Utility-scale solar malaysia

Malaysia's Ministry of Energy and Natural Resources has announced the fifth …
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Malaysia''s Ministry of Energy and Natural Resources has announced the fifth

The Malaysian government has kicked off a 2 GW solar tender featuring four packages of rooftop, ground-mount, and floating solar, with permitted generation capacities ranging from 1 MW to 500 MW.

Nuno Marques, Unsplash

Malaysia''s Ministry of Energy and Natural Resources has announced the fifth round of the nation''s Large Scale Solar (LSS5) tender.

It features four packages with permitted generation capacities ranging from 1 MW to 500 MW. The 2 GW up for grabs is more than double the capacity made available under the fourth round of the scheme in 2021. 

The first package includes 250 MW of rooftop or ground-mount solar plants, with permitted generation capacities of 1 MW to 10 MW. It is open to companies with at least 51% Bumiputera ownership (which refers to the Malay and indigenous people of Malaysia) that are registered as a small- and medium-size enterprises (SME) with SME Corp Malaysia.

The second package includes 250 MW of rooftop or ground-mount solar, but with permitted generation capacities of 10 MW to 30 MW. It is open to companies that have at least 51% Bumiputera ownership, or from consortia with at least one Bumiputera company holding at least 51% equity.

The third package covers 1 GW of rooftop or ground-mount solar power plants, with permitted generation capacities of 30 MW to 500 MW. The fourth package features 500 MW, and covers floating solar plants with permitted generation capacities of 10 MW to 500 MW.

The final two packages are open to companies that are incorporated in Malaysia with a minimum 51% local Malaysian equity, or consortia where at least one member is a company incorporated in Malaysia, with at least 51% local Malaysian equity.

Malaysia''s Energy Commission said solar plants developed under LSS5 are scheduled for operation in 2026.

Interested developers can submit proposals until April 16, at a cost of MYR 3,000 ($631). Submissions can be made to the Energy Commission until July 25.

Malaysia had installed 1,933 MW of solar by the end of 2023, according to data from the International Renewable Energy Agency.

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Naturally endowed with huge solar power resources, Malaysia is well-positioned to leverage it to meet its electricity needs and substantially enhance its energy security and affordability.

The report examines Malaysia''s electricity transition roadmap, focusing on how it can maximise its plentiful solar potential with targeted policies for faster solar growth and battery storage. It also evaluates the electricity trends in each key region, Peninsular Malaysia, Sabah and Sarawak, offering an overview of the opportunities and challenges and suggesting how they can contribute to Malaysia’s renewable energy targets. The transition pathway provided in a Malaysia-specific energy transition study by the International Renewable Energy Agency (IRENA) is used as a benchmark to demonstrate that a pathway to clean electricity can deliver increased affordability and security benefits for the country.

Malaysia''s National Energy Transition Roadmap (NETR) sets an ambitious commitment for the country to reach 70% renewable capacity in the energy mix by 2050, with solar power as the dominant source and gas utilised as the transitional fuel away from baseload coal.

From data provided in the NETR, Ember estimates that the generation share of renewables will contribute to about 52%, and gas will account for the remaining 48% of the mix in 2050. This could leave Malaysia’s power sector vulnerable to global fuel price volatility and domestic reserve depletion. Hence, the government could look to raise renewable energy ambitions for the power mix to be better diversified.

By utilising more of its abundant solar power resources, Malaysia can unlock affordability and security benefits in the power sector. Technically, solar power can reliably meet Malaysia’s daytime demand, while the non-solar hours demand could be addressed by utilising hydropower and building more storage facilities over time. Despite the high cost, investing in energy storage solutions such as battery energy storage systems (BESS) is critical. Efficiently managing the increasing solar loads requires upgrading the current grid infrastructure.

A gradual increase in solar power could also strengthen affordability in Malaysia’s power sector, insulating the country from the risk of rising electricity tariffs, which may be caused by fossil fuel price volatility. Therefore, policies to further support solar growth and BESS adoption across Peninsular Malaysia, Sabah and Sarawak regions can allow each region to excel in its solar power adoption and contribute to the national power transition target.

Peninsular Malaysia, accounting for 74% of the country’s electricity demand, exhibits a daily demand profile with "twin" peaks in the daytime at 4 pm and evening at 8 pm. Malaysia, with its massive untapped solar resources,  is uniquely positioned to fulfil the daytime peak using solar power, while other options, such as hydropower and battery storage, can complement solar in meeting evening peak demand. In 2023, solar and hydropower collectively account for 10% of the generation share during the daytime peak, while hydro contributed 7% towards meeting the evening peak. Peninsular Malaysia''s grid can accommodate about 2.4 GW more of solar (up to 20% of grid penetration) before storage systems are essential.

With about 268 GW of indigenous solar capacity, Malaysia is well-positioned to bolster its energy security. The NETR pathway aims to utilise about 5% of this solar potential (14 GW) by 2035, leaving a significant amount of solar resources untapped. Integrating the grids of the three regions can fast-track solar growth and enhance their grid stability, allowing Sabah to strengthen its power supply security, Sarawak to access more solar during the day and Peninsular Malaysia to use hydropower during evening peaks. Developing more domestic solar will help diversify the power mix and reduce the risks of fossil fuel supply shocks.

From the beginning of the Large Scale Solar programme in 2016 until 2021, the lowest auction rates for 30-50 MW solar plants dropped by 64% from $0.082 USD per kilowatt-hour (kWh) to $0.029 USD per kWh in Peninsular Malaysia. This trend aligns with the global solar generation costs that decreased by 55%. These costs represent the price at which electricity is sold upon project commissioning, with projects from auctions held between 2016 and 2021 starting to generate electricity from 2017 to 2023. This means solar generation costs dropped to $0.029 USD per kWh by 2023, making them 53% cheaper than fossil fuel generation costs, which stood at $0.063 USD per kWh.

Malaysia’s deployment plans for battery energy storage systems (BESS) could benefit from policies integrating solar and BESS technologies. Conducting feasibility studies to analyse the economic and technical viability of BESS could be a stepping stone. Existing programmes, such as Large Scale Solar and Corporate Green Power Programme, could be further enhanced by integrating BESS technologies and offering a different tariff scheme for BESS services, broadening flexible grid development responsibilities beyond utilities to other market participants.

Mlaysia is an upper-middle-income country in Southeast Asia. It ranked third among the Association of Southeast Asian Nations (ASEAN) members in Gross Domestic Product per capita ($11,993 USD) in 2022. As the economy grows, electricity generation in the country has also shown a steep growth during the last two decades, adding 116 TWh of power generation from 2000 to 2023.

Much of the electricity generation is sourced from coal and gas. In 2023, coal and gas accounted for 43% and 37% of total generation, respectively. The renewable share in 2023 was 19.5%, and most of the generation comes from hydropower (17%, 32 TWh). Solar and bioenergy each contributed 1.7% and 0.6%.

As a parliamentary democracy with a constitutional monarchy, the Federation of Malaysia was formed following the merger of the Federation of Malaya, Singapore, North Borneo (Sabah) and Sarawak on 16 September 1963.

About Utility-scale solar malaysia

About Utility-scale solar malaysia

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