Malaysia’s national grid can take on more RE, says Irena chief

Grid capacity for renewables

Malaysia's national power grid can absorb more renewable energy (RE) through 2030 without compromising stability, according to International Renewable Energy Agency (IRENA) director-general Francesco La Camera — though investment in the grid of the future needs to be committed now to sustain the energy transition.

"At the moment, Malaysia is not in the hurry but naturally, the grid has to evolve to make it possible for even more RE sources to come in. This will also increase the appetite for investments, once you are sure you can deliver the electricity and be paid in return. It is one of the more relevant push to encourage additional RE capacity," — IRENA director-general Francesco La Camera, speaking to The Edge at the Malaysia Energy Transition Outlook launch

Renewables' share of installed generation capacity (excluding battery storage) is expected to reach up to 33% by 2030, according to IRENA's Malaysia Energy Transition Outlook Report.

Investment needed for the grid

The report estimates US$4.8 billion in investment is needed for the national transmission grid through 2030, alongside up to 1.4GW of new solar capacity added to the grid annually over that period, to keep Malaysia's energy transition on a climate-safe path. Grid operator Tenaga Nasional Bhd is already investing RM7 billion a year through 2024 under its Grid of the Future programme, which also covers ASEAN power grid interconnectivity ambitions. A 2021 Energy Commission report separately outlined plans to install five 100MW battery energy storage units annually from 2030 to 2034 to address system stability.

Fossil fuel subsidies are the near-term headwind

The biggest short-term obstacle to RE investment, La Camera said, is energy subsidies still skewed toward fossil fuels. IRENA's research found renewables are already the cheapest electricity source across four-fifths of the planet — a finding he said applies to hydrocarbon-producing countries like Malaysia too. As long as subsidies persist, he said, consumers remain shielded from the real cost of energy, making it essential that incentives and investment shift toward long-term, sustainable uses.

"It is about giving the chance for RE to compete on equal footing on the technology front. Technology already exists — when someone says we need improvements in new technologies to effectively address climate change, we [at Irena] make clear that this [assertion] is to delay the energy transition," — Francesco La Camera

Source: The Edge Markets