech. Assumptions for a foreign
between 2021-2025, adjusted proportionally and domestic share of the market come from
to estimate the share of hydropower capacity. estimated involvement of foreign companies in each
Assumptions for project costs come from various component of the supply chain.
Table 5.2: Estimated Market Size – Small Hydropower (2021–2025)
Small hydropower 23 2.15 49

Table 5.3: Supply Chain and Financing Analysis for Small Hydropower (%)
Civil works 60% 33% 27%
Powerhouse equipment 20% 2% 18%
Transmission lines 4% 4% 0%
Construction 10% 10% 0%
Total 100% 52% 48%
Sources: IRENA, EY research.

Note: (*) While there are no local content requirements, we have assumed that 50% of project development will require domestic players as
this will help with ease of business, 50% of consulting engineering will require domestic player expertise, 50% of civil works for small hydro can
be sourced from local companies, 80% of powerhouse equipment will need to be sourced from foreign companies as small hydro is relatively
nascent in Malaysia, while transmission and construction can be completely done by local players. There is opportunity for international players to
contribute skills and know–how, including access to advanced major equipment, consulting engineering and project development expertise.
Table 5.4: Supply Chain and Financing Market Value Analysis for Small Hydropower (US$ million)
Project developer or sponsor 1 0.5 0.5
Civil works 29 16 13
Powerhouse equipment 10 1 9
Transmission lines 2 2 –
Construction 5 5 –
Total 49 25.5 23.5
Table 5.5: Summary of Upcoming Projects in Small Hydro (<30MW)

(MW)
Sungai Geruntum SHP Small Perak 2 Conso Hydro RE Sdn. Bhd.; Permitting –
hydro Perak Hydro Renewable Energy
Corporation Sdn. Bhd.
Sungai Tersat Small Terengganu 4 Metrosphere Sdn. Bhd.; TNB Permitting –

hydro Energy Services Sdn. Bhd.
Pulau Tengah project Small Perak 10 Gunung Hydropower Sdn. Bhd. Permitting –
hydro
Pulau Temelong Small Perak 10 Gunung Hydropower Sdn. Bhd. Permitting –

hydro
Kota 2 Small Sarawak 10.5 SEB Under –

hydro construction
Temenggor Small Perak 14 Maju Hydro Renewable Energy Permitting –

hydro Sdn. Bhd.; Perak Hydro Renewable
Energy Corporation Sdn. Bhd.;
Serba Dinamik Group Bhd
Telekosang Hydro 2 Small Sabah 16 Inno Hydropower Sdn. Bhd.; Permitting 2021
hydro Senja Optima Sdn. Bhd.
Talang Small Perak 25.5 Maju Hydro Renewable Energy Permitting –

Singgor Small Perak 27 Maju Hydro Renewable Energy Permitting –

Source: GlobalData.
Table 5.6: Summary of Upcoming Projects in Large Hydro (>30MW)
Power plant name Fuel type State or Total capacity Owner Status Year
province (MW) online
Sungai Pelus Large hydro Perak 34 Tenaga Nasional Bhd Announced –
Ulu Ai Large hydro Sarawak 54 Tenaga Nasional Bhd Announced –
Tekai Large hydro Pahang 168 Tenaga Nasional Bhd Permitting 2021
Upper Padas Large hydro Sabah 192 SESB Permitting 2024
Lebir Large hydro Kelantan 274 Tenaga Nasional Bhd Announced 2022
Trusan Large hydro Sarawak 275 SEB Permitting –
Nenggiri Large hydro Kelantan 300 Tenaga Nasional Bhd Permitting –
Baleh Large hydro Sarawak 1285 SEB Under construction 2026
Source: GlobalData.
6. Market Conditions for Bioenergy

Power Development
As a tropical country, Malaysia benefits from an
abundance of bioenergy resources. Particularly, the 6.1 Biomass
palm oil sector has large potential to contribute to As Malaysia is the second largest producer
the bioenergy resources available. Approximately of products derived from palm oil, biomass is
5.751 million hectares – an area almost as large as abundantly available. Moreover, biomass can easily
Croatia1 is being used for palm tree plantations, be stored and used for power production when
resulting in Malaysia ranking second globally for needed. Malaysia produces approximately 168
palm oil production. Apart from residues generated million tons of biomass3 each year from palm oil
in the palm oil industry, plenty of bioenergy can be waste, rice husks, coconut waste, sugar cane waste,
sourced from the production of sugar cane, rice, municipal waste and forestry waste. There are over
maize, kenaf and coconuts as well as municipal 465 palm oil mills of which approximately 76 are
waste and manure from the animal breeding major palm oil mills with fresh fruit bunches (FFB)
industry. processing capacity of more than 250,000 tons per
However, some challenges still hinder growth. year. 4 The total installed capacity of biomass plants
For instance, most biomass renewable energy as of 2018 is 748MW.
developers do not own the feedstock nor are Regulatory treatment
they plantation or mill owners. Hence, they are
susceptible to supplies being withheld by feedstock Biomass is governed by the Electricity Supply Act
owners or a rise in prices. Also, long–term feedstock 1990.
contracts are a must for plants to be viable. Pricing
However, most feedstock owners will not sign a
Biomass procurement is on a first–come, first–
contract for more than one or two years. This is
served basis as per the listed FiT below5:
restricting the growth of bioenergy installations in
the country.
Capacity (MW) US$ RM
Moreover, the location of the bioenergy plants plays cents/kWh sen/kWh
a significant role in determining its profitability and ≤10MW 7.66 30.85
returns. Ideally, biomass plants should be located as
close as possible to feedstock such as sugar cane, >10MW and ≤20MW 7.16 28.86
palm oil plants and interconnection points to reduce
transportation costs for feedstock and capital >20MW and ≤30MW 667 26.87
expenditure of connecting to transmission lines.
Sizing of the plant should be based on the estimate Bonus for use of gasification 0.49 1.99
annual feedstock productions by combusting technology
palm kernel shell (PKS), mesocarp fiber (MF) and
Bonus for use of steam–based 0.24 1.00
generating methane gas from palm oil mills effluent electricity generating systems
(POME). with overall efficiency >20%
According to an estimate by SEDA, Malaysia can Bonus for Locally developed 1.24 5.00
potentially support up to 3.6GW of bioenergy. boiler or gasifier
Peninsular Malaysia has a potential of 2.2GW,
Sarawak 0.6GW and Sabah 0.8GW. 2 Sources: GlobalData, IJGlobal, USDA - Malaysia biopower analysis
(2019), SEDA - Guidelines for AT&PA Biomass (2018), SEDA - Guide-
Sources: IJGlobal, EY research. lines for Biomass & Biogas acceptance tests (2018), EY research.
https://apps.fas.usda.gov/newgainapi/api/report/downloadreport-
byfilename?filename=Biofuels%20Annual_Kuala%20Lumpur_Malay-
sia_12–19–2018.pdf.
http://www.seda.gov.my/pdfdownload/biomass–atpa–guideline_up-
dated–june–2018/.
http://www.seda.gov.my/pdfdownload/biomass–atpa–guideline_up-
dated–june–2018/.
1
GlobalData, USDA – Malaysia biopower analysis (2019)
https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Biofuels%20Annual_Kuala%20Lumpur_Malaysia_12–19–2018.pdf
2
SEDA Presentation to British High Commission Malaysia - Renewable Energy Landscape in Peninsular Malaysia (March 2021)
3
Science Direct - Biomass and bioenergy: An overview of the development potential in Turkey and Malaysia
4
“Transitioning to a sustainable development framework for bioenergy in Malaysia: policy suggestions to catalyse the utilisation of palm oil mill residues”, Salleh, S.F., Mohd Roslan, M.E., Abd
Rahman, A. et al., Energ Sustain Soc, 01 November 2020, https://doi.org/10.1186/s13705-020-00269-y.
5
GlobalData - Malaysia Renewable Energy Market analysis
PPA terms Financing

Malaysia has two types of PPAs for biomass – Most biomass power plants are small in size
small (<10MW) and medium (>10MW and including (i.e., less than 15MW) and tend to be funded with
30MW). The PPA is for 16 years. equity.
Procurement methods As locating near a feedstock supply (local oil
plantation) significantly improves the economics
SEDA has announced that they will release 20MW
and returns for a biomass power plant, a key
capacity for biomass with expected commercial
market entry strategy would be to setup joint
operations till 2023. Based on past trends and
ventures and partnership with local plantation
renewable energy target additions, it is expected
and other agricultural parties.
that additional bids of close to 244MW will be
released in the next two–three years. Foreign ownership
Key decision makers Refer to section 3.5.
It is the legal responsibility of SEDA Malaysia to Local content requirements
ensure that all approved biomass installations are
SEDA offers additional FiT bonuses for certain
designed and constructed in accordance to the
locally sourced equipment as shown in the FiT
international standards and best practices, while
table.
meeting minimum national safety standards for
the protection of personnel and equipment. Major development and equipment service
providers
Land and permitting
Some of the development and equipment service
While applying for FiTs, the applicants are
providers are Biogen Inc, Babcock & Wilcox
required to provide documents proving the
Volund AS, SMEC (Malaysia) Sdn. Bhd.
ownership of the site or other provisional
documents (e.g., lease, leasing agreements or
state approval letters1) indicating that ability
to use the site for the duration of the PPA at a
minimum.
In addition, fuel supply agreements or term
sheets confirm the supply of biomass to the
project are also expected to be submitted.
Sources: GlobalData, IJGlobal, USDA – Malaysia biopower analysis (2019), SEDA - Guidelines for AT&PA Biomass (2018), SEDA - Guidelines for
Biomass & Biogas acceptance tests (2018), EY research.
https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Biofuels%20Annual_Kuala%20Lumpur_
Malaysia_12–19–2018.pdf.
http://www.seda.gov.my/pdfdownload/biomass–atpa–guideline_updated–june–2018/.
http://www.seda.gov.my/pdfdownload/biomass–atpa–guideline_updated–june–2018/.
1
SEDA. (2020, February 12). E–Bidding exercise for biogas under FiT. SEDA. Retrieved from http://www.seda.gov.my/download/presentation–materials/.
Table 6.1: Biomass Power Plants in Malaysia
Power plant name State or province Total capacity (MW) Status Year online
Tawau Biomass Power Plant Sabah 14 Operational 2005
Teluk Intan Biomass Power Plant Perak 12.5 Operational 2014
Kwantas Biomass Power Plant Sabah 9.8 Operational 2002
Sahabat Biomass Power Plant Sabah 7.5 Operational 2004
Dengkil Biomass Power Plant Selangor 7 Operational 2016
Kuang Biomass Plant Selangor 2 Operational 2015
Bentong Biomass Energy Plant Pahang 1.2 Operational 2007
Langkawi Biomass Power plant Kedah 1 Operational –
Bandar Seri Jempol Biomass Power Negeri Sembilan 1 Operational 2011

Plant
Johor Bahru Biomass Plant Johor 1.2 Operational 2007
Cheekah–Kemayan Palm Oil Mill Pahang 1 Operational 2015

Plant
Batu Pahat Biomass Project Johor 11 Permitting –
Raub Biomass Project Pahang 3.9 Permitting –
Source: GlobalData.

between 2021-2025, adjusted proportionally and domestic share of the market come from
to estimate the share of biomass capacity. estimated involvement of foreign companies in each
Table 6.2: Estimated Market Size – Biomass (2021–2025)
Biomass 45 2.86 129

Table 6.3: Supply Chain and Financing Analysis for Biomass (%)
Total 100% 50% 50%
Total 100% 52% 48%

Note: (*) While there are no local content requirements, we have assumed that 50% project development will require domestic players as this will
help with ease of business,50% of consulting engineering will require domestic player expertise, 50% of civil works for biomass can be sourced from
local companies, 50% of powerhouse equipment can also be sourced from local players as biomass is a relatively established sector, although foreign
companies have the scope to step in and provide specialist expertise and advance technology, transmission line connection can be 67% covered by
domestic players. It is expected that the foreign share through international players will continue to dominate the market potential of biomass in
Malaysia. International players have greater access to advanced powerhouse equipment, consulting engineering and project development expertise.
Table 6.4: Supply Chain and Financing Market Value Analysis for Biomass (US$ million)
Civil works 22 11 11
Transmission lines 4 3 1
Total 129 65 64
Total 916 476 440

Examples of current and upcoming projects

Table 6.5: Summary of Upcoming Projects in Biomass

(MW)
Kuantan Biopower Project II Biomass Pahang 2.4 Concord Green Energy Sdn. Bhd. Permitting –
Raub Biomass Project Biomass Pahang 3.942 Raub Energy Ventures (Re) Sdn. Bhd. Permitting –
Naka Biopower Project Biomass Kedah 9.95 Majunaka Eco Energy Sdn. Bhd. Under 2020
construction
Batu Pahat Biomass Project Biomass Johor 11 BELL Eco Power Sdn. Bhd. Permitting –
6.2 Biogas
The government has decided to accelerate the Pricing
development of the biogas sector. A concrete
As biogas procurement is now through
example for its ambitions is the target to
competitive bidding, it is no longer entitled to
equip all palm oil mills with a biogas plant
FiT rates. FiT rates published by SEDA, act as a
under the National Biogas Implementation
ceiling as opposed to the actual rate that will be
(EPP5) programme. With this measure, the
offered to biogas producers.
contamination of the environment by the disposal
of sewage generated in the palm oil production Rates for biogas power plants will be at or below2:
is expected to decrease. Additionally, all owners
of palm oil mills aiming to enlarge their business Capacity (MW) US$ RM
by adding new mills are obligated to install a cents/kWh sen/kWh
biogas plant. So far only 35%1 of palm oil mills
≤4MW 7.9 31.84
are equipped with such a plant. Moreover, the
generation of biogas can benefit the palm oil >4MW and ≤10MW 7.4 29.85
producer as it might facilitate receiving the
>10MW and ≤20MW 6.9 27.86
certification for sustainably produced palm
oil. For instance, in Europe the possession of Bonus for use of gas engine 0.49 1.99
this certificate has been introduced in 2009 technology with electrical
as a requirement in order to be eligible for efficiency > 40%
government subsidies for plant–based oils utilised Bonus for locally developed gas 1.24 5.00
in energy generation.1 engine technology
While biogas potential is largely untapped, there
is a big potential to use this resource and extend PPA terms
the life cycle of WTE plants. Steps to foster the Malaysia has two types of PPAs for biogas, small
development of the biomass and biogas sector (<10MW) and medium (>10MW, including 30MW).
was initially through the FiT scheme and has now However, the recent competitive bidding only limits
transitioned to competitive bidding. up to 10MW of maximum capacity per the application
Regulatory treatment per site with a total quota of 30MW. The PPA is for 21
years.
Biogas is governed by the Electricity Supply Act
1990. Procurement methods
SEDA has introduced competitive bidding for
biopower technologies. On January 2020, SEDA has
released the first e–bid for biogas at 30MW, where
biogas power plants will be expected to commence
commercial operations by 2023. Based on past
trends and renewable energy target additions, it is
anticipated that additional bids of close to 319MW
will be released in the next two–three years.
Sources: GlobalData, IJGlobal, IRENA – Renewable energy statistics (2020), USDA – Malaysia biopower analysis (2019), EY research.
https://www.irena.org/publications/2020/Jul/Renewable–energy–statistics–2020.
https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Biofuels%20Annual_Kuala%20Lumpur_Malay-
sia_12–19–2018.pdf.
1
Rodl & Partner – The generation of biogas in Malaysia – chance or risk? https://www.roedl.com/insights/renewable–energy/2019–08/generation–of–biogas–in–malaysia–chance–or–risk.
2
GlobalData - Malaysia Renewable Energy Market (2019).
Key decision makers Foreign ownership

It is the legal responsibility of SEDA Malaysia to Refer to section 3.5
ensure that all approved biogas installations are
designed and constructed in accordance to the
international standards and best practices, while SEDA offers additional FiT bonuses for certain locally
meeting minimum national safety standards for the used equipment. Refer to the FiT table included in
protection of personnel and equipment. the pricing section.
Land and permitting Major development and equipment service
providers
While applying for FiTs, the applicants are required
to provide documents proving the ownership of Some of the development and equipment service
the site or other provisional documents (e.g., lease, providers are KRU Energy Asia Pte Ltd., Garisan
leasing agreements and state approval letters) 1 Etika (M) Sdn. Bhd. and Green & Smart Holdings
indicating the ability to use the site for the duration (UK).
of the PPA at a minimum. Estimated market size
In addition, for biogas plants, applicants are also Assumptions for market size are based on estimated
required to submit a copy of fuel supply agreements capacity additions forecasted in the latest Malaysian
or term sheets from the entities that will be Generation Development Plan between 2021-2025,
providing fuel (agricultural waste or animal waste). adjusted proportionally to estimate the share of
For plants utilising landfill or sewage gas as a source biogas capacity. Assumptions for project costs
of fuel, the applicant is required to submit either come from various sources like Bloomberg New
evidence of the applicant’s ownership of a landfill Energy Finance (BNEF) and triangulated from
or sewage system or a certified copy of a letter or different sources, including IRENA and Tetra Tech.
agreement from the relevant municipal council or Assumptions for a foreign and domestic share of the
any other entity agreeing to supply the applicant market come from estimated involvement of foreign
with the relevant fuel source. companies in each component of the supply chain.
Financing
Financing is often through equity where multiple
parties come together to form joint ventures. In
some instances, MDV has provided financing for
the plants. MDV was established by the Malaysian
government in 2002 with the objective of providing
flexible and innovative loans and Islamic financing
to help develop high–impact and technology–driven
sectors of the economy that have been prioritised by
the government.
Sources: GlobalData, IJGlobal, IRENA – Renewable energy statistics (2020), USDA – Malaysia biopower analysis (2019), EY research.
sia_12–19–2018.pdf.
1
SEDA. (2020, February 12). E–Bidding exercise for biogas under FiT. SEDA. Retrieved from http://www.seda.gov.my/download/presentation–materials/.
Table 6.6: Estimated Market Size – Biogas (2021–2025)
Biogas 12 3.11 37
Table 6.7: Supply Chain and Financing Analysis for Biogas (%)
Total 100% 54% 46%
Total 100% 52% 48%
Source: IRENA, EY research

Note: (*) While there are no local content requirements, we have assumed that 50% of project development will require domestic players as this
will help with ease of business, 50% of consulting engineering and civil works can be done by domestic players, 50% of powerhouse equipment
can also be sourced from local players although foreign companies have the scope to step in and provide specialist expertise and advance
technology, transmission line connection can be predominantly 90% be done by domestic players. It is expected that foreign share through
international players will continue to dominate the market potential of biogas in Malaysia. International players have greater access to advanced
powerhouse equipment, consulting engineering and project development expertise.
Table 6.8: Supply Chain and Financing Market Value Analysis for Biogas (US$ million)
Civil works 12 6 6
Transmission lines 3 3 0
Total 37 20 17
Examples of current and upcoming projects
Table 6.9: Summary of Upcoming Projects in Biogas

(MW)
Labis Biopower Project II Biogas Johor 1 Megagreen Energy Sdn. Bhd. Under –
construction
Maran Biopower Project Biogas Pahang 1 Megagreen Energy Sdn. Bhd. Under –
construction
Bota Biopower Project Biogas Perak 1 Megagreen Energy Sdn. Bhd. Under –
construction
Port Dickson Biopower Biogas Negeri 1 Cypark Smart Technology Sdn. Permitting –
Project II Sembilan Bhd.
Ulu Bernam Biopower Project Biogas Perak 1 United Plantations Berhad Permitting –
Rantau Biopower Project II Biogas Negeri 1.56 Gan Teng Siew Realty Sdn. Bhd. Permitting –
Sembilan
Kinabatangan Biogas Power Biogas Sabah 2 Our Energy Group (M) Sdn. Bhd. Permitting –
Plant
Rompin Biogas Project Biogas Pahang 2.4 Felda Palm Industries Sdn. Bhd. Permitting –
Sungai Kachur Biogas Power Biogas Johor 2.4 Green Biogas Sdn. Bhd. Permitting –
Plant
Kota Tinggi Biogas Project III Biogas Johor 2.4 Concord Green Energy Sdn. Bhd. Permitting –
Dengkil Biogas Power Plant Biogas Selangor 2.5 Biogas Sulpom Sdn. Bhd. Permitting –
Minyak Biogas Power Plant Biogas Perak 2.7 Green & Smart Holdings plc Under –
construction
Ledang Biogas Power Plant Biogas Johor 2.9 Green & Smart Sdn. Bhd. Financed –
Johor Biogas Power Project Biogas Johor 3 Sungei Kahang Power Sdn. Bhd. Permitting –
Tawau Biopower Project III Biogas Sabah 3.8 Cahaya Bumijasa Sdn. Bhd. Permitting –
Simpang Pulai Biogas Power Biogas Perak 10 Rangkaian Iltizam Sdn. Bhd.; Vsolar Permitting –
Plant Group Berhad
6.3 Waste–To–Energy (WTE)

In 2005, the waste generated in Malaysia was Regulatory treatment
19,000t tons per day at a recycling rate of 5%.
WTE is governed by the Electricity Supply Act 1990.
Waste may be of two types – scheduled waste
and municipal solid waste. Despite the increased Pricing
recycling rate of 17.5%, the quantity of municipal
FiT rates published by SEDA are as below3:
solid waste rose to 38,000 tons per day thirteen
years later in 2018. With limited space for landfills
Capacity (MW) US$ RM
and rising costs of disposal, there is increased cents/kWh sen/kWh
pressure and an urgent need to tackle the waste
management issue and reduce the impact on ≤10MW 7.66 30.85
the environment and general well–being of the
>10MW and ≤20MW 7.16 28.86
population.
>20MW and ≤30MW 6.67 26.87
Every year, close to 10.4 million tones of waste make
its way to landfills across the country. Selangor alone In addition to the FiT and WTE, plants are also
contributes 7,000 tones daily2 to these saturated entitled to gate fees that are based on the weight of
disposal areas which are quickly piling up as sources waste generated during the WTE process.
of land and air pollution.
PPA terms
A key factor to be considered in the set up of a WTE
plant is the location. The further the location is from WTE PPAs are structured as per renewable energy
the nearest connection point to export generated standard PPAs. The PPA duration is for 16 years. The
power, the more the project’s viability is reduced, concession for WTE terms will extend up to 25 years
unless the biogas and power generated are used for of operation period.
self–consumption. Procurement methods
Malaysia has taken a step–wise approach to privatise The SEDA has announced that it has released 20MW
and centralise its solid waste management. The capacity for biomass, with expected commercial
standard hierarchy of waste management involves operations till 2023. For biogas, SEDA has introduced
five crucial steps; reuse, reduce, recycle, treatment competitive bidding for biogas technologies. On
and disposal. Currently, the most predominantly January 2020, SEDA has released the first e–bid
employed step in Malaysia is disposal. The Malaysian for biogas at 30MW, with expected commercial
government continues to promote an effective way operations till 2023.4
of waste management by encouraging the reuse
and reduce method and ultimately reducing landfill
wastes. Careful planning alongside efficient resource
allocation and management are vital in achieving a
sustainable solid waste management system.
Sources: GlobalData, IJGlobal, IRENA – Renewable energy statistics (2020), Netherlands Enterprise Agency – Sector scan of the fundamentals
for developing the WTE market in Thailand and Malaysia (2019), USDA – Malaysia biopower analysis (2019), EY research.
https://www.nederlandwereldwijd.nl/binaries/nederlandwereldwijd/documenten/publicaties/2019/08/27/sector–scan–waste–sector–thai-
land–and–malaysia/Sector–scan–fundamentals–for–developing–WTE–market–Thailand–Malaysia.pdf.
sia_12–19–2018.pdf.
1
ST – Green Technology Master Plan. https://www.mestecc.gov.my/web/wp–content/uploads/2019/04/9.–Green–Technology–Master–Plan–Malaysia–2017–2030–English.pdf.
2
The Star – Malaysian project to produce green energy from waste will power 25,000 homes. https://www.thestar.com.my/lifestyle/living/2018/12/21/waste–green–energy–worldwide–holdings.
3
GlobalData – Malaysia Renewable Energy Report (2019).
4
Netherlands Enterprise Agency, Sector scan of the fundamentals for developing the WTE market in Thailand and Malaysia (2019).
Key decision makers Financing

The Ministry of Housing and Local Government The current WTE power plants have been funded
(MHLG) develops, operationalises and enforces laws with equity and loans based on the balance sheets of
and regulations for WTE.1 the parent companies.
SEDA will be the approval authority for the FiT. Foreign ownership
Land and permitting Refer to section 3.4.
Although there are not many precedents in the Local content requirements
sector, current understanding is that projects are
developed through a bidding process where the
government identifies opportunities and invites
interested developers to develop the project.2
Table 6.10: Current WTE Plants in Malaysia
WTE plant Capacity (MW) Completed year Deal status Organisations involved
Kajang WTE plant 8 2009 Operational –
Kedah solid orient palm oil mill WTE plant 3 – Operational Future NRG Sdn. Bhd.
Tanah Merah WTE plant 20 2019 Operational –
Sources: GlobalData, Malaysia Kini News (2019), EY research.https://www.malaysiakini.com/news/468287.

between 2021-2025, adjusted proportionally to and domestic share of the market come from
estimate the share of waste to energy capacity. estimated involvement of foreign companies in each
Table 6.11: Estimated Market Size – WTE (2021–2025)
WTE 1 2.86 3
1
SEDA – E–Bidding exercise for biogas under FiT. (Feb 2020). http://www.seda.gov.my/download/presentation–materials/.
2
MESTECC – Green Technology Master Plan. https://www.mestecc.gov.my/web/wp–content/uploads/2019/04/9.–Green–Technology–Master–Plan–Malaysia–2017–2030–English.pdf.
Table 6.12: Supply Chain and Financing Analysis for WTE (%)
Control systems 15% 8% 8%
Total 100% 52% 49%
Total 100% 52% 48%

Sources: GlobalData, IJGlobal.
Note: (*) While there are no local content requirements, we have assumed that 50% of project development will require domestic players as this
will help with ease of business, 50% of consulting engineering will require domestic player expertise, 50% of control system works can be sourced
from local companies, 50% of powerhouse equipment can also be sourced from local players although foreign companies have the scope to step
in and provide specialist expertise and advance technology as this area is still quite nascent in Malaysia, transmission line connection can be
predominantly 80% done by domestic players. It is expected that foreign share through international players will continue to dominate the market
potential of WTE in Malaysia as this space is still quite nascent. International players have greater access to advanced WTE equipment, consulting
engineering and project development expertise. .
Table 6.13: Supply Chain and Financing Market Value Analysis for WTE (US$ million)
Project developer or sponsor - - -
Consulting engineering - - -
Civil works - - -
Powerhouse equipment 3 1.5 1.5
Transmission lines - - -
Total 3 1.5 1.5

Table 6.14: Summary of Upcoming Projects in WTE
Power plant name Fuel State or Total capacity Owner Status Year
type province (MW) online
Kinta Biopower Project WTE Perak 2.05 Selekta Spektra Sdn. Bhd. Permitting –
SMART WTE Project WTE Negeri 20 Cypark Smart Technology Under –

Sembilan Sdn. Bhd. construction
Jeram Waste to Energy WTE Selangor 20 – Permitting 2020

Facility Phase I
Sources: GlobalData, IJGlobal.

6.4 Biofuels
The Malaysian government released the national In late 2015, to further promote domestic
biofuel policy in 2006 with an objective to use consumption of biodiesel in the transportation
a greater share of environmentally–friendly and sector, the Malaysian government planned to
sustainable energy sources, reduce dependency on increase the blend rate in stages to twenty percent
fossil fuels and stabilise the palm oil industry. by 2020. Due to objections from the transportation
In 2007, the Malaysian Parliament passed the biofuel industry related to the high cost of retrofitting
industry act which included provisions from the vehicles to accommodate a blend rate higher than
national biofuel policy. This helped implement a seven percent, progress on this plan has been slow.
biodiesel blend mandate. Although the initial plan For example, the B10 roll–out originally scheduled for
was to initiate a five percent (B5) blend by 2008, full 2016, was not achieved until February 2019.
national implementation covering both Peninsular While the vast majority of domestically produced
and East Malaysia was not achieved until 2014. biodiesel is used by the transportation industry, the
Market analysts report that with growing palm oil Malaysian government is also aiming to utilise it
stocks and declining palm oil prices, the government in the industrial sector (mainly to heat boilers and
decided to increase the mandated palm oil blend rate generate electricity). The planned roll–out of a seven
for the transportation sector from five percent to percent blend mandate in the industrial sector, which
seven percent in 2015 (the B7 goal was met in 2016). was originally scheduled for early 2019 is pending.
Table 6.15: Summary of Upcoming Biofuel Blend Roll Outs
Blend Planned roll–out to Actual roll–out to Planned roll–out to Actual roll–out to

transportation transportation industrial sector industrial sector
B5 2008 2014 (Nationwide) None None
B7 2015 2015 2019 Pending
B10 2016 2019 NA NA
B20 2020 Pending NA NA
Sources: GlobalData, IJGlobal. USDA – Malaysia biopower analysis (2019), EY research.

sia_12–19–2018.pdf.
Table 6.16: Current Biofuel Plants in Malaysia
Name Location
1 Bremfield Sdn. Bhd. Pulau Indah, Selangor
2 Carotino Sdn. Bhd. Pasir Gudang, Johor
3 FGV Biotechnologies Sdn. Bhd. Kuala Lumpur
4 Fima Biodiesel Sdn. Bhd. Port Klang, Selangor
5 Future Prelude Sdn. Bhd. Port Klang, Selangor
6 Genting Bio–Diesel Sdn. Bhd. Kuala Lumpur
7 Green Edible Oil Sdn. Bhd. Sandakan, Sabah
8 Gulf Lubes Malaysia Sdn. Bhd. Pulau Indah, Selangor
9 KLK Bioenergy Sdn. Bhd. Shah Alam, Selangor
10 Nexsol (Malaysia) Sdn. Bhd. Pasir Gudang, Johor
11 PGEO Bioproducts Sdn. Bhd. Pasir Gudang, Johor
12 Sime Darby Oils Biodiesel Sdn. Bhd. Carey Island, Selangor
13 SOP Green Energy Sdn. Bhd. Miri, Sarawak
14 SPC Biodiesel Sdn. Bhd. Kuala Lumpur
15 Vance Bioenergy Sdn. Bhd. Pasir Gudang, Johor
Sources: GlobalData, IJGlobal. USDA – Malaysia biopower analysis (2019), EY research.

sia_12–19–2018.pdf.
There are currently 15 biofuel processing plants Production for calendar year 2019 was projected
in Malaysia that have an annual capacity of 2.3 at 1.69 billion liters. This higher level of production,
billion liters. A large part of the capacity remains compared to the previous year, is based on the
underutilised as of today. As a result, the Malaysian Malaysian government’s introduction of the 10%
government has issued fewer permits for new blend mandate (B10) during the year and growing
processing plants in the past year and expansion in biodiesel demand in foreign markets.
the next few years will be limited.
Source: GlobalData
7. Market Conditions for Electrical

Networks and Storage
7.1 Smart Grid Systems
TNB is enhancing digital and technological diesel generators have been the primary source
advancements to maximise the efficiency and of energy to support their basic electricity needs
reliability of the country’s national power grid. such as lighting, food refrigeration and other
TNB has secured RM18.8 billion (US$4.65 billion)1 essential electrical appliances. However, the
capital allocation to invest in its T&D grid until 2020. challenges of transporting diesel fuels to these
Of this amount, RM2.7 billion (US$670 million)1 will remote areas increases the cost of energy, which
be invested into Grid of the Future technologies that further jeopardises the quality of life for the people
help improve the grid’s reliability and efficiency. in Sarawak. These rural communities are generally
The investment will include Advanced Metering low–income smallholder farmers that rely heavily on
Infrastructure (AMI) and grid automation which are exporting agricultural produce to earn a living.
expected to contribute to further advancements in Rural development initiatives and efforts have
network reliability and efficiency. been put in place over the past decades, such as
TNB’s grid strategy is directed by aspirations to grow expanding the main utility grid and deploying self–
the national grid to become one of the smartest, sufficient renewable–based energy systems (also
automated and digitally–enabled grids. This will help known as microgrids) to remote rural communities in
ensure maximum efficiency and reliability of the grid the pursuit of equitable development.
and transform customer experience and offerings Microgrid application in remote regions of Sarawak
through embedding innovations into the grid. and Sabah could have a big impact on the quality of
A total of 9.1 million households across Peninsular life. Studies have shown that microgrid operations
Malaysia are expected to be equipped with a TNB can be optimised and cost–effective by considering
smart electric meter by 2026. A smart meter or AMI the dynamics of renewable energy generation
is an electronic device that records consumption of (supply) and consumption (end–use electricity
electricity and communicates the information to TNB demand). With the emerging technology in sensors,
for monitoring and billing. internet–of–things (IoT) and affordable computing
hardware, real–time supply–demand data can be
As per announcements from ST, a total of 300,000 measured and processed through a smart algorithm
smart meters have already been installed in Malacca such as artificial intelligence (AI) and machine
between 2016 and 2018 under phase one of the learning. This will help to optimally manage and
regulatory period 2 (RP2) and it was planned to deploy control the switching between different generation
electronic smart meters to additional 1.2 million devices at different supply–demand conditions.
customers in Klang Valley between 2019 and 2020.2
Isolated grid control system
Advanced microgrids
Under the Eleventh Malaysia Plan (2016–2020), the
In Sarawak, nearly 10%3 of the population Rural Electricity Supply Programme will continue to
(approximately 40,000 households) are still focus on off–grid generation for remote and isolated
not connected to the utility grid. The power areas.
infrastructure is still underdeveloped and lacking
basic infrastructure such as affordable electricity The government will also establish partnerships
supply, clean water supply, access roads and with non–governmental organisations to develop
communication infrastructure. renewable energy sources for the rural community.
Micro– and pico–grids will support the alternative
Generally, these rural villages are sparsely distributed system of solar hybrid and mini hydro to increase
across the inland of Borneo island, where utility coverage. The local community will be trained
grid extension is often not viable due to financial and encouraged to collaborate in maintaining
and technical challenges. Conventional petrol or these facilities to ensure sustainability of the rural
alternative electrification system.
1
Smart Energy – Smart energy grid analysis. https://www.smart–energy.com/industry–sectors/smart–grid/tnb–smarter–grid–malaysia/.
2
Straits Times – PUB to start installation of 300,000 smart water meters at 7 locations in 2021. https://www.straitstimes.com/singapore/environment/pub–to–start–installation–of–300000–smart–
water–meters–at–7–locations–in–2021.
3
Borneo Post – Smart microgrid for sustainable rural development. https://www.theborneopost.com/2019/02/13/smart–microgrid–for–sustainable–rural–development/.
MESTECC – Green Technology Master Plan. https://policy.asiapacificenergy.org/sites/default/files/Green%20Technology%20Master%20Plan%202017–2030.pdf.
Table 7.1: Current Microgrids in Place in Malaysia
Vendor Deal value Completed Deal status

(US$ million) year
Sonnen GmbH; Natural Solar Pty Ltd 69.00 2017 Completed
Trive Property Group Berhad 1.00 2019 Completed
Mitsubishi Corp; The AES Corp – 2016 Completed
E–Getx Limited; PM Group Co., Ltd. – 2019 Completed
Conergy Asia – 2018 Completed
KEPCO Plant Service & Engineering Co Ltd; Protean Wave Energy Inc. – 2017 Completed
Electrify Asia Pte Ltd; Narada Power Source Co Ltd – 2018 Completed
Sunway PFM Sdn. Bhd.; Comtec Solar International (M) Sdn. Bhd. – 2017 Completed
Schneider Electric SE; NGK Insulators Ltd – 2017 Completed
Powin Energy Corporation; GCL System Integration Technology Co Ltd – 2019 Completed
UTS Holdings Sdn. Bhd. – 2014 Completed
Thermal Energy International Inc; Kemco Systems, Inc. – 2009 Completed
OSRAM Opto Semiconductors GmbH; Cambridge Display Technology, Inc. – 2001 Completed
Camco South East Asia Ltd 6.00 – Announced
Borid Energy Holdings Pte Ltd. (Inactive) 1.00 – Announced
ABB Ltd; BYD Co Ltd – – Announced
AES Energy Storage LLC; Mitsubishi Corp – – Announced
Wartsila Corp; Greensmith Energy Management Systems LLC – – Announced
Source: GlobalData.
7.2 Battery Energy Storage

Systems (BESS)
BESS, virtual power plants (VPPs) and microgrids In Malaysia, BESS for BTM and VPP projects have
are part of another area that can contribute to the been initiated as research projects. However, for
development of renewable energy in Malaysia. utility–scale batteries, there has not been any
Malaysia’s governments recognises BESS as capable research or deployment yet. The main challenge in
of supplying services across many applications in the implementing such projects is the high capital cost.
power system. These include frequency regulation, BNEF has projected that a significant drop in capital
voltage support, spinning reserve and black start costs for BESS estimated at 5% decrease yearly,
for GSO for grid flexibility and reliability. For utility could make these technologies more attractive
services, BESS is capable of providing transmission financially.
congestion relief and as an alternative for T&D
deferral. For behind the meter (BTM) services,
BESS can be used for back–up power, peak demand
reduction, energy arbitrage and increased solar PV
self–consumption.
Figure 7.1: Capital Costs for 20MW/80MWh Fully Installed BESS
570
350
330
300
290
265
240
220
210
200 190 175 170 160
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Battery rack EPC Balance of systems Energy mgt. sys.
PCS Developermargin Developer overheads
Sources: Proprietary databases. EY research.

8 Top Business Opportunity Areas

for UK Companies
This section identifies areas where the UK’s
capabilities match the needs of the Malaysian 8.1 Business Opportunities
market. The largest market segments identified
are also the segments where there is existing
for UK Companies
presence of foreign companies. Hence, UK In UK Department for International Trade (DIT)’s
companies would also need to consider innovative assessment2, the strongest capability for UK
ideas to be competitive in the local market. companies is in services (such as consulting,
design, engineering, etc.) for the development of
Companies in the UK can invest in Malaysia renewable energy projects. In terms of sectors,
in several ways, including establishing a solar, wind and bioenergy are the sectors with
new enterprise, acquiring or investing in extensive UK expertise. The subsequent sections
an existing enterprise, setting up a local describe UK’s capabilities across the key sectors
branch or representative office, licensing or identified in Malaysia.
franchising models or through direct contractual
arrangements. Further, UK companies will need to
consider several factors such as nature, quantum
and time horizon of the proposed investment,
prevalence of any foreign ownership restrictions
in the relevant sector, potential value addition of
a local Malaysian partner and tax implications.
The renewable energy market is dominated by
domestic players who have been able to leverage
their knowledge of institutional framework
and local networks to win in market. Business
Monitor International (BMI) indicates domestic
contractors account for around 60% of all
construction roles while the remaining portion is
occupied by foreign contractors (mainly China,
Japan and Korea). The ratio is expected to be
similar in the renewable energy space as well. In
contrast, foreign participation is seen in ancillary
roles such as project management consultancy
(PMC), design and equipment providers; thus,
indicating a gap in local expertise in such fields
with Malaysian companies accounting for only
around 37% of roles awarded 1 . Further, Malaysia
has 49% foreign ownership restrictions for
investment in renewable energy projects. Hence,
it will be essential for UK companies to form
relationships with local companies to jointly
participate in renewable energy projects.
1 BMI
2
UK DIT Capability Statement: Renewable Energy (2020). https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/755218/Renewables_Toolkit_Web_Accessible.pdf.
Table 8.1: Summary of Business Opportunities for UK Companies
Sectors UK expertise5 Estimated opportunities (US$ million)

Detailed Construction,
Pre- Estimated Foreign potential
design and installation and O&M4 UK potential
development1 market potential share
development2 commissioning3
Solar 1,362 694 272
Wind *** *** ***
Small hydro 49 24 8
Bioenergy6 169 81 12–32
Geothermal *** *** ***
Electrical networks
*** *** ***
including storage
Competitive or Capable but not world-leading Little to no

world-leading or the most competitive capability
Source: EY analysis, UK DIT capability statement – Renewable Energy
1
Predevelopment includes all pre–development activities of the project such as strategy, policy development, resource assessments, site surveys, site selection, licensing and consents, grid
connection assessments, preliminary environmental impact assessment, other professional services, etc.
2
Detailed design and development includes activities related to specific project such as front end engineering design (FEED) studies, procurement plan, site specific studies like seabed
studies and wind speed studies. It also includes ancillary project development activities such as financing.
3
Construction, installation and commissioning includes activities related to the actual engineering and build of the project until full commercial operations are achieved.
4
O&M includes routine or periodic maintenance, project inspections and reviews. Professional services during O&M period can include activities such as insurance, audit, tax, independent
engineer on projects and so on.
5
Note: Colors indicate the strength of UK expertise: green = competitive/world–leading; amber = capable but not world–leading or the most competitive; red = little to no capability. Further,
UK expertise in green financing spans both sector and stages and are hence not separately identified.
6
Includes biomass, biogas and WTE.
*** In certain sectors, the market in Malaysia is not explored or possess limited potential. Consequently a project pipeline is unavailable.
The above analysis is based on the review of the potential and foreign potential is as determined
information provided by the FCDO. We understand in previous chapters. Potential UK share of the
that in 2020, DIT carried out an extensive opportunity is then determined as per potential
assessment of UK’s renewable energy capabilities export share identified by FCDO in detail. The
across different sectors and identified areas of subsequent sections explore the sectors in greater
significant export potential. The estimated market detail.
The most attractive segments for value addition Given the overall maturity of solar PV, particularly
in Malaysia in the short term appear to be in the manufacturing capabilities of other countries,
professional services sector (across all renewable opportunities for UK export are limited in large
energy subsectors) and green financing. Given the scale PV projects (>50MW), unless mandated by
prominence of the biomass or biogas sector, UK export finance requirements (20% in UK Export
companies can meaningfully contribute in further Finance (UKEF)). Considering the overall estimated
development of the sector across the entire value market potential for the sector in Malaysia and
chain. However, to win in the market, UK companies the potential opportunities for foreign companies
would need to be competitive with existing (and areas where UK companies have strong
incumbents. Other potential sectors include small expertise), the estimated opportunity for UK
hydro and battery storage technologies. companies is approximately US$272 million. The
potential can go up to 34% for smaller projects
Solar
(in the range of 2.25MW). However, given the local
In light of the government’s announcements, it manufacturing base of several companies (First
is expected that there will be several rounds of Solar, China’s LONGI, JA Solar, Jinko Solar, etc.), the
LSS auctions in the period until 2025. Forming competitiveness of UK companies against a strong
joint ventures (JVs) and relationships with local incumbent will determine the potential for future
developers early on may enable UK companies opportunities under the NEM scheme in Malaysia.
with relevant capabilities to proactively prepare
Energy storage options with LSS projects could also
for the next LSS round. UK capabilities in solar are
emerge as a prominent sector in coming years.
primarily through overseas direct investments (ODI)
where UK developers develop, own and operate Bioenergy
medium to large scale projects (>50MW) and
Malaysia has amongst the highest biomass and
integrated hybrid solutions with energy storage and
biogas production potential in Asia. Biomass
mini–grid options where a generation system such
composition in Malaysia includes organic waste
as roof–top solar can be integrated with battery
from palm oil manufacturing plant, timber, rice
storage to create stand–alone island systems.
husk, livestock and municipal solid waste. Despite
This is an attractive proposition for remote rural
government focus and incentives, industry
areas. Ability to participate will be driven by the
participants face challenges in terms of technology,
competitiveness of UK companies when compared
reliability of feedstock, financial support, knowledge
to local or other overseas participants. UK
and expertise in the domestic market.
companies are also adept at providing a range of
professional services, including the design of policy, In relation to equipment supply, foreign
incentive structures for solar projects, general companies would need to be able to demonstrate
technical design, engineering and PMC services. the competitiveness and knowledge of the domestic
UK has limited capabilities on supplying balance of market. The UK has significant expertise in
plant (BOP) equipment such as inverters, cables, designing and implementing appropriate
panel frames and bespoke Building Integrated frameworks and incentives schemes, as well as
Photovoltaics (BIPV) panels. The UK does not have designing and delivering many forms of energy
expertise in manufacturing solar panels. from waste facilities along with surrounding
infrastructure. To win in the market, UK companies
A number of UK companies such as Lightsource,
would need to be able to manufacture machines
Solarcentury and Proinso have the capabilities to
calibrated to raw materials in Malaysia. In addition,
develop large utility–scale power plants. Developers
domestic manufacturers are able to demonstrate
such as Solar Securities and British Solar Group
better after–sale service in maintenance or
which largely have domestic or regional experience
equipment replacement, making them the preferred
may consider venturing into new markets.
choice when compared to foreign companies where
longer lead times are needed.1 Strengthening the
after–sales service through local partners could
strength the positioning of UK companies.
1
Oil Palm Biomass & Biogas in Malaysia, 2017 – Potentials for European SMEs.
Companies such as Virindor, Bioenergy system, energy storage is a sector that is likely
Infrastructure Group, FCC and Aggreko Plc Group to emerge as a sector of prominence in Malaysia.
have successfully constructed and operated WTE UK companies can closely monitor this subsector
systems in the UK. The UK companies, with a and participate in early engagement with SEDA
suitable local partner, can leverage its significant and private generators to further explore specific
expertise across the value chain. It is estimated commercial deployment opportunities.
that the UK companies are capable of supporting
Green financing
around 15% of project value of a typical 250,000
ton p.a. plant with experience in design, engineering Green finance is defined as funding any means
and construction services for all types of WTE of reducing carbon emission or raising resource
facilities. In the Malaysian context, the opportunity efficiency. Green funding, between the funding
is estimated to translate to US$12 million. In case itself and its surrounding services, is generally
of anaerobic digestion, it is estimated that the UK considered as an enabler for the development of
value addition can be up to 40%, if competitive renewable energy projects. The UK is well placed
with other suppliers, translating to over US$32 to support and can potentially enable projects
million of opportunities in the Malaysian context. that would not otherwise happen. The associated
The UK’s unmatched capabilities lie in the services services such as legal, accounting, insurance, etc.,
industry where UK is able to provide services up to which could be around 1–5% of the project value,
90% of service needs.1 is considered as export and is a domain where the
UK companies excel.2 Malaysia has raised over
Small hydro
US$1.9 billion in bonds for renewable energy and
The UK has strong expertise across the value chain sustainability projects.3 The associated services
for small–scale hydro. Generally, UK’s involvement related to issuing such bonds create tangible
overseas is limited to various consulting and opportunities for UK companies in professional
engineering activities and has not been typically services. Lenders like HSBC and Standard
involved in end–to–end development of large scale Chartered are active in the Malaysian market.
projects. In small hydro, the UK excels at large–scale
Other sectors
design and technical engineering, efficient and
reliable technology for small scale hydro through Sectors like wind and marine are still unexplored
companies such as Gilkes, intake screens, electrical in Malaysia. In DIT’s assessment, in largely
systems and financing support through UKEF. mature sectors, the UK companies would need
to be highly priced and competitive.2 The relative
Though UK solutions may appear slightly more
stability of the Malaysian economy in ASEAN has
expensive when compared to other markets,
positioned Malaysia as an attractive market entry
coupled with direct lending support, the UK offering
opportunity for the UK companies seeking to make
for small– to medium–scale hydro (referred to as
inroads into Asia. The UK companies may explore
mini–hydro in Malaysia) is strong, with the capability
opportunities where collaboration with UKEF could
to deliver up to 35% of project costs comprising
unlock opportunities for investment, finance and
of consultancy, civil engineering and systems.2
associated services.
Considering the estimated additions and the
potential opportunities for foreign companies (and Summary of Malaysian market opportunity
areas where UK companies have strong expertise), The renewable energy opportunity in Malaysia is
the estimated opportunity for UK companies is estimated to be in excess of US$1.6 billion across all
approximately US$8 million. sectors. The UK companies have leading capabilities
Energy storage solutions in green finance, technical, engineering and other
consulting services.1 Sectors such as biomass,
A number of UK companies operate in the BESS
biogas, solar and small hydro have the strongest
market, primarily in the UK and Europe. Given
alignment with UK expertise. With market maturity,
the challenges with the existing national grids
energy storage solutions are likely to be a sector of
with the increasing share of renewables in the
prominence in the future.
1
Oil Palm Biomass & Biogas in Malaysia, 2017 – Potentials for European SMEs.
2
UK DIT Capability Statement: Renewable Energy (2020). https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/755218/Renewables_
Toolkit_Web_Accessible.pdf.
Figure 8.1: Market Opportunity for Renewables Investment in Malaysia (US$ million)*
1,362
272
169
422
12 -32
49-69
379 - 691
49
667 8
88 16
25
Bioenergy Solar Small hydro

Estimated share of local Estimated share of foreign Potential for UK ompanied
*Sorted in descending order of market opportunity

Through its network of officers deployed in Malaysia can leverage the UK’s existing knowledge of doing
and UK-based trade advisors, the DIT can support business and providing strategic assistance to
UK companies wishing to expand into Malaysia. The Malaysia while developing their market entry strategy.
DIT helps businesses export and grow into overseas Interested parties are encouraged to reach out to the
markets by providing pragmatic advise, contacts DIT at at Trade.KualaLumpur@fco.gov.uk
and insight into the overseas market. UK companies
8.2 Upcoming Renewable

Energy Projects
New capacity in Malaysia is typically commissioned and relationships with local developers early on may
through SEDA. The fourth round of LSS for solar enable UK companies with relevant capabilities to
allocation has been completed and 1GW of capacity proactively prepare for the next LSS round.
has been allocated to 24 different bidders in
For immediate opportunities in the sector, SEDA is
September 2020. The projects are expected to be
currently running an e–bidding auction process for
commissioned by 2022/2023. Since 2017, there
biogas and small hydro for the year 2021.
have been four rounds of solar auctions, with LSS
4 offering the largest quota to date. Forming JVs
Table 8.2: SEDA e–Bidding Opportunities as of March 2021

Renewable resource Quota offered (MW) Expected commercial operations date Submission date
Biogas 31.805 H1 2024 1st – 15th June 2021
Small hydro 126 H1 2026 8th – 29th June 2021
Biomass 30 H1 2024 22nd – 6th July 2021
Source: SEDA.
Forming a consortium to bid for new capacity is likely particularly in audit, tax, legal services, financing,
to be the easiest route to market. As per current etc. Some opportunities are highlighted in the
guidelines, prior approval is required to change following table. Opportunities may also emerge in
ownership on awarded projects. Hence, participation the P2P segment, which is currently under pilot
post–award is likely to be more challenging for the phase wherein there can be direct arrangements
UK companies. between renewable energy generators and
customers to purchase electricity via the national
By the time projects are awarded, it is expected
grid.1
that developers would already have some clarity
on suppliers and financiers making participation As Malaysian banks move to issue green bonds and
relatively more difficult. Projects awarded through sukuks to spur growth in the renewables sector,
SEDA benefit from the FiT mechanism, offering a opportunities for financial and legal advisory
robust revenue model for foreign developers and services are expected. Apart from financing at a
financiers. For already awarded projects, the UK project level, purchase of government green bond
companies can still pursue financing opportunities issues may also be an interesting opportunity for the
and ancillary services with identified developers, UK lenders and institutional investors.
1
SEDA pilot programme on P2P trading. https://www.seda.gov.my/2019/10/malaysias–1st–pilot–run–of–peer–to–peer–p2p–energy–trading/.
Table 8.3: Potential Opportunities for The UK Companies
No Project name Capacity Technology Target COD Foreign service potential

date
1 IB vogt GmbH and Coara Solar Sdn. Bhd. 100 Solar PV 2021 Financing, insurance and
other professional services
2 Cypark Resources Berhad and Impian Bumiria 100 Solar PV 2021 Financing, insurance and
Sdn. Bhd. other professional services
3 JKH Renewables Sdn. Bhd. and Solarpack Asia 90.88 Solar PV 2021 Financing, insurance and
4 ENGIE Energie Services S.A.and TTL Energy 100 Solar PV 2021 Financing, insurance and
5 Konsortium Beseri Jaya Sdn. Bhd. and Hanwha 100 Solar PV 2021 Financing, insurance and
Energy Corporation Singapore Pte. Ltd. other professional services
Sources: ST, EY analysis.
8.3 Top Companies Ready

to Export
UK expertise lies in providing services with to provide advisory services across all technologies.
differentiating experience in wind and bio sectors, as British consulting companies like Mott Macdonald
shown in the figure below.1 Consulting firms are able and Atkins already have a presence in Malaysia.
Figure 8.2: Summary of UK Expertise Across Sectors and Services (Number of Companies)
Service area Solar PV Wind Hydroelectric Geothermal Bioenergy Marine Storage

/sector andsmart
grid
Consulting
Manufacturing
EPC services
O&M services
High Low
Source: EY analysis based on information provided in UK Tetra Tech report.
Note: A company may be active across multiple sectors and services and hence, would appear in more than one segment above.The above heat
map indicates the presence of the UK companies in the various renewable sectors and service areas, with a darker shade indicating the higher
presence (in terms of the number of companies) and vice versa.
The table below identifies some companies in the Companies identified in the above table should not
renewable energy sectors, based on the information be considered to be exclusive in respective sectors
compiled by FCDO, who have the potential to or as the only companies with export potential.
participate in renewable energy projects in
Further engagement would be needed to assess
Malaysia. Appendix 1 includes a long list of identified
if Malaysia is a target market for identified UK
companies. The table below is non–exhaustive and
companies.
is intended to be for illustrative purposes only.
Table 8.4: UK Companies Involved in Renewable Energy and Green Financing (Non–Exhaustive)
Company name Description Sector Expertise
RES group Independent renewable energy company with over 16GW portfolio Solar, wind, storage, Development,
and the expertise to develop, engineer, construct, finance and electrical networks O&M
operate projects
Aggreko Plc Engineering and construction firm specialising in wind (planning Biogas, wind, EPC, O&M
Group and infrastructure, construction, pre–commissioning, testing and energy storage
commissioning and O&M for both on– and off–shore facilities),
battery storage for solar PV (design and build) and biogas
(employing new technology)
Green Highland Independent hydropower project developer, operator and owner Hydropower Developer,
EPC, O&M
MAM Provides engineering and construction on hydroelectric schemes Hydropower EPC
Contracting
TLS Hydro Independent hydropower project developer, operator and owner Hydropower Developer,
EPC, O&M
Belectric Solar Develops, constructs and operates utility–scale solar power plants Solar, energy Developer,
and Battery and energy storage systems. Also offers BESS and hybrid power storage EPC, O&M
GmbH solutions
Deep Sea Manufacturer of control solutions. Provides gensets for solar Solar, hydropower Manufacturer
Electronics and marine applications and mains decoupling relays suitable for
hydropower applications
Pegasus Group Technical advisory firm providing engineering services, All renewable Professional
environmental advisory and consulting across renewable energy sectors services
sectors
PlanET Biogas Provides biogas services in planning, new construction, re– Biomass and biogas Professional
UK powering, technical (remote maintenance, support for CHP units, services
on–site replacement and advisories on new technologies), biological
(operations stability and substrate treatment) and biomethane
PM PROjEN Engineering design and project management firm focusing on the Biomass and biogas Professional
design and building of anaerobic digestion, biogas, biomass and services
liquid biofuels plants
Organics Group Provides services in landfill gas extraction and utilisation, anaerobic Biomass and biogas EPC
plc digestion, refuse–derived fuel and advanced thermal processing
(pyrolysis and gasification)
Agrivert Develops and operates organic waste treatment facilities Biomass (anaerobic EPC, O&M
digestion)
Bioenergy Has one of the UK’s largest portfolios of biomass and WTE facilities Biomass Developer
Infrastructure
Group
Organics group Primarily an EPC contractor. Provides services in landfill gas Biogas and WTE EPC,
extraction and utilisation, anaerobic digestion, refuse–derived fuel Manufacturer
and advanced thermal processing (pyrolysis and gasification)
Arup Technical advisory firm providing engineering services and All renewable Professional
consulting across renewable energy sectors, electrical networks and sectors services
energy efficiency
Atkins Technical advisory firm providing engineering services and All renewable Professional
consulting across renewable energy sectors, electrical networks and sectors services
energy efficiency
9. Appendix
Appendix 1:
UK Low–Carbon Capabilities
The UK has strong capabilities in many low– legal, policy, architectural design, engineering
carbon and resource–efficient services, design and environmental consulting. In energy
technologies and processes that have the export technologies, processes and operations and
potential. Leveraging past work prepared by maintenance, UK energy industries encompass
Carbon Trust (2013 and 2018), the UK’s strongest solar PV, wind, hydro, geothermal, bioenergy,
low–carbon services are in the areas of financial, marine and energy storage and smart grid.
UK companies involved in renewable energy and green financing
Company Sector Service area Description
Absolute Energy Solar PV, Finance • Independent investment platform focused on renewable
Capital hydroelectric energy
• Offers investment/co–investment opportunities as well as
business development potential to industrial and financial
clients
• Develops and deploys market–based solutions for rural
electrification and energy efficiency
Acropora Capital Solar PV, green EPC, finance • Investment and development company that develops
finance renewable energy projects, primarily in the Middle East
and Africa
• Specialises in fundraising for the development,
construction, operation and maintenance of developed
assets and provides access to desirable markets, which
are otherwise difficult to enter
Adrian Laycock Hydroelectric Consulting, EPC • Plans, designs and constructs small and micro–hydro
schemes, with sizes ranging from 50kW to 1MW or more
• Specialises in micro–hydro in environmentally sensitive
areas
Advanced Pump Hydroelectric, Manufacturing • Provides advice and solutions for hydro projects, from the
and Hydro bioenergy initial idea through to commissioning and generation
Systems Ltd.
• Uses new, innovative, cost–effective technologies such as
plastic generator screws and low–head Kaplan turbines
• Exclusive UK and Ireland agents for Bombas iDeal, which
offers a wide range of pump products and Wangen
Pumps, which manufacture progressive cavity pumps
AES UK Storage and Manufacturing • Offers a world–class, battery–based energy storage

smart grid system, Advancion®
• Introduced the first grid–scale advanced battery in
commercial power market service in 2008
• Operates the largest fleet of battery–based storage assets
in service today, working with customers to integrate
energy storage into eight power markets globally
Source: UK FCDO data provided in TetraTech Report.

UK companies involved in renewable energy and green financing (continued)
Aggreko Plc Solar PV, wind, EPC • Engineering and construction firm specialising in
Group bioenergy, storage wind (planning and infrastructure, construction, pre–
and smart grid commissioning, testing and commissioning and O&M for
both on– and off–shore facilities), battery storage for
solar PV (design and build) and biogas (employing new
technology)
AquaFloat Solar PV Manufacturing • A 2018 startup that has opened a 12MW manufacturing
facility for floating solar systems in Brampton, Cumbria
• Awarded with ISO 9001:2015 and ISO 14001:2015
certification for production facility
Arup Solar PV, wind, Consulting, EPC • An independent firm of designers, planners, engineers,
geothermal, architects, consultants and technical specialists working
bioenergy, storage across every aspect of the built environment, including
and smart grid off–shore wind, solar, WTE, as well as hydrogen and
electric cars
Atkins Solar PV, wind, Consulting, EPC • Provides design, engineering and project management
hydroelectric, consultancies
bioenergy, marine
• Produced the outline designs for breakwaters, turbine
houses and ancillary works
• Supported the tender process by helping develop
documents and reviewing responses and detailed designs
for Tidal Lagoon Swansea Bay Plc, the power–generating
tidal lagoon in Wales
Barclays Green finance Finance • Offers green loans to fund a range of environmental and
sustainability projects in energy efficiency, renewable
energy, green transport, sustainable food, agriculture
and forestry, waste management and greenhouse gas
emission reduction
Battery Energy Storage and O&M, others • An energy storage company that owns and operates a
Storage Solutions smart grid portfolio of battery sites
Ltd.
• Provides a range of services from frequency balancing to
reserve power
Belectric Solar Solar PV, storage EPC, O&M • One of the largest O&M providers globally
and Battery and smart grid
GmbH • Develops and constructs utility–scale solar power plants
and energy storage systems
• Offers BESS and hybrid power solutions, which combines
technologies to autarkic systems

Biffa Group Bioenergy O&M, others One of the largest municipal, industrial and commercial waste
management fleets in the UK
Offers construction waste management, logistics waste
solutions, recycling and hazardous waste management
Bioenergy Bioenergy EPC, O&M • Helped in establishing one of the UK’s largest portfolios of
Infrastructure biomass and WTE facilities
Group
• Has over 100MW of operational and late–stage
construction assets that will divert over 1 million tonnes
per annum of waste from landfills
Border Hydro Wind, EPC, O&M • Designs, installs and maintains grid–connected and
hydroelectric stand–alone wind turbines, a range of hydro turbines and
controllers and control panels
Cumulus Energy Storage and Manufacturing • Manufacturer and developer of grid–level energy storage
Storage Ltd. smart grid batteries with the lowest levelised cost of storage globally
CWind Wind EPC, O&M • Constructs, commissions, operates and maintains

large–scale offshore wind projects, including technician
and engineering support, training and inspection and
maintenance
Deep Sea Solar PV, Manufacturing • Electronics manufacturer of control solutions

Electronics hydroelectric,
marine • Provides gensets for solar and marine applications
and mains decoupling relays suitable for hydropower
applications
Doosan Babcock Bioenergy Manufacturing • Equipment manufacturer specialising in biomass

co–firing and conversion, including fuel handling and
milling, dedicated burners and combustion systems and
integrated steam turbine retrofitting
Dulas Ltd. Solar PV, wind, Consulting, EPC, • Renewable energy consultancy and installation on energy
hydroelectric, O&M storage for industrial solar, hydro and wind applications
storage and smart
grid • Services include planning and application support, site
design, through to project management, installation, O&M
and long–term service optimisation

Eaton Electrical Solar PV, wind, Consulting, • Power management company with sales of US$19.7 billion
marine, Storage manufacturing in 2016
and smart grid
• Provides research, development and implementation of
energy–efficient solutions
• Is a leading supplier of products and services for
renewable energy distribution and automation
• Offers programmable logic controllers to regulate PV
power plants worldwide
EcoMachines Storage and Finance, others • Invests in technology companies that are working to meet
Ventures smart grid energy demand and make the supply of energy secure
and stable
• Focus on innovative proprietary technologies, energy
efficiency and smart tech
EDS HV Group Wind EPC, O&M • Designs, connects, tests, commissions and operates
onshore and offshore wind projects
• Offers services, including installation, fault management,
advisories, high voltage (HV) safety, asset management
and commissioning
Ellergreen Hydro Hydroelectric Consulting, EPC • Helped in establishing one of the UK’s largest portfolios of
Ltd biomass and WTE facilities
• Has over 100MW of operational and late–stage
construction assets that will divert over 1 million tonnes
per annum of waste from landfills
Engie Solar PV, wind, EPC, O&M • Energy services firm that sources and supplies green
bioenergy, storage gas (sourced from generation plants that produce biogas
and smart grid from anaerobic digestion or landfill waste gas)
• Designs and installs battery storage solutions for small
and large businesses
EPS UK Storage and EPC, O&M • Offers a broad range of services, including switchgear
smart grid and circuit breaker design, rapid prototyping, 3D printing,
finite element analysis–based design improvement and
contract computer aided design (CAD) design service
• Offers services, including design of low–voltage
automation products, design of medium–voltage
equipment (up to 72.5kV) and transformer condition
monitoring

FCC Environment Wind, bioenergy O&M • Operates waste to energy facilities and makes use of
Ltd. existing sites around the UK, such as reclaimed areas of
landfills, to build small wind turbines
Fichtner Solar PV, wind, Consulting, EPC, • Specialises in the due diligence, procurement and
Consulting hydroelectric, others engineering of renewable energy technologies throughout
Engineers Ltd. geothermal, all project phases, from feasibility studies through to full
marine, storage operation
and smart grid
• Evaluates the impacts and optimises the design of
renewable energy projects
Flexitricity Storage and Consulting • Created the first demand response portfolio in Great
smart grid Britain
• Pioneered open–market aggregated demand–side
services for electricity system balancing
• Provides aggregated short term operating reserve (STOR)
and frequency control by demand management (FCDM),
footroom and demand turn–up, post–fault dispatch for
distribution networks, demand–side smart frequency
control and balancing mechanism access for demand–side
assets
Geothermal Geothermal EPC • Geothermal engineering and construction company that

Engineering is developing the UK’s first large–scale geothermal energy
plan in Cornwall
Gilbert Gilkes & Hydroelectric Manufacturing • Manufactures hydro turbines with capacities up to 20MW
Gordon Ltd.
• Exports to over 85 countries
• Has supplied over 6,700 hydroelectric turbines worldwide
Glen Hydro Hydroelectric Consulting, EPC • Developers and consultants who design, install, operate
and own hydroelectric schemes
• Advise on the economic viability and technical feasibility
of watercourse as a hydro investment
• Focus on developments over 100kW and up to 2MW in
capacity
Green Highland Hydroelectric Consulting, EPC, • Independent hydropower project developer, operator and
O&M, finance owner
• Offers services, including potential identification,
design and licensing, O&M, financing, construction and
commissioning

Green Investment Green finance Finance • Part of the Macquarie Group

Group
• Offers a full suite of financial services, including
development funding, financial close, construction
phase equity and debt and asset financing across both
established (offshore wind, onshore wind, solar, hydro,
inter–connectors, waste and biomass) and emerging
technologies through all stages of the project lifecycle:
development, construction and operations
Hallidays Hydroelectric Consulting, O&M • Global hydropower consultants specialising in the delivery
Hydropower Ltd. and maintenance of low–head, fish–friendly, run of river
hydropower schemes
• Services are provided from concept through feasibility,
design, licensing, installation and commissioning
Hotspur Geothermal EPC • Develops and constructs geothermal projects, focusing

Geothermal on large–scale projects, typically over 10MW, as well as
smaller–scale direct use heat and power projects
• Offers services, including potential resource identification,
exploration and drilling and advancing projects to
development
• Is targeting geothermal development in Indonesia
HSBC Bank Green finance Finance • Launched a range of new green finance products for UK
businesses — from small and medium enterprises to large
corporations, including a green loan, green revolving
credit facility and a green hire, purchase, lease and asset
account as part of HBSC’s commitment to providing £76
billion in sustainable financing and investment by 2025
Green Investment Green finance Finance • Part of the Macquarie Group

Group
• Offers a full suite of financial services, including
development funding, financial close, construction
phase equity and debt and asset financing across both
established (offshore wind, onshore wind, solar, hydro,
inter–connectors, waste and biomass) and emerging
technologies through all stages of the project lifecycle:
development, construction and operations
Hydroplan Hydroelectric Consulting, O&M • Offers hydropower consulting, in–house design, due
diligence, hydro scheme operations and maintenance,
survey services, feasibility studies, dam engineering,
tunneling and HV electrical

JDR Cables Wind, marine Consulting, EPC • Develops inter–array submarine electric cables for
offshore wind, wave and tidal energy projects
• Offers front–end engineering and design, project
implementation, product engineering and installation and
asset management
Kingspan Solar PV Consulting, EPC • Provides evacuated tube collectors and flat plate solar
panel technologies, consulting and engineering studies
and solar thermal system servicing
M.A.M. Hydroelectric EPC • Provides engineering and construction on hydroelectric

Contracting schemes
MannPower Hydroelectric EPC, O&M • UK’s first supplier of Archimedean screw hydropower
turbines
• Provides feasibility and design studies, detailed project
plans, construction and installation, commissioning and
remote management
MHI Vestas Wind Manufacturing • Manufactures offshore wind turbine blades and offers
Offshore Wind operations and maintenance and project management
services
• Offers the world’s largest commercially proven rotor (174
meters)
MLM Group Wind, bioenergy, Consulting, EPC • Privately–owned engineering, environmental and building
marine control consultancy
• Provides full design services for WTE plants
• Provides design services in biomass, wind farms and wave
generation
Moixa Storage and Manufacturing • Provides smart grid batteries and smart battery hardware
smart grid and GridShare software to facilitate smart energy storage
and sharing
• Specialises in batteries for solar storage
Mott MacDonald Solar PV, wind, Consulting, EPC, • Experienced in all types of renewable energy generation
hydroelectric, Finance and power T&D technologies
geothermal,
bioenergy, marine,
storage and smart
grid

N–ERGY Limited Solar PV, wind, EPC, O&M • Experienced in the design, development, operation and
Storage and maintenance of solar plants and wind farms
smart grid
• In the area of energy storage, provides battery
maintenance
NOJA Power Storage and Manufacturing, EPC • Provides medium–voltage reclosers and related products
smart grid to the international market
• Has installed more than 50,000 NOJA Power OSM series
Automatic Circuit Reclosers in 87 countries
Open Energi Storage and Consulting • Offers specialist consultancy services in decentralised,
smart grid digitalised energy management to help businesses assess
and value project opportunities
• Developed Dynamic Demand 2.0 software that dispatches
assets for capacity reserve schemes in line with market
obligations, by minimising costs and maximising
income opportunities during peak periods by reducing
consumption or dispatching generation assets in
response to price signals
Orbital Marine Marine Manufacturing • Pioneered floating tidal stream turbines in Orkney,
Power Scotland
• Developed Orbital O2 turbine representing a move toward
commercial operation
• Is developing tidal arrays at Lashy Sound orkney
Organics Group Solar PV, wind, EPC, O&M • Provides services in landfill gas extraction and utilisation,
plc bioenergy anaerobic digestion, refuse–derived fuel and advanced
thermal processing (pyrolysis and gasification)
• Constructed three biogas plants in Indonesia
• Environmental protection services cover enclosed
low–emission flare systems, thermal ammonia removal
systems, odour control, wastewater treatment and soil
decontamination
• Develops and operates solar PV, wind, biogas and
biodiesel projects
Osbit Wind Manufacturing • Provides design, manufacturing, integration and support

services for floating offshore wind plants
• Is supplying its MaXccess T–18 access system for Japan’s
first offshore wind farm to allow engineers’ safe access to
the 2MW downwind floating turbine and the 66kV floating
sub–station, which are situated in deep and rough waters,
20km off the coast of Japan

OXTO Energy Storage and Manufacturing • Has developed an innovative flywheel energy storage
smart grid system to enable a sustainable, low–carbon future
• Flywheel, designed to work alongside renewable
technologies such as wind and solar, allows an
intermittent renewable generation to continue
generating, even when the energy is not necessarily
required, with excess energy stored in OXTO’s steel
flywheels and then released when demand increases
Pegasus Group Solar PV, wind, Consulting, others • Experienced in solar power, on– and offshore wind
hydroelectric, (turbine schemes, from single turbines to wind farms),
bioenergy, marine bio–energy (biomass, from small to commercial scale),
tidal power, energy from waste, anaerobic digestion and
hydropower
• Offers services, including site assessment and feasibility
studies, environmental impact assessments and
mitigation design
Peter Bioenergy Manufacturing • Designs, manufactures and services steam turbines

Brotherhood and turbine generator sets up to 40MW applicable for
biomass powerplants and WTE plants
• Has installed thousands of steam turbines in more than
140 countries
• The only producer in the UK for steam turbines with
outputs up to 40MW
Plan B Bioenergy Consulting, EPC • Environmental management consultancy providing

Management management and technical support services to the waste
Solutions management industry
• Offers services, including procurement, interim
project and data management, procurement and work
programming
PlanET Biogas UK Bioenergy O&M • Provides biogas services in planning, new construction,
re–powering, technical (remote maintenance, support
for CHP units, on–site replacement and advisories on
new technologies), biological (operations stability and
substrate treatment) and biomethane
PM PROjEN Bioenergy Consulting, EPC • Engineering design and project management firm
focusing on the design and building of anaerobic
digestion, biogas, biomass and liquid biofuels plants
• Installed the UK’s first large–scale biodiesel plant

PROINSO UK Ltd Solar PV EPC, O&M • Integrates and distributes solar PV products, supplying
such components as inverters, modules, structures and
complete balance of system
• Develops a wide range of rooftop and ground–mount
structures (PROINSO PV Rack)
• Project development services range from identifying
project sites to contracting, construction and O&M
• Offers full support for engineering, procurement and
management
Pure Energy Solar PV, wind, Finance • Helps create, finance and build new renewable energy
Professionals Ltd. bioenergy, marine businesses
• Project services offered include co–development,
financing, procurement and construction management,
operations and asset management, acquisitions, disposal,
PPA and green credit marketing
• Specialises in joint ventures in the wind, solar, biomass
and marine energy
Ramboll Solar PV, wind, Consulting, EPC • Engineering and consulting firm
hydroelectric,
geothermal, • Has been involved in more than 20 solar heating projects
bioenergy, marine in 10 countries, with a total of more than 200,000m
• Has completed wind projects in 21 countries in offshore
wind and 60 countries onshore
• Optimises power stations, designs, monitors and assures
the quality of investments, both retrofits and new plants
• Specialises in seismic, geological and geophysical studies
and investigations, including modelling and reservoir
hydraulic calculations and evaluation
• Establishes major modern anaerobic digestion (biomass)
and biogas facilities using a variety of feedstocks and has
delivered over 60 biomass power, heat and CHP facilities
using a full spectrum of fuel types
• Is working on a 10MW tidal test array from concept
study to detailed design for both foundation design and
installation methodology
ROMAG Solar PV Manufacturing • Manufactures solar panel kits that can be fitted to almost
any roof
• Offers a new lightweight and most efficient PV panel, the
RSM 6 (60), for roof mounting

Siemens Gamesa Wind, storage and Manufacturing • A leading supplier of wind power solutions (on– and off–
UK smart grid shore wind turbines)
• Installed products and technology in more than 90
countries, with a total capacity base of over 89GW
• Offers hybrid power solutions to allow for the integration
of one or more renewable power generation assets with
tailored energy storage systems – heat or battery storage
SIMEC Atlantis Marine Manufacturing, O&M • Designs, supplies and maintains tidal turbines and subsea
Energy connection equipment
• Has more than 1,000MW of tidal stream marine projects in
various stages of development
• As lead developer, works with consortiums to secure
development rights for marine power projects. Is the
majority owner of MeyGen, the world’s largest tidal stream
energy project
• Has a formal agreement with GE to hare resources for
the ongoing development of utility–scale tidal energy
generation and associated energy storage solutions
Suez Environment Bioenergy Consulting, O&M • Part of the Suez Group

UK
• Handles over 10 million tonnes of waste in the UK
• Makes a significant and growing contribution to the circular
economy and sustainability by recovering value from these
waste materials
• Provides waste auditing and site assessments and recycling
and recovery services
Tidal Lagoon Marine EPC, O&M • Develops, constructs and operates tidal lagoon power
Power plc plants in the UK and internationally
• Is currently developing a national fleet of six tidal lagoons
to meet up to 8% of UK electricity demand or power for
around 30% of UK homes, as well as moving on a number
of potential projects overseas
TLS Hydro Hydroelectric EPC, O&M • Develops, constructs and operates hydropower sites
• Renovates older sites which are no longer operational
TNEI Solar PV, wind, Consulting • Specialist energy consultancy, combining power systems
Storage and smart analysis, renewables integration, environmental services
grid and noise assessment
• Works in distributed renewable generation and the
integration of low–carbon technology
• Provides a range of technical services, from GIS to civil
engineering and energy market analysis

Trade Link Hydroelectric Finance • Offers financial and commercial advice in accrediting
Solutions renewable generation plants, trading electricity, hydro
generation and feasibility studies
UKSOL Ltd. Solar PV Manufacturing • Produces high–quality solar PV modules that come with a
30–year British warranty
• Provides procurement and global support
• Exports into over 39 countries
• Has installed 2MW solar panels on a factory rooftop in
Manila, Philippines and 300kW modules on a new office
block in Ho Chi Minh city
Veolia UK Bioenergy O&M, Others • Provides a comprehensive range of waste, water and
energy management services, including commercial waste
collection, hazardous waste collection and treatment and
low–carbon heating for districts and communities
Viridor (Pennon Bioenergy O&M • Has 300+ advanced recycling, energy recovery and
Group) landfill diversion facilities and 10 energy recovery facilities
that maximise resource efficiency for non–recyclable
waste
• One of the UK’s largest independent power generators
from waste, with 274 megawatts (MW) of operating
capacity from ERFs, anaerobic digestion, solar and landfill
gas (including joint ventures), exporting 1.5 terawatt hours
of power during the 2018/19
Xero Energy Storage and Consulting, O&M • Independent T&D industry expert with expertise in micro–
Limited smart grid grids, private wire systems and smart grids, from small
domestic systems through to higher–voltage distribution
networks and transmission
• Offers a broad range of expert services, including
engineering, technical, commercial and regulatory
expertise on grid and electrical systems
Senobe Energy Storage and Others • Works with network infrastructure companies such as
smart grid power grids
• Identifies innovative ways to reduce or eliminate
reinforcement expenditure, increase reliability and
improve the environment for customers through energy
storage
• Delivers large–scale projects which transform returns for
investors and benefits for consumers

Appendix 2:
Upcoming Projects
The landscape for projects in the region is A consolidated summary of upcoming projects
dynamically changing. Projects are not always presented in each chapter is included in the
developed through a structured procurement following table. More detailed information is
process, but include a combination of unsolicited available for selected projects*.
and sponsor–initiated projects. The UK companies
interested in the sector must actively engage in
the market and market participants to explore
leads and develop opportunities.
Table 6.15: Summary of upcoming biofuel blend roll outs

(MW)
Ladang Tanah Solar PV Negeri 10.5 Selasih Mentari Sdn. Bhd. Permitting –
Merah Solar PV Sembilan
Park*
Machang Solar PV Solar PV Kelantan 45 Idiwan Solar Sdn. Bhd. Permitting 2020
Park
Chuping Solar PV Solar PV Perlis 48 Beseri Jaya Sdn. Bhd.; Under 2020
Park* Hanwha Energy Corp construction
Solar Management Solar PV Negeri 60 Solar Management Seremban Financed –

Rembau Solar PV Sembilan Sdn. Bhd.
Park*
Pasir Mas Floating Solar PV Kelantan 49 Tien Ching Energy Co Ltd; Announced –
Solar PV Park Umile LLP
Bayan Lepas Solar Solar PV Penang 0.923 Cleantech Solar Energy Permitting 2020
PV Park (India) Pvt Ltd
ENGIE TTL Kerian Solar PV Perak 100 Engie Energy Services Permitting 2021
Solar PV Park* International; TTL Energy
Sdn. Bhd.
Ib Vogt Coara Solar PV Terengganu 100 Coara Solar Sdn. Bhd.; ib vogt Permitting 2021
Marang Solar PV GmbH
Park
Suria Sungai Petani Solar PV Kedah 116 SolarPack Corporacion Permitting 2021
Solar PV Park Tecnologica SL
Cypark Impian Solar PV Terengganu 100 Cypark Resources Berhad Permitting 2021
Marang Solar PV
Park

(MW)
Hanwha Konsortium Solar PV Pahang 100 Hanwha Energy Corporation Permitting 2021
Pekan Solar PV Singapore Pte Ltd
Park
Bukit Selambau Solar PV Kedah 45 TNB Bukit Selambau Solar Under 2020
Solar PV Park* Sdn. Bhd. construction
Xinyi Glass Jasin Solar PV Malacca – – Under 2020

Solar PV Park construction
Kerian Solar PV Solar PV Perak 47 Redsol Sdn. Bhd. Under 2020

Park* construction
Kuala Ketil Solar PV Solar PV Kedah 1.3 Cleantech Energy Corp Pte Permitting 2020
Park Ltd
IKEA IPC Shopping Solar PV Selangor 0.5 – Permitting

Center Solar PV
Park
Teo Seng Capital Solar PV Johor 4 – Permitting 2021

Johor Solar PV
Farm
Pasir Gudang Solar Solar PV Johor 25 UiTM Solar Power Sdn. Bhd. Permitting –
PV Park*
Alor Gajah Solar PV Solar PV Malacca 6.8 Ikram Greentech Sdn. Bhd. Permitting 2020
Park
Sungrow Malaysia Solar PV – 150 – Permitting –

Solar PV Park
Ain Medicare Sdn. Solar PV Kelantan 2.533 GSPARX Sdn. Bhd. Permitting 2020
Bhd. Solar PV Park I
Ain Medicare Sdn. Solar PV Kedah 0.598 GSPARX Sdn. Bhd. Permitting 2020
Bhd. Solar PV Park
II
TATI University Solar PV Terengganu 0.999 GSPARX Sdn. Bhd.; TNB Permitting 2020
College Solar PV
Park
Setul Solar PV Park Solar PV Negeri 90 Vsolar Group Berhad Permitting –

Sembilan
Summary of upcoming projects (continued)

(MW)
Larut dan Matang Solar PV Perak 9.9 Asia Meranti Sdn. Bhd.; Permitting 2020
Solar PV Park Atlantic Blue Sdn. Bhd.;
Ocean Solar Energy Sdn. Bhd.
Beaufort Solar PV Solar PV Sabah 5 Constant Energy; Gaya Belian Permitting 2020
Park–2 Sdn. Bhd.; Stone EPC Sabah
Sdn. Bhd.
BP Energy–Kunak Solar PV Sabah 5 BP Energy Sdn. Bhd. Permitting 2020

Solar PV Park
Empangan Kelinchi Solar PV Negeri 30 B&Z Mechanical and Permitting 2020

Solar PV Park Sembilan Electrical Sdn. Bhd.; Nippon
Bumijaya Sdn. Bhd.
Beaufort Sabah Solar PV Sabah 6 Beau Energy East Sdn. Bhd. Permitting –
Solar PV Park
Kota Marudu Solar Solar PV Sabah 5.9 BT Solar Sdn. Bhd.; Regional Permitting –
PV Park Utilities Sdn. Bhd.
Tanjung Kubong Solar PV Sabah 5 Sabah Energy Corporation Permitting –

Solar PV Park Sdn. Bhd.
Kota Tinggi Solar Solar PV Johor 29 – Financed –

PV Park*
Penang Solar PV Solar PV Penang 20 Greenviro Solutions Sdn. Permitting –

Park Bhd.; PLB Terang Sdn. Bhd.
Sungai Kuala Muda Solar PV Kedah 30 Lembaga Tabung Angkatan Permitting –

Solar PV Park Tentera; Scomi Group Bhd;
Synergy Generated Sdn. Bhd.
Kinta Solar PV Park Solar PV Perak 9.99 Atlantic Blue Sdn. Bhd.; Permitting 2020
–1 Ocean Solar Energy Sdn. Bhd.
Mersing Solar PV Solar PV Johor 5 Fairview Equity Project Sdn. Permitting 2020
Park Bhd.
Kuala Muda Solar Solar PV Kedah 9.9 Kara Power Engineering Sdn. Permitting 2020
PV Park 1 Bhd.; Maju Solar Sdn. Bhd.
Kluang Solar PV Solar PV Johor 9.99 Fairview Equity Project Sdn. Permitting 2020
Park Bhd.

(MW)
Manjung Solar PV Solar PV Perak 9.99 Coral Power Sdn. Bhd. Permitting 2020
Park
Kota Kinabalu Solar Solar PV Sabah 2.6 Natural Majestic Sdn. Bhd.; Permitting 2020
PV Park Nusantara Megamas Sdn.
Bhd.
Papar Solar PV Park Solar PV Sabah 2.3 Amled Illumination M Sdn. Permitting 2020
Bhd.; GV Bumisinar Sdn. Bhd.
Labuan Solar PV Solar PV Labuan 10 Sabah Development Energy Permitting 2020

Park 2 Sdn. Bhd.; Symbior Solar
Siam
PLB Penang Solar Solar PV Penang 20 PLB Green Solar Sdn. Bhd. Permitting –
PV Park
Sungai Geruntum Small Perak 2 Conso Hydro RE Sdn. Bhd.; Permitting –

SHP hydro Perak Hydro Renewable
Energy Corporation Sdn. Bhd.
Sungai Tersat Small Terengganu 4 Metrosphere Sdn. Bhd.; TNB Permitting –

hydro Energy Services Sdn. Bhd.
Pulau Tengah Small Perak 10 Gunung Hydropower Sdn. Permitting –

project hydro Bhd.
Pulau Temelong Small Perak 10 Gunung Hydropower Sdn. Permitting –

hydro Bhd.
Kota 2* Small Sarawak 10.5 SEB Under –

hydro construction
Temenggor Small Perak 14 Maju Hydro Renewable Permitting –

hydro Energy Sdn. Bhd.; Perak
Hydro Renewable Energy
Corporation Sdn. Bhd.; Serba
Dinamik Group Bhd
Telekosang Hydro 1* Small Sabah 24 Inno Hydropower Sdn. Bhd.; Permitting 2021
Talang Small Perak 25.5 Maju Hydro Renewable Permitting –

Dinamik Group Bhd
Summary of upcoming projects (continued)

(MW)
Singgor Small Perak 27 Maju Hydro Renewable Permitting –

Dinamik Group Bhd
Sungai Pelus Large Perak 34 TNB Announced –

hydro
Ulu Ai Large Sarawak 54 TNB Announced –

hydro
Tekai Large Pahang 168 Tenaga Nasional Bhd Permitting 2021

hydro
Upper Padas Large Sabah 192 SESB Permitting 2024

hydro
Lebir Large Kelantan 274 Tenaga Nasional Bhd Announced 2022

hydro
Trusan Large Sarawak 275 SEB Permitting –

hydro
Nenggiri Large Kelantan 300 Tenaga Nasional Bhd Permitting –

hydro
Baleh* Large Sarawak 1285 SEB Under 20–26

hydro construction
Kuantan Biopower Biomass Pahang 2.4 Concord Green Energy Sdn. Permitting –
Project II Bhd.
Raub Biomass Biomass Pahang 3.942 Raub Energy Ventures (Re) Permitting –
Project Sdn. Bhd.
Naka Biopower Biomass Kedah 9.95 Majunaka Eco Energy Sdn. Under 2020
Project* Bhd. construction
Batu Pahat Biomass Biomass Johor 11 BELL Eco Power Sdn. Bhd. Permitting –
Project
Labis Biopower Biogas Johor 1 Megagreen Energy Sdn. Bhd. Under –

Project II* construction
Maran Biopower Biogas Pahang 1 Megagreen Energy Sdn. Bhd. Under –

Project construction

(MW)
Bota Biopower Biogas Perak 1 Megagreen Energy Sdn. Bhd. Under –

Project construction
Port Dickson Biogas Negeri 1 Cypark Smart Technology Permitting –

Biopower Project II Sembilan Sdn. Bhd.
Ulu Bernam Biogas Perak 1 United Plantations Berhad Permitting –

Biopower Project
Rantau Biopower Biogas Negeri 1.56 Gan Teng Siew Realty Sdn. Permitting –
Project II Sembilan Bhd.
Kinabatangan Biogas Sabah 2 Our Energy Group (M) Sdn. Permitting –

Biogas Power Plant Bhd.
Rompin Biogas Biogas Pahang 2.4 Felda Palm Industries Sdn. Permitting –
Project Bhd.
Sungai Kachur Biogas Johor 2.4 Green Biogas Sdn. Bhd. Permitting –
Biogas Power Plant
Kota Tinggi Biogas Biogas Johor 2.4 Concord Green Energy Sdn. Permitting –
Project III Bhd.
Dengkil Biogas Biogas Selangor 2.5 Biogas Sulpom Sdn. Bhd. Permitting –
Power Plant
Minyak Biogas Biogas Perak 2.7 Green & Smart Holdings plc Under –
Power Plant * construction
Ledang Biogas Biogas Johor 2.9 Green & Smart Sdn. Bhd. Financed –
Power Plant *
Johor Biogas Power Biogas Johor 3 Sungei Kahang Power Sdn. Permitting –
Project Bhd.
Tawau Biopower Biogas Sabah 3.8 Cahaya Bumijasa Sdn. Bhd. Permitting –
Project III
Simpang Pulai Biogas Perak 10 Rangkaian Iltizam Sdn. Bhd.; Permitting –

Biogas Power Plant Vsolar Group Berhad
Kinta Biopower WTE Perak 2.05 Selekta Spektra Sdn. Bhd. Permitting –
Project
SMART WTE Project* WTE Negeri 20 Cypark Smart Technology Under –

Sembilan Sdn. Bhd. construction
Jeram Waste to WTE Selangor 20 – Permitting 2020

Energy Facility
Phase I
Detailed project information
GlobalData Chuping Solar PV Park
Renewables Now Solar PV
Company websites 48MW
Project location Perlis, Malaysia
Developer JV of Malaysia–based energy firm Beseri Jaya Sdn. Bhd. and South Korea based energy firm
Hanwha Energy Corp
PPA status TNB signs 21–year PPA with KBJ Hecmy Sdn. Bhd. to purchase power from 30MWac Solar PV
power project in Mukim Chuping, Bukit Keteri, Perlis, Malaysia from 2020–41.
Tariff –
Financing Financing is in process
Financing sources Private
Permits Completed – Under construction
PPA off–taker Tenaga Nasional Bhd
Feasibility study Completed – Under construction
Other studies –
Any other issues –
Developer track record • Beseri Jaya Sdn. Bhd. – Malaysia–based company mainly involved in installation of non–
electric solar energy collectors, provide human resource consultancy services, etc.
• Hanwha Energy Corp – South Korea–based company was established in 2007. Hanwha
Energy is a comprehensive energy solutions company. It specialises in comprehensive energy
solutions that produce high–quality electricity and steam
Other stakeholders • OCBC Bank (Malaysia) Berhad – Providing finance

• ST – Implementing agency
Notes • KBJ Hecmy, a special purpose company set up by Hanwha Energy Corporation and Beseri
Jaya Sdn. Bhd. is the owner, developer and will operate and maintain the plant
• The AC capacity of the plant is 30MW
• The plant will be located in the Bukit Keteri in Malaysia’s northwestern state of Perlis
• A consortium, led by OCBC Bank, is providing finance for the project for setting benchmarks
for green syndicate project financing involving large–scale–solar (LSS) plants in the country
• Total CapEx for the project incurred is US$50 million
Business opportunities Professional services
Information sources • GlobalData

• Renewables Now
• Company websites
Project name Bukit Selambau Solar PV Park
Project type Solar PV
Installed capacity 40MW
Project location Kedah, Malaysia
Developer TNB Bukit Selambau Solar Sdn. Bhd. as an IPP
PPA status TNB signs 21–year PPA with TNB Bukit Selambau Solar to purchase power from 30MWac Solar PV
power project in Kuala Muda, Kedah, Malaysia from date of operation (not mentioned clearly).
Tariff –
Other studies –
Developer track record TNB Bukit Selambau Solar Sdn. Bhd., is a wholly owned subsidiary of Tre, a TNB Energy Services
Sdn. Bhd. company.
Other stakeholders • MUFG Bank Ltd. – Providing finance

• TNB Engineering Corp Sdn. Bhd. – EPC contractor
Notes • The AC capacity of the plant is 30MW

• The project is on track for completion before the end of 2020 with over 84% of the project in
Kedah having been constructed till December 2019
• Total CapEx for the project incurred is US$43.71 million
Information sources GlobalData

Detailed project information (continued)
Project name Kerian Solar PV Park
Project location Perak, Malaysia
Developer Redsol Sdn. Bhd. as an IPP
PPA status TNB signs 21–year PPA with Redsol Sdn. Bhd. to purchase power from a 30MWac Solar PV power
project in Daerah Kerian, Perak, Malaysia from 2019.
Tariff –
Other studies –
Developer track record Redsol, a special purpose company formed by Fumase (Malaysia) Sdn. Bhd. and Scatec Solar
Malaysia B.V.
Other stakeholders • BNP Paribas SA – Provides financial support

• Mott Macdonald LLC – Technical advisor
• Poyry PLC (Inactive) – Works as owner’s engineer, offering project management services,
engineering review services and other assistance services during project construction
• Scatec Solar ASA – Provide asset management services
Notes • Scatec Solar will provide 100% of the project’s equity and take care of the O&M of the project
• The AC capacity of the plant is 30MW
• Total CapEx for the project incurred is US$47 million

Project name Pasir Gudang Solar PV Park
Project location Johor, Malaysia
Developer UiTM Solar Power Sdn. Bhd. as an IPP
PPA status –
Tariff –
Permits Under consideration – Permitting
PPA off–taker –
Feasibility study Under consideration – Permitting
Other studies –
Developer track record UiTM Solar Power Sdn. Bhd. is a subsidiary of the largest university in Malaysia, the Universiti
Teknologi MARA. The company was involved in developing similar projects in past, such as
development of 50MW LSS PV plant in Gambang and development of 50MW PV project in
Kuantan, etc.
Other stakeholders Poyry PLC (Poyry) – Providing owner’s engineering (OE) services assignment for the plant
Notes Total CapEx for the project incurred is US$32.07 million.
Business opportunities Financing, insurance and other professional services.

Project name Solar Management Rembau Solar PV Park
Project location Negeri Sembilan, Malaysia
Developer Solar Management Seremban Sdn. Bhd. as an IPP
PPA status TNB signs 21–year PPA with Solar Management (Seremban) to purchase power from 50MW Solar
Project In Rembau, Negeri Sembilan, Malaysia from the date of operation (not clearly mentioned).
Tariff –
Permits Under consideration – Financed stage
Feasibility study Under consideration – Financed stage
Other studies –
Developer track record Solar Management (Seremban) Sdn. Bhd., a wholly owned subsidiary of Solar Management
(Chembong) Sdn. Bhd.. It will design, construct, own, operate and maintain the project.
Other stakeholders • China Machinery Engineering Corp – Providing equipment for the project
• Mattan Engineering Sdn. Bhd. – Providing equipment for the project
• Mattan Engineering Sdn. Bhd. – EPC contractor
Notes • Malaysia Building Society Bhd is providing finance for the project
• AC capacity of the plant is 50MW
Business opportunities Financing and other professional services

Project name Kota Tinggi Solar PV Park
Developer • Zelleco Engineering Sdn. Bhd

• Pengkalan Bumijaya Sdn. Bhd.
• Amled Illumination M Sdn. Bhd.
PPA status –
Tariff –
Permits Under consideration – Financed stage
PPA off–taker –
Feasibility study Under consideration – Financed stage
Other studies –
Developer track record –
Other stakeholders • Mattan Engineering Sdn. Bhd. – EPC contractor

• China Machinery Engineering Corp – EPC contractor
• Teknik Janakuasa Sdn. Bhd. – Operation, maintenance and repair of the solar plant
• Malayan Banking Berhad – Providing finance
Notes • China Machinery & Equipment (HK) Co., Ltd. (CMEC Hong Kong), a company affiliated to
CMEC and Mattan Engineering Sdn. Bhd., a Malaysia–based company, formed a consortium to
provide EPC services to the project
• Teknik Janakuasa Sdn. Bhd. (O&M provide) is the subsidiary of Malakoff Corp Bhd.
• Teknik Janakuasa Sdn. Bhd. and Zelleco Engineering Sdn. Bhd are jointly incorporated a
special purpose company called TJZ suria, to provide O&M and repair services to the plant for
21 years from December 2018

Project name Kota 2
Project type Small hydro
Installed capacity 10.5MW
Project location Sarawak, Malaysia
Developer SEB
PPA status –
Tariff –
PPA off–taker –
Other studies EIA – Alluvium staff were involved in the river hydraulic aspects of the Environmental Impact
Assessment for the project.
Developer track record SEB (Sarawak Energy), formerly Sarawak Enterprise Corporation Berhad, is a state–owned
investment holding company that generates, transmits, distributes and sells electricity. The
company generates power using sources such as coal, gas and hydro. It supplies electricity to
residential, commercial and industrial customers in the State of Sarawak in Malaysia. The company
operates coal–fired steam–turbine power plant in Kampung Geobilt, Kuching; gas–fired open cycle
power plant in Tanjung Kidurong, Bintulu; and coal–fired power station in Matadeng, Mukah.
Other stakeholders Entura – Investigation, feasibility and tender design of the project

Project name Baleh
Project type Large hydro
Installed capacity 1,285MW
Project location Sarawak, Malaysia
Developer SEB
PPA status –
Tariff –
PPA off–taker –
Other studies Geological study – Completed

SEIA (Social and Environmental Impact Assessment Study) – Completed
Any other issues -
Developer track record SEB (Sarawak Energy), formerly Sarawak Enterprise Corporation Berhad, is a state–owned
investment holding company that generates, transmits, distributes and sells electricity. The
company generates power using sources such as coal, gas and hydro. It supplies electricity to
residential, commercial and industrial customers in the State of Sarawak in Malaysia. The company
operates coal–fired steam–turbine power plant in Kampung Geobilt, Kuching; gas–fired open cycle
power plant in Tanjung Kidurong, Bintulu; and coal–fired power station in Matadeng, Mukah.
Other stakeholders • China Gezhouba Group Co. Ltd. – Civil contract works
• GHD Pty Ltd. – Providing feasibility study for this project
• MWH Global Inc – Providing feasibility study for this project
• Sinohydro Corp. Ltd. – Diversion tunnel construction works
• SMEC (Malaysia) Sdn. Bhd. – Provided pre–engineering design services for implementation
under a Design and Build contract
Notes • The main civil works contract has been awarded to China Gezhouba Group Company Limited
and Untang Jaya Sdn. Bhd. (comprise 30%) Joint Venture, following Sarawak’s State Cabinet
endorsement in March
• The Consortium, comprising the company GE Hydro France, GE Renewable Malaysia and
Sinohydro Corporation, has bagged electrical and mechanical works
• Total CapEx for the project incurred is US$2,042.9 million

Project name Naka Biopower Project
Project type Biomass
Project location Kedah, Malaysia
Developer Majunaka Eco Energy Sdn. Bhd. as an IPP
PPA status Tenaga Nasional Bhd signed PPA agreement with the Majunaka Eco Energy Sdn. Bhd. to purchase
7MW power from the plant for a tenure of 16 years from the date of operation (not clearly
mentioned about the date).
Tariff –
Other studies –
Developer track record Majunaka was incorporated in 2013 as a subsidiary company of Infrakomas Sdn. Bhd. The power
plant is currently under construction and is expected to be operational by 2020. Upon completion,
the power plant will improve the power supply situation in Naka and Kedah in general and it will
be the first major power plant in mainland Kedah.
Other stakeholders Kementerian Tenaga, Teknologi Hijau dan Air, Malaysia – Finance provider
Notes • The project will use 300 tons per day of paddy husks and wood chips to generate electricity
• Padiberas Nasional Berhad will supply paddy husk for the project
• Out of 9.95MW, 7MW is supplied to TNB and the rest is used for self–consumption

• Company website
Project name Labis Biopower Project II
Project type Biomass
Developer Megagreen Energy Sdn. Bhd. as an IPP
PPA status –
Tariff –
PPA off–taker –
Other studies –
Developer track record Megagreen Energy Sdn. Bhd.'s business includes construction and operation of biogas power
generation plants. It is a private limited company, based in Malaysia. It was established in 2014.
Other stakeholders Green and Smart Sdn. Bhd. – EPC contractor and commissioning service provider
Notes • Megagreen will exchange five biogas to power plants (with a total capacity of 6MW) in federal
land consolidation and rehabilitation authority (Felcra) mills

• Secondary research
Project name SMART WTE Project
Project type WTE
Developer • Cypark Smart Technology Sdn. Bhd. as an IPP (owner)

• Hitachi Zosen Corp (operator)
• KNM Process Systems Sdn. Bhd. (operator)
PPA status Tenaga Nasional Bhd signed PPA agreement with the Majunaka Eco Energy Sdn. Bhd. to purchase
7MW power from the plant for a tenure of 16 years from the date of operation (not clearly
mentioned about the date).
Tariff –
Financing –
Financing sources Financing is in process
Permits Private
PPA off–taker Complete – Under construction
Feasibility study Tenaga Nasional Bhd
Other studies Complete – Under construction
Developer track record • Cypark Resources Berhad is diversifying into the less cyclical business of renewable energy
(RE) generation and waste management concession business to strengthen its income–
generating capability and ability to reward shareholders. The company is now investing
RM300 million to build a WTE plant in Ladang Tanah Merah, Negeri Sembilan, that would
commence construction in early 2014. This facility will be able to produce 25MW of power
from handling solid waste disposal and has the ability to increase capacity in the future
• Hitachi Zosen Corp (Hitz) is an industrial and engineering company. It designs, constructs and
operates refuse incineration and recycling facilities, pressure vessels, marine diesel engines
and press machines and other process machine
• KNM Process Systems Sdn. Bhd. (KNM process), a subsidiary of KNM Group Bhd is an oilfield
equipment provider that manufactures and markets modular process systems. It offers plant
operation and maintenance equipment and process plants, modules and equipment. KNM also
offers turnkey systems and plant operation and maintenance services. The company caters to
oil and gas, petrochemicals and minerals processing and energy industries
Other stakeholders -

• Company website
Project name Ledang Biogas Power Plant
Project type Biogas
Developer Green & Smart Sdn. Bhd. as an IPP
PPA status –
Tariff –
Permits Under consideration – Financed
PPA off–taker
Feasibility study Under consideration – Financed
Other studies –
Developer track record Green and Smart is a Malaysian registered company established under the Malaysian companies
act 1965 on 11 March 1980 as Mardec Engineering Sdn. Bhd.. It was primarily involved in
wastewater treatment for the rubber industry before venturing into waste treatment for the palm
oil sector as this became an increasingly important market in Malaysia and Indonesia.
Other stakeholders –
Notes • The plant will be developed at Milik Mestika Sdn. Bhd. mill at Ledang
• Plant will be developed under Build–Own–Operate (BOO) model

Project name Minyak Biogas Power Plant
Project type Biogas
Developer • Green & Smart Sdn. Bhd. as an IPP
PPA status –
Tariff –
PPA off–taker
Other studies –
Developer track record Green and Smart is a Malaysian registered company established under the Malaysian companies
act 1965 on 11 March 1980 as Mardec Engineering Sdn. Bhd.. It was primarily involved in
wastewater treatment for the rubber industry before venturing into waste treatment for the palm
oil sector as this became an increasingly important market in Malaysia and Indonesia.

• Company website
Project name Ladang Tanah Merah Solar PV Park
Developer • Selasih Mentari Sdn. Bhd. as an IPP (Owner)

• Cypark Renewable Energy Sdn. Bhd. (Contractor)
PPA status –
Tariff –
PPA off–taker –
Other studies –
Any other issues The project was awarded in 2017 and expected to be complete by 2018, but it did not get
implemented on ground due to locational disputes.
Developer track record • Selasih Mentari Sdn. Bhd. is a company based in Malaysia, with its head office in Kuala
Lumpur. The company operates in the electric power generation sector. The enterprise was
incorporated on October 10, 2011
• Cypark Resources Berhad is a publicly listed company on the Main Board of Bursa Malaysia
since 2009. The company has been Malaysia’s pioneering developer and provider in
integrated renewable energy, green technology, environmental engineering solutions and
construction engineering
Notes • Cypark Resources Bhd had won contract worth US$12.4 million from Selasih Mentari in 2017
• According to the contract, Cypark would construct a 10.50MW solar PV plant at Ladang Tanah
Merah within duration of 17 months and 25 days, starting from May 23, 2017 to November 16,
2018
• AC capacity of the plant is 8MW
• The plant will be located at Ladang Tanah Merah

Project name ENGIE TTL Kerian Solar PV Park
Developer • Engie Energy Services International as an IPP

• TTL Energy Sdn. Bhd.
PPA status Power will be sold to TNB under a PPA
Tariff –
Other studies –
Developer track record • GDF Suez Energy International (Engie Energy Services International SA) is headquartered
in Belgium. The company’s line of business includes providing electricity for industrial and
commercial companies in North America, Latin America and the Middle East, Africa and Asia
• TTL Energy Sdn. Bhd. is a Malaysia–based energy sector company, which is mainly involved in
generation and supply of power and electricity from the source of solar PV technology
Other stakeholders ST – implementation agency
Notes • ENGIE Energie Services S.A. and TTL Energy Sdn. Bhd. are owner and developer of the plant
• The project was won by the developers from Malaysian energy regulator ST under LSS 3, the
third round of the national procurement programme for utility–scale solar PV
• Power will be sold to TNB under a PPA
• ENGIE Energie Services S.A. is subsidiary of Engie Energy Services International

• Newspaper articles
Project name Telekosang Hydro 1
Project type Small Hydro
Project location Sabah, Malaysia
Developer • Senja Optima Sdn. Bhd. (70%)

• Inno Hydropower Sdn. Bhd. as an IPP (30%)
PPA status The developer signed a 21 year renewable energy power purchase agreement (REPPA) with Sabah
Electricity, with a scheduled FiT commencement date of July 31, 2021.
Tariff RM 0.240/kWh
PPA off–taker SESB
Other studies –
Developer track record • Senja Optima Sdn. Bhd. is a Malaysia–based energy sector company, mainly involved in
development of small hydro power projects along with investing in such projects and trading.
Other stakeholders • Sinohydro Corp. Ltd.; Power Construction Corporation of China – EPC contractor
• Global Elite O&M Sdn. Bhd. – O&M
Notes • The plant will be built, operated and managed by Telekosang Hydro One (TH1).
• Telekosang Hydro One is a joint–venture company with Inno Hydropower (T) Sdn. Bhd. (wholly
owned by Yayasan Sabah)
• ZJ Advisory Sdn. Bhd. is acting as a financial adviser
• SMHB Sdn. Bhd. is acting as a project management consultant
• The FiT rate of the project, which is scheduled to commence on 31 July 2021, is approved at
0.240 RM/kWh
• The total estimated project cost will be funded via the issuance proceeds from the senior
bonds (80%), the junior bonds (3%) and redeemable preference shares (17%)

• Newspaper articles
Appendix 3: List of References

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industry/posts/, accessed 28 February 2020.
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services–sector/posts/, accessed 28 February 2020.
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Publishing Institute (MDPI), https://www.mdpi.com/1996–1073/12/12/2437, accessed 28 February 2020.
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for–developing–WTE–market–Thailand–Malaysia.pdf, accessed 28 February 2020.
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columnists/2020/03/574645/opportunity–capitalise–green–technologies, accessed 28 February 2020.
“Malaysia to allocate another 500 MW of rooftop PV under net metering,” PV Magazine, https://www.pv–
magazine.com/2021/02/01/malaysia–to–allocate–another–500–mw–of–rooftop–pv–under–net–metering/,
accessed 8 March 20.
“The generation of biogas in Malaysia – chance or risk?,” Rodl & Partner, https://www.roedl.com/insights/
renewable–energy/2019–08/generation–of–biogas–in–malaysia–chance–or–risk, accessed 28 February
2020.
“Biomass and bioenergy: An overview of the development potential in Turkey and Malaysia,”
Renewable and Sustainable Energy Reviews, https://www.sciencedirect.com/science/article/abs/pii/
S1364032117307323, accessed 28 February 2020.
“Guidelines for AT&PA Biomass,” Sustainable energy development authority (SEDA), http://www.seda.gov.
my/pdfdownload/biomass–atpa–guideline_updated–june–2018/, accessed 28 February 2020.
“Malaysia’s 1st Pilot Run Of Peer–To–Peer (P2P) Energy Trading,” SEDA, https://www.seda.gov.
my/2019/10/malaysias–1st–pilot–run–of–peer–to–peer–p2p–energy–trading/, accessed 28 February 2020.
“E–Bidding exercise for biogas under Feed in Tariff (FiT),” SEDA, http://www.seda.gov.my/download/
presentation–materials/, accessed 28 February 2020.
“Guidelines for Solar Photovoltaic Installations on Net Energy Metering systems,” SEDA, http://www.
seda.gov.my/reportal/wp–content/uploads/2021/01/NEM3–Guidelines.pdf, accessed 28 February 2020.
“Extension of Green Investment Tax Allowance (GITA) & Green Income Tax Exemption (GITE) until 2023,”
SEDA, http://www.seda.gov.my/reportal/re–incentive/, accessed 28 February 2020.
“SEDA Guidelines for Biomass & Biogas acceptance tests 2018,” SEDA, http://www.seda.gov.my/
pdfdownload/biomass–atpa–guideline_updated–june–2018/, accessed 28 February 2020.
“SEDA Initiates Country’s First Insurance Protection Scheme For Home And Commercial Solar PV
Owners With Allianz Via Anora Agency & MPIA,” SEDA, https://www.seda.gov.my/2018/10/seda–initiates–
countrys–first–insurance–protection–scheme–for–home–and–commercial–solar–pv–owners–with–allianz–
via–anora–agency–mpia/, accessed 28 February 2020.
“Large Scale Solar (LSS),” SEDA, http://www.seda.gov.my/reportal/re–incentive/, accessed 28 February
2020.
“Testing And Commissioning (T&C) of Small Hydro,” SEDA, https://www.seda.gov.my/download/seda–
guidelines/tc–of–small–hydro/, accessed 28 February 2020.
“Net Energy Metering (NEM),” SEDA, http://www.seda.gov.my/reportal/nem/, accessed 28 February
2020.
“Presentation Materials,” SEDA, http://www.seda.gov.my/download/presentation–materials/, accessed
28 February 2020.
“Registered PV Investors (RPVI) Renewal and New Registration for the Year 2020,” SEDA, http://www.
seda.gov.my/2019/11/registered–pv–investors–rpvi–renewal–and–new–registration–for–the–year–2020/,
“National Survey Report of PV Power Application in Malaysia – 2018,” International Energy Agency (IEA)
and SEDA, https://iea–pvps.org/national_survey/national–survey–report–of–pv–power–application–in–
malaysia–2018/, accessed 28 February 2020.
“What We Do,” Sarawak Energy, https://www.sarawakenergy.com/what–we–do/power–generation,
“PUB to start installation of 300,000 smart water meters at 7 locations in 2021,” The Straits Times,
https://www.straitstimes.com/singapore/environment/pub–to–start–installation–of–300000–smart–
water–meters–at–7–locations–in–2021, accessed 28 February 2020.
”Guidelines On Large Scale Solar Photovoltaic Plant For Connection To Electricity Networks,”
Suruhanjaya Tenaga, https://www.st.gov.my/contents/2019/LSS/Guideline%20on%20LSSPV%20for%20
Connection%20to%20Electricity%20Networks_%20February%202019.PDF, accessed 28 February
2020.
“Guidelines on Tariff Determination Under Incentive Based Regulation For Tenaga Nasional Berhad,”
Suruhanjaya Tenaga, https://www.st.gov.my/ms/contents/publications/guidelines_electricity/2016/
Registered%20Guidelines%20on%20Tariff%20Determination%20Under%20IBR%20for%20TNB.pdf,
“Guidelines On The Connection Of Solar Photovoltaic Installation For Self–Consumption,” Suruhanjaya
Tenaga, https://www.st.gov.my/contents/publications/guidelines_electricity/2017/Guidelines%20
on%20the%20Connection%20of%20Solar%20Photovoltaic%20Installation%20for%20Self–
Consumption–280417.pdf, accessed 28 February 2020.
“Report on Peninsular Malaysia Generation Development Plan 2019 (2020 – 2030),” Suruhanjaya
Tenaga, https://www.st.gov.my/contents/files/download/169/REPORT_ON_PENINSULAR_MALAYSIA_
GENERATION_DEVELOPMENT_PLAN_2019_(2020_%E2%80%93_2030).pdf, accessed 28 February
2020.
“Sabah Electricity Supply Industry Outlook 2019,” Suruhanjaya Tenaga, https://www.st.gov.my/contents/
files/download/106/SABAH_ELECTRICITY_SUPPLY_INDUSTRY_OUTLOOK_2019.pdf, accessed 28
February 2020.
“Toward a World–Class Energy Sector,” Suruhanjaya Tenaga, https://www.st.gov.my/contents/files/

download/112/Energy_Malaysia_17_(Online)_.pdf, accessed 28 February 2020.
“Components of IBR,” Suruhanjaya Tenaga, https://www.st.gov.my/contents/highlight/2018/
Components%20of%20IBR.pdf, accessed 28 February 2020.
“Peninsular Malaysia Electricity Supply Industry Outlook 2019,” Suruhanjaya Tenaga, https://www.
st.gov.my/contents/files/download/106/PENINSULAR_MALAYSIA_ELECTRICITY_SUPPLY_INDUSTRY_
OUTLOOK_2019.pdf, accessed 28 February 2020.
“TNB investing in smarter grid for Malaysia,” Smart Energy International, https://www.smart–energy.
com/industry–sectors/smart–grid/tnb–smarter–grid–malaysia/, accessed 28 February 2020.
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business–news/2019/05/14/tnb–continues–to–play–active–role–in–re, accessed 28 February 2020.
“Malaysian project to produce green energy from waste will power 25,000 homes,” The Star, https://
www.thestar.com.my/lifestyle/living/2018/12/21/waste–green–energy–worldwide–holdings, accessed 28
February 2020.
“Residential Pricing & Tariffs,” Tenaga Nasional, https://www.tnb.com.my/residential/pricing–tariffs,
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highlights/TNB_Handbook_Period_Ended_Mar19_–2.pdf, accessed 28 February 2020.
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industrial/pricing–tariffs1/, accessed 28 February 2020.
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overview, accessed 28 February 2020.
“Smart microgrid for sustainable rural development,” The Borneo Post, https://www.theborneopost.
com/2019/02/13/smart–microgrid–for–sustainable–rural–development/, accessed 28 February 2020.
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(UNCTAD), https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf, accessed 28 February 2020.
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Foreign Agricultural Service, https://apps.fas.usda.gov/newgainapi/api/report/
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great.gov.uk
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Renewable Energy Business Opportunities

Abbreviation & Acronyms

Investment potential of renewable energy projects in Malaysia as per 2025 targets

Renewable energy programme The government has also started to encourage

Conclusion Market values for renewable energy projects

Technology Market size Foreign share in market size

Solar PV 1,362 694

Total 1,580 799

Table 3.2 Types of Bonuses for Use of Solar PV as Building Material 34

Table 3.3 Examples of Commercial Banks Active in Renewable Energy in Malaysia 41

Table 4.2 Estimated Market Size — Solar PV (2021–2025) 54

Table 4.5 Summary of Upcoming Projects in Solar PV 55

Table 5.1 Small Hydropower Plants (<30MW) 60

Table 5.2 Estimated Market Size — Small Hydropower (2021–2025) 63

Table 5.5 Summary of Upcoming Projects in Small Hydro (<30MW) 64

Table 5.6 Summary of Upcoming Projects in Large Hydro (>30MW) 65

Table 6.1 Biomass Power Plants in Malaysia 68

Table 6.2 Estimated Market Size — Biomass (2021–2025) 68

Table 6.5 Summary of Upcoming Projects in Biomass 69

Table 6.6 Estimated Market Size — Biogas (2021–2025) 72

Table 6.9 Summary of Upcoming Projects in Biogas 73

Table 6.10 Current WTE Plants in Malaysia 75

Table 6.11 Estimated Market Size — WTE (2021–2025) 75

Table 6.14 Summary of Upcoming Projects in WTE 77

Table 6.15 Summary of Upcoming Biofuel Blend Roll Outs 78

Table 6.16 Current Biofuel Plants in Malaysia 79

Table 7.1 Current Microgrids in Place in Malaysia 81

Table 8.1 Summary of Business Opportunities for UK Companies 84

Table 8.2 Seda E–Bidding Opportunities As of 24 March 2021 88

Table 8.3 Potential Opportunities for UK Companies 89

1. About The Study

Step 3: Estimating the Foreign Share Market Exchange rate

2. Malaysia Energy Industry

Malaysia — country overview Population (2019): 32.4 million

Source: Oxford Economics.

20,000 Indonesia Philippines

Indonesia Vietnam Malaysia Philippines Thailand Myanmar

2.2 Key Government

Vertically integrated Single–buyer model

Malaysia Vietnam Philippines Singapore

The overall electricity market structure is shown below.

Policymaker Ministry of Energy and Natural Resources

Vertically integrated utilities (VIUs)

Figure 2.5: Key Government–Linked VIUs in The Power Sector

TNB SESB SEB

Generates 52% of Malaysia’s Generates 11%7 of Malaysia’s

Other stakeholders Role relevant to electricity sector

2.3 Major Government

Incentive–Based Regulation (IBR)1

ICPT surcharge ICPT to reflect

Year 1 Year 2 Year 3

2.4 Overview of The Power

Figure 2.8: Electricity Consumption in Malaysia (TWh, 2000–2030)

Sources: ST – Statistics (Final electricity generation), GlobalData.

Figure 2.9: Electricity Generation in Malaysia (TWh)

Source: International Energy Agency (IEA).

1.0 2.4 2.8 5.0 0.9 0.4 8.9 9.3 4.8

Total electricity generation (terawatt hour (TWh))

Capacity mix Figure 2.11: Installed Capacity by Fuel Type

Source: ST Energy Commission – National Energy Balance (2018).

Projected capacity mix1

40% Renewable energy

Source: TNB – Tariff rates.

WTE Biogas Biomass Small hydro Solar