Malaysia

  • Power demand and supply outlooks

  • Institutional and regulatory frameworks

  • Generation mix and fuel security

  • Private sector participation

  • Renewable energy and efficiency promotion

  • Cross-border power trade opportunities

Governance & Regulation

Malaysia’s power sector is regulated by the Energy Commission (Suruhanjaya Tenaga), which oversees licensing, tariffs, and compliance. Policy direction comes from the Ministry of Energy Transition and Water Transformation (formerly MESTECC, now MET), which sets national energy strategies. The Sustainable Energy Development Authority (SEDA) promotes renewable energy and administers feed-in tariff (FiT) and quota systems. Long-term planning is anchored in the Malaysia Electricity Supply Industry (MESI) reforms and national development blueprints such as the Renewable Energy Roadmap (MyRER).

Market Structure

Malaysia operates a single-buyer model. The national utility, Tenaga Nasional Berhad (TNB), is the principal buyer of electricity from Independent Power Producers (IPPs). TNB owns most of the transmission and distribution networks in Peninsular Malaysia, while Sabah Electricity Sdn Bhd (SESB) and Sarawak Energy Berhad (SEB) operate in East Malaysia. Although reforms toward more competitive wholesale markets have been discussed, the sector remains centrally planned with strong state oversight.

Private Participation & Renewables

Private sector participation is well established in generation through IPPs, operating under long-term Power Purchase Agreements (PPAs) with TNB. Malaysia has introduced policies to accelerate renewable energy:

  • Feed-in Tariff (FiT): Initially supported solar, biomass, biogas, and small hydro.

  • Large-Scale Solar (LSS) tenders: Competitive auctions for utility-scale solar projects.

  • Net Energy Metering (NEM): Allows rooftop solar owners to offset consumption.
    Targets aim for 31% renewables in capacity by 2025 and 40% by 2035, while reducing reliance on coal.

Industry Participants

  • TNB: Dominant state-owned utility in Peninsular Malaysia, controlling transmission and distribution.

  • SESB: Utility in Sabah (majority owned by TNB, minority by state government).

  • SEB: Vertically integrated utility in Sarawak, heavily reliant on hydropower.

  • Independent Power Producers (IPPs): Play a key role in thermal and renewable generation under PPAs with TNB.

  • SEDA: Administers FiT quotas and renewable energy certification.

Cross-Border Trade Opportunities

Malaysia is actively engaged in ASEAN Power Grid initiatives, with interconnections to Thailand (Peninsular grid), Singapore (via Johor), and Indonesia (Sarawak–West Kalimantan). These links support both imports and exports, especially hydropower from Sarawak to neighboring regions. Malaysia is positioning itself as a potential regional clean energy exporter, leveraging its hydro and solar resources.