Solar and grid flexibility critical for Malaysia's future electricity affordability and security

This report by Ember examines Malaysia's electricity transition, arguing that leveraging the country's vast solar resources and improving grid flexibility through battery storage and regional interconnections can enhance energy security and affordability. It highlights the potential for solar to meet daytime demand peaks and suggests that aligning with more ambitious pathways, such as those from IRENA, could significantly reduce reliance on volatile fossil fuel imports.

• Malaysia possesses significant untapped solar potential, with an estimated 268 GW of indigenous solar capacity. The National Energy Transition Roadmap (NETR) target of 14 GW by 2035 utilizes only about 5% of this potential, leaving "95% of Malaysia's solar potential untapped".
• In Peninsular Malaysia, solar generation costs have decreased significantly, dropping 64% from $0.082 USD per kWh in 2016 to $0.029 USD per kWh by 2023. This makes solar generation "53% cheaper than fossil fuel generation costs", which were $0.063 USD per kWh in 2023.
• Peninsular Malaysia's electricity demand is characterized by "twin" peaks at 4 pm and 8 pm. While solar can address the daytime peak, the evening peak requires complementary sources such as hydropower or battery energy storage systems (BESS). In 2023, solar and hydro combined met "up to 10% of Peninsular Malaysia’s daytime peak".
• The Peninsular Malaysia grid can technically accommodate a solar penetration rate of up to 30%, though a 20% limit is recommended to maintain affordability and reliability. In 2023, the highest solar penetration reached only 5% (799 MW), suggesting the grid can accommodate "four times the amount" before reaching the 20% limit, even without storage.
• Malaysia's three electricity regions—Peninsular Malaysia, Sabah, and Sarawak—currently operate independent markets with no grid interconnections. Integrating these grids could allow Sarawak to share its ample hydropower to improve Sabah's power security and enable Peninsular Malaysia to use hydropower during evening peaks.
• The report suggests that Malaysia could align with an IRENA 1.5C scenario, which would require the country to be fully powered by renewables by 2050. This would involve solar generation reaching 83 TWh by 2035, a "four-fold increase over Malaysia’s current NETR pathway target of 10% (25 TWh)".
• Battery Energy Storage Systems (BESS) are critical for long-term grid stability, but private investment remains limited due to high costs. The report recommends introducing tenders that integrate solar and storage (similar to India's FDRE model) and providing a "different tariff scheme for BESS services" to make projects more bankable.

APA

Nadhila, S., & Setyawati, D. (2024). Solar and grid flexibility critical for Malaysia's future electricity affordability and security. Ember. https://ember-energy.org/app/uploads/2024/10/Report-Solar-and-grid-flexibility-critical-for-Malaysias-future.pdf

Chicago

Nadhila, Shabrina, and Dinita Setyawati. Solar and grid flexibility critical for Malaysia's future electricity affordability and security. Ember, 2024. https://ember-energy.org/app/uploads/2024/10/Report-Solar-and-grid-flexibility-critical-for-Malaysias-future.pdf.

Wikipedia

{{cite report |last1=Nadhila |first1=Shabrina |last2=Setyawati |first2=Dinita |title=Solar and grid flexibility critical for Malaysia's future electricity affordability and security |publisher=Ember |date=7 August 2024 |url=https://ember-energy.org/app/uploads/2024/10/Report-Solar-and-grid-flexibility-critical-for-Malaysias-future.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nadhila2024solar, author = {Nadhila, Shabrina and Setyawati, Dinita}, title = {{Solar and grid flexibility critical for Malaysia's future electricity affordability and security}}, institution = {Ember}, year = {2024}, month = aug, url = {https://ember-energy.org/app/uploads/2024/10/Report-Solar-and-grid-flexibility-critical-for-Malaysias-future.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }