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A new initiative now allows businesses in Malaysia to purchase green electricity directly from renewable energy developers through the national grid. The country’s Ministry of Energy Transition and Water Transformation (PETRA) estimates that it will generate more than MYR 10 billion ($2.4 billion) in direct investments.
Malaysia’s PETRA has issued the regulatory framework for its Corporate Renewable Energy Supply Scheme (CRESS).
The program allows businesses to purchase green electricity directly from renewable energy developers via Malaysia’s national electricity grid. It officially opened on Sept. 20, but it was first announced in July.
PETRA’s newly published guidelines outline eligibility criteria for both companies seeking to purchase and developers looking to sell electricity.
Developers must register their projects and declare their energy output, which must align with the maximum electricity they sell. Developers are permitted to serve multiple companies and companies are allowed to source green electricity from more than one developer, up to a maximum capacity declared by the local Electricity Utility Company (EUC).
The EUC will be responsible for ensuring both the developers and companies involved in an agreement are connected to the grid. It will also carry out the billing process, which will be based on meter readings and carried out on a monthly basis.
The program is expected to lead to a shift away from longer term power purchase agreements (PPA) in Malaysia. It builds on former renewable energy incentives the Malaysian government has enacted, such as the Corporate Green Power Programme, which enabled businesses and corporations to sign virtual PPAs with renewable developers.
In July, PETRA estimated that CRESS would generate more than MYR 10 billion in direct investments and create nearly 14,000 new jobs in the sustainable energy industry. The ministry has said that it is confident the program will “support and be the catalyst to the energy transition goals and development of the electricity supply sector.”
Malaysia has set a target of increasing the share of renewable energy in its electricity mix to 40% by 2035 and 70% by 2050. |
