The Malaysian government has lifted its ban on renewable energy exports, a much-anticipated move that experts say will boost the local renewables sector and benefit neighbouring Singapore.

In a slew of announcements on Malaysia’s renewable energy policies, economy minister Rafizi Ramli said that the lifting of the renewable energy export ban was agreed at a cabinet meeting on 3 May.

At the same meeting, the government also reached a consensus on a targeted renewable energy mix of 70 per cent by 2050, which would require an eleven-fold increase in renewable energy capacity from current capacity, Rafizi said.Malaysia’s previous target to achieve a 40 per cent renewable energy mix by 2035 was announced in late 2021.Although details on the renewable energy trade mechanism have yet to be announced, Rafizi said that more details on the additional layers of policy frameworks and incentives will be unveiled in the coming months.“I’m not big on going with a big announcement and big policy framework and then waiting for [the industry and society] to pick [them] up. We’d rather do it piece by piece,” he said at a press conference just before the announcement.“But what I think you will be able to see is that there is a consistency in focus on the pace and implementation of energy transition-related projects, incentives, frameworks and an easing out of regulations,” he said.Rafizi was appointed economy minister in November last year following the appointment of Anwar Ibrahim as Malaysia’s tenth prime minister. While the energy sector is governed by the ministry of natural resources, environment and climate change (NRECC), Rafizi said some 60 per cent of his time as minister has been spent working on energy transition-related matters.NRECC minister Nik Nazmi Nik Ahmad had previously said the two ministries were working together to review the renewable energy export ban, alongside the trade ministry. 

 

Experts expect that the lifting of the export ban on renewable energy, which had been in place since October 2021 under a previous administration, will spur the power sector to boost investments into renewable energy.

 

“The removal of the export ban provides the opportunity to Malaysian renewable energy providers to generate more revenue, over and above the market rates from the existing power purchase agreement system,” said Nur Farah Syifaa Mohamed, equity research analyst at Maybank Investment Bank. “We expect this will provide another avenue of growth for renewable energy players.”

The government’s latest initiatives were also a welcome move to free up market-driven development of renewable energy, which will help accelerate energy transition momentum, said Peter Godfrey, managing director for Asia Pacific at the Energy Institute in Singapore. “It will also help empower organisations focused on renewable energy development to look more closely at the development of microgrids and other off-grid energy solutions,” he told Eco-Business. 

 

In line with its increased targets, the Malaysian government also green-lit the development of self-contained renewable energy systems. This will enable the trade of renewable energy by private sector participants on a “willing buyer, willing seller basis”, said Rafizi.