Malaysia's renewable energy electricity prices cut 80%

Malaysia's renewable energy prices cut 80%

 Malaysia's renewable energy electricity prices cut 80%

Renewable energy electricity prices in Malaysia were cut by 80% starting Tuesday (July 1) as part of a green energy tariff program aimed at reducing carbon emissions.

The Ministry of Energy Transition has introduced a new version of the government's program specifically for data centers and industry, meeting sustainability targets and issuing renewable energy certificates (RECs).

Electricity costs for data centers are expected to rise by up to 15% under the new system, according to the latest global electricity sector update from the Washington-based global energy specialist Energy Platform. The Green Electricity Tariff (GET) program, which began in 2021, aims to reduce carbon emissions by supplying renewable energy electricity to customers of state-owned utility Tenaga Nasional.

Renewable Energy Electricity in Malaysia

In addition to the price reductions, the Ministry of Energy and Water Transformation (Petra) says the new changes to the cost of renewable energy electricity in Malaysia make the green electricity tariff program easier and cheaper by unifying the pricing system.

Under the revised scheme, customers participating in the program will pay a fixed electricity rate of 5 sen per kilowatt-hour for a one-year contract, 4 sen for a two-year contract, and 3 sen for a three-year contract. This represents a significant reduction from the previous scheme, under which low-voltage customers paid 10 sen per kilowatt-hour and medium- and high-voltage customers 20 sen.

In light of the new amendments, the ministry has allowed consumers to withdraw from existing subscriptions without penalty until August 31, 2025. To date, the ministry has successfully supplied more than 10.5 terawatt-hours of renewable energy electricity to 3,551 residential, commercial, and industrial consumers in Malaysia.

Through clean energy supply, all customers are issued Malaysian Renewable Energy Certificates (MRECs). Proof of the use of renewable energy in their operations is a prerequisite for assessing environmental, social, and governance (ESG) commitments and reporting carbon emissions.

Data Centers in Malaysia

The Ministry of Energy Transition has launched Greenpath, a new version of the Green Electricity Tariff (GET) program for data centers and industrial consumers. The government-owned utility company Tenaga will implement the new program, which will open for subscriptions on August 1, 2025.

The program allows tenants of residential units with collective electricity subscriptions to subscribe and obtain renewable energy certificates based on their clean electricity consumption.The company will charge a minimal administrative fee of 0.2 sen per kilowatt-hour (kWh) to cover the costs of issuing these certificates and administering the program.

Analysts expect electricity bills for Malaysian data centers to increase by up to 15% because the new program classifies their consumption as ultra-high-voltage (UHV), with the average tariff set to reach around 60 sen per kWh. According to estimates from a local bank, a facility consuming 100 megawatts would incur additional costs of RM63 million ($14.9 million) annually.

According to monitoring by the specialized Energy Platform, the clean energy research center Ember predicts that Malaysia's data center electricity demand will rise from 9 terawatt-hours in 2024 to 68 terawatt-hours in 2030, equivalent to 30% of the country's total consumption.

However, the biggest challenge is rising emissions due to Malaysia's continued reliance on coal and gas for electricity generation. Emissions from data centers are expected to rise from 5.9 to 40 million tons of carbon dioxide equivalent by 2030, the highest rate among ASEAN countries. The same center predicts that renewable energy in Malaysia will constitute 52% of the electricity mix by 2050, which is 18% less than the government target, compared to 48% for natural gas.