Malaysia well positioned to accelerate energy transition
25 Nov 2024
Malaysia is better placed to adapt to the flood risk in the ASEAN region and will become more competitive in the new-age industries by scaling up renewable energy.
Globally, climate change and energy transition face major challenges, such as shifting to low-carbon sources in electricity generation, industry energy usage and transportation fuel; developing technology and innovation for energy transition; and 3) mobilising transition finance for mitigation and adaptation.
Sustainability researchers with Maybank Investment Bank Bhd (MIBG Sustainability Research) noted that in all of these areas, the financially stronger, highincome economies are able to demonstrate scale and speed.
“This is similar within Asean, and so far Singapore is leading the transition by developing clear policies, strategies and financing to achieve net zero by 2050,” commented MIBG Sustainability Research in its special report titled “Malaysia ESG Focus: Slow Transition, Improving Disclosures” yesterday.
“Like Singapore, Malaysia has a strong financial base and pragmatic policies for shifting to a low-carbon economy.
“However, Malaysia’s low adoption of renewable energy is still its weakest link, affecting its corporate net zero implementation and rapid decarbonisation at scale.
“We believe Malaysia is better placed to adapt to the flood risk in the Asean region and will become more competitive in the new-age industries, such as electronics, technology, AI and data centres by scaling up renewable energy, clearly giving it more opportunities than risks.
“Our favourite sustainability themes in Malaysia are in sectors such as renewable energy EPCC and asset ownership, including selective Utility players.”
Right now, Malaysia accounts for 0.77 per cent of global emissions, emitting 367.76 million tonnes of carbon dioxide equivalent in 2021. This makes it the world’s 25th largest emitter.
In terms of commitments, it has a net zero by 2050 target outlined in the Twelfth Malaysia Plan, and a second, updated version of its Nationally Determined Contribution (NDC), where it updated its mitigation target to 45 per cent reduction in GHG emissions (unconditional) by 2030 compared to 2005 levels.
According to MIBG Sustainability Research, the average annual temperature in Malaysia is projected to increase by 1.1-1.5 Celcius degrees by 2050, and by 1.7-2.1 Celcius degrees by 2100, with Sabah and Sarawak facing higher levels of increments.
The increase in temperature is likely to impact the country, and this includes water security,
We believe Malaysia is better placed to adapt to the flood risk in the Asean region and will become more competitive in the new-age industries, such as electronics, technology, AI and data centres by scaling up renewable energy, clearly giving it more opportunities than risks.
MIBG Sustainability Research
food security, public health and biodiversity with compounding effects on vulnerable sectors and communities.
Traditionally, Malaysia has been a fossil-fuel producer due to its bountiful oil & gas reserves, with coal imports increasing as energy demand rises every year by around two to three per cent.
It has a 1.1 per cent share of renewables in electricity generation, putting it at No. 96 of 198 countries. Its share of coal in electricity generation is 44.5 per cent, ranking it No.14.
Malaysia’s electricity capacity is divided between independent power producers (IPPs) and Tenaga Nasional Berhad (TNB).
The nation operates three major grids in Peninsular Malaysia, Sabah and Sarawak, each facing unique challenges and opportunities in the transition to cleaner energy.
Malaysia’s proximity to the equator provides strong solar irradiance in the range of 15751812 kwh/m2 throughout the year, comparable to countries with more mature and developed solar PV markets.
According to one think tank report reviewing Malaysia’s renewable resource potential, it can install 269GW of solar PV, 13.6GW of large hydro, 3.6GW of bioenergy, 2.5GW of small hydro and 229MW of geothermal.
Source: Borneo Post
