By Engku Shariful Azni Engku Ab Latif
KUALA LUMPUR, Dec 18 (Bernama) -- 2025 has been nothing short of an exciting year for Malaysia, sparking new ideas and driving growth across the energy sector.
Malaysia also leveraged its role as ASEAN chair to champion regional progress in the energy segment, with numerous dialogues, plans, roadmaps and initiatives launched through various conferences and forums.
These efforts were not only designed to strengthen the domestic energy ecosystem but also served as crucial building blocks for the ASEAN Power Grid (APG) and the region’s broader energy-integration goals.
ASEAN’S ENERGY TRANSFORMATION
One of the key milestones this year was the launch of the ASEAN Plan of Action for Energy Cooperation (APAEC) 2026–2030 in October, which will serve as ASEAN's policy compass for the next decade as the region moves toward a low-carbon, secure and inclusive energy future.
APAEC outlines clear pathways to expand renewable energy, improve energy efficiency and strengthen regional power interconnection.
The action plans unveiled during the ASEAN Energy Business Forum 2025 also placed inclusiveness at the centre of the region’s energy transition, recognising that despite member states being at different development stages, the region must progress together to ensure no one is left behind.
Building on APAEC as its foundation, the ASEAN Renewable Energy Long-term Roadmap was introduced at the 43rd ASEAN Ministers on Energy Meeting, focusing on long-term renewable energy policies to bridge the gap between regional ambitions and carbon-neutrality goals.
The roadmap provides a strategic blueprint to ensure that energy transition becomes a key pillar of the ASEAN Community Vision, supporting the region’s aspiration to become the world’s fourth-largest economy while driving competitiveness and sustainable growth.
Central to this effort are flagship initiatives such as the APG, which aims to enhance cross-border electricity trade and grid resilience, and the Trans-ASEAN Gas Pipeline, which links ASEAN’s gas infrastructure to enhance regional gas security and flexibility, supporting more efficient gas utilisation while complementing renewable energy growth.
Together, these frameworks and programmes underscore ASEAN’s collective commitment to balance energy security, affordability and decarbonisation, while ensuring an inclusive transition that accommodates differing national capabilities.
TNB FOR MALAYSIA'S ENERGY DEVELOPMENT
Back home in Malaysia, the country is accelerating efforts to meet the National Energy Transition Roadmap (NETR) target of raising renewable energy to 70 per cent of national capacity by 2050.
This push involves coordinated action across government, agencies, companies and industry players, all working toward a cleaner and more resilient energy future.
Among others, Tenaga Nasional Bhd (TNB) continues to lead the charge through major sustainable energy initiatives.
In May, its wholly-owned subsidiary TNB Power Generation Sdn Bhd (TNB Genco) formed a partnership with Riyadh-based ACWA Power to explore and develop projects that will further advance Malaysia’s shift toward cleaner and more efficient energy solutions.
These collaborations include the hybrid hydro floating solar project, expected to generate up to 1.0 gigawatt (GW) of capacity at the Kenyir and Puah reservoirs in Terengganu, forming a core part of TNB’s 2.5GW flagship NETR initiative.
The partnership also covers the development of an integrated water and power project consisting of a 2.1GW combined-cycle gas turbine plant and a 400,000-cubic-metre-per-day seawater reverse osmosis desalination facility at Pulau Carey, Selangor.
Momentum continued in June, when Prime Minister Datuk Seri Anwar Ibrahim announced TNB’s RM43 billion commitment to upgrading the national grid.
The modernisation plan includes artificial intelligence and battery energy storage systems, which will significantly improve grid resilience, flexibility and efficiency as Malaysia transitions toward a low-carbon future.
This investment, he emphasised, is essential for reducing emissions and strengthening energy security, an ambitious undertaking given that fossil fuels still dominate nearly 80 per cent of the global energy mix.
Yet, with decisive policy direction and strong public–private collaboration, Malaysia is laying the groundwork for a cleaner, more competitive and sustainable energy landscape in the decades ahead.
ENERGY SECTOR GROWTH NEXT YEAR
As Malaysia enters 2026, the nation’s transition toward a greener and more resilient energy future is accelerating. Strengthened policy frameworks, expanding private-sector participation, and new climate-oriented measures continue to shape the country’s low-carbon agenda.
Under NETR, Malaysia targets 70 per cent of its electricity generation capacity from renewable sources by 2050, an ambition supported by strong industry participation and the RM150 million National Energy Transition Fund to fast-track private-led initiatives.
A key catalyst in this transition is the large-scale solar 6 programme, which will inject nearly 2 GW of new solar capacity into the grid, equivalent to about RM6 billion in private investments.
En route to achieving greener and cleaner ambitions, states across Malaysia have embarked on their transition by rolling out various renewable energy, low-carbon and decarbonisation projects.
Among others are Sarawak, which emerged as Malaysia’s front-runner in carbon capture, utilisation and storage (CCUS), focusing on offshore carbon storage, as the state benefits from large depleted offshore oil and gas reservoirs and favourable deepwater geology.
Backed by its state government and Petroleum Sarawak Bhd (Petros), along with flagship initiatives such as Petroliam Nasional Bhd’s (Petronas) Kasawari CCUS project, Sarawak is turning into a regional carbon dioxide storage hub integrated with hydrogen and gas value chains.
In Peninsular Malaysia, Johor is emerging as a regional clean energy hub, focusing on solar power, green hydrogen and energy storage, supported by its proximity to Singapore and cross-border energy collaborations.
In Selangor, two waste-to-energy plants being built in Jeram are expected to be completed by this month's end and operational in the first quarter of 2026. Each plant will cater to 1,500 tonnes of waste daily, significantly easing the burden on the current landfill that is nearing full capacity while generating energy.
At the same time, the government is preparing to introduce a Carbon Tax next year, beginning with the iron, steel, and energy sectors.
PM Anwar said the tax will be implemented in alignment with the upcoming National Carbon Market Policy and the Climate Change Bill to ensure a smooth and effective rollout.
Complementing these efforts is the Green Technology Financing Scheme, offering RM1 billion in financing and available until Dec 31, 2026.
The scheme provides government guarantee incentives of up to 80 per cent for waste-sector green technology projects and up to 60 per cent for initiatives in energy, water, transport, and manufacturing.
In essence, Malaysia’s strategic blend of policy reforms, financial incentives, and private-sector engagement is laying the groundwork for a robust and sustainable energy ecosystem, positioning the nation to meet its long-term climate commitments while unlocking new economic opportunities.
-- BERNAMA
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