KUALA LUMPUR: The government plans to allocate RM2 billion as seed funding for the National Energy Transition Facility (NETF), according to Datuk Seri Anwar Ibrahim. Speaking at the launch of Phase 2 of the National Energy Transition Roadmap (NETR), the Prime Minister emphasized the importance of this allocation due to the current state of Malaysia’s decarbonisation technologies. Anwar stated that the country’s progress in energy transition relies heavily on alternative energy sources and strong collaboration at the regional and international levels.
Anwar highlighted that financing is a crucial challenge in energy transition, estimating that an investment of at least RM1.2 trillion will be needed between 2023 and 2050 to enable responsible energy transition. For this decade alone, the government requires between RM60 billion and RM90 billion to be allocated for vital projects including the expansion of public transportation, strengthening grid infrastructure, and reskilling of human capital. With this in mind, the government plans to allocate RM2 billion as seed funding for the NETF.
Anwar explained that the NETF will enable catalytic blended finance to ensure a smooth flow of financial resources towards energy transition projects that may have lower market returns. Examples of such projects include investment in the electric vehicle (EV) value chain, hydrogen technologies, and carbon capture, utilization, and storage (CCUS) technologies.
To ensure comprehensive energy planning and policy development, Anwar announced the activation of the National Energy Council, which will monitor the progress of the NETR. In May of this year, the government set a target to achieve 70% renewable energy installed capacity by 2050 and lifted the ban on cross-border trade in renewable energy.
Anwar also revealed plans to establish a renewable energy exchange, which will launch in 2024 and act as a market aggregator, enabling price discovery and monetizing excess power. He acknowledged that the world has long been dependent on carbon-based fuels, leading to exponential carbon emissions and a global climate crisis. Malaysia recognizes the importance of renewable energy sources, despite its vibrant oil and gas industry.
In the early 1990s, renewable energy was classified as the fifth fuel under the National Energy Policy, with sources including solar, mini-hydro, biomass, and biogas. Anwar stated that Malaysia’s renewable energy supply currently stands at 25%, and the country aims to source 31% of its power capacity from renewables by 2025 and 40% by 2040.
Anwar explained that electricity and heat generation from burning fossil fuels contribute significantly to greenhouse gas emissions and climate change. He highlighted the opportunities that clean energy transitions present across the supply chain, from solar panels and electric vehicle charging facilities to battery energy storage and other technologies. Anwar believes that these developments provide impetus for restructuring the economy and boosting investment opportunities in green growth.
The NETR will play a crucial role in shaping Malaysia as a leader in energy transition among Asian economies, while also providing policy clarity, according to Anwar.
Credit: The Star : News Feed
