Malaysia could save RM3 billion a year by fixing how it counts clean energy — report

Malaysia could save more than US$700 million (around RM3.3 billion) every year and cut up to 1.8 million tonnes of carbon emissions if it shifts to real-time clean electricity

System Modelling

Analysis

KUALA LUMPUR, 16 October 2025 — Malaysia could save more than US$700 million (around RM3.3 billion) every year and cut up to 1.8 million tonnes of carbon emissions if it shifts to real-time clean electricity, according to a new study by climate analytics group TransitionZero.

The report warns that Malaysia’s current system — where companies use annual renewable certificates to claim “clean” energy — hides how much fossil fuel is still burned on the grid. A new approach called 24/7 carbon-free electricity (CFE) would require every hour of power use to be matched with actual renewable generation.

“Malaysia is a corporate decarbonisation hotspot,” said Isabella Suarez, Southeast Asia Lead Analyst at TransitionZero. “Global tech, manufacturing, and energy-intensive industries are looking for reliable clean energy in Southeast Asia. Our study shows Malaysia can deliver, provided grids are reinforced, and incentives and schemes harness corporate demand.”

TransitionZero’s modelling finds that the payoff could be huge:

In Peninsular Malaysia, achieving 80% hourly clean power by 2030 would save US$600 million in LNG imports each year — while running the system US$20 million cheaper than the current setup.
In Sarawak, 90% hourly clean power could be reached with just 1 GW of solar and 350 MW of batteries, saving another US$44 million annually in fuel costs.

“Hourly matching of clean electricity is a no-regrets strategy for Malaysia,” said Matt Gray, TransitionZero’s Co-founder and CEO. “IIt delivers cost savings to the wider system and sends a powerful signal to global investors and corporates that Malaysia is serious about leading Southeast Asia’s clean energy transition.”

The study urges policymakers to triple Malaysia’s 7 GW solar target, remove the 15% cap on power sell-backs, and lower wheeling costs so that more companies can buy and share renewable energy directly.

TransitionZero says the reforms would make Malaysia far more attractive to energy-intensive industries — from semiconductors to data centres — that are under pressure to clean up their supply chains.

With existing grid links to Singapore, Thailand, and Indonesia, Malaysia also has a chance to become a regional clean energy hub, exporting surplus renewables through the ASEAN Power Grid.