Malaysia has established strong foundations for an orderly and gradual transition away from coal power, underpinned by a commitment not to build new coal power generation and a final transition date of 2044. Its policy and regulatory framework, along with its long-term goal to reach a 70% share of renewables by 2050, provide a strong basis for the country to capitalize on its natural assets and develop cheaper and more sustainable electricity generation alternatives. This transition offers profound benefits for Malaysians, including lower-cost renewable energy, less pollution and reduced exposure to fuel import costs and volatility. However, it is not without challenges. A renewables led system will need to be stabilized with additional baseload or “firm” power as coal gradually exits. Gas has been earmarked to play this role on an interim basis, until new firm and balancing resources can be brought online through the ASEAN Power Grid (APG) and potentially with nuclear energy. 

The report “Beyond Coal: Building a Flexible, Resilient and Clean Power System for Malaysia” published by World Economic Forum outlines nine strategic recommendations and accompanying policy and investment solutions surfaced through the structured dialogue to meet these challenges and build a flexible, resilient and clean power system which provides a strong and secure foundation for Malaysia’s future economic growth: 

  • Ensure renewables availability lends coal retirements
  • Strengthen system flexibility to enhance integration of renewables
  • Enable coal site repurposing as a no-regrets solution through a National Coal Site Repurposing Framework
  • Leverage fuel blending as a transitional option contributing to coal phase-down
  • Utilize coal-flex where it supports VRE integration and avoids substitution by gas
  • Unlock financing to support coal repurposing and early retirement where conditions allow
  • Manage gas use as a transitional fuel, while avoiding long-term lock in
  • Explore nuclear as a long-term alternative to gas for firm, low-carbon power
  • Build on Malaysia’s regional leadership to advance the ASEAN Power Grid, enabling system balancing, and progressively reducing reliance on gas

Access the report here