KUALA LUMPUR, Dec. 23 (Xinhua) -- Malaysia's energy transition is set to gather pace into 2026, underpinned by aggressive renewable energy (RE) targets, expanding solar capacity and new carbon-related policies that are expected to lift demand for clean power and related infrastructure, according to research houses.
TA Research said in its recent report that it expects Malaysia's energy transition theme to sustain its momentum moving into 2026, given strong policy backing and the National Energy Transition Roadmap's aggressive 70 percent RE mix target by 2050.
This will be underpinned by the rollout of an aggregate 4GW solar project under the Large Scale Solar 5 (LSS5) and LSS5+ program. Beyond these, and as per Budget 2026, it noted the LSS6 program is expected to be rolled out next year.
In addition, TA Research highlighted that an additional 300MW feed-in-tariff quota is expected to be rolled out for the biogas/biomass and mini hydro RE sub-segments, as outlined in Budget 2026.
In the rooftop segment, it said the Solar ATAP program guidelines are expected to be launched by Dec. 31, 2025, and applications are expected to be opened from Jan. 1, 2026.
Meanwhile, TA Research opined that the introduction of a carbon tax in 2026 could artificially raise the cost of grid power and, in turn, boost demand for RE as consumers seek to minimize the impact of higher electricity costs.
Meanwhile, CGS International said that the enactment of Malaysia's Carbon Capture, Utilization, and Storage (CCUS) Act in 2025 provides a clear regulatory framework for deploying carbon mitigation technologies, opening avenues for utilities to integrate CCUS into the country's energy system.
The research house also expects the deployment of battery energy storage systems to accelerate, driven by rising RE capacity, corporate demand for firm green energy, and the need for grid flexibility.
CGS International also expects to see increased adoption of the corporate renewable energy supply scheme following the reduction in access charges in late 2025, which further narrows the cost gap between brown and green energy.
According to the research house, this improves RE competitiveness for corporates, supported by stable offtake structures and better project economics.
It also opined that utilities and developers are well positioned to capitalize on this demand-driven model, accelerating solar and broader RE rollout while diversifying revenue beyond quota-based mechanisms.
It also expects waste-to-energy and biomass projects to garner more attention in 2026, supported by the government's push to advance the Circular Economy Roadmap and growing urgency to address landfill constraints.
Nomura Research, on the other hand, highlighted in its recent report that ASEAN Power Grid could be a transformative growth driver for Malaysia's utilities sector, elevating local power players from domestic generators to regional RE exporters.
It noted that under the National Energy Transition Roadmap, Malaysia is actively positioning itself as a central hub for cross-border power trading, exemplified by the operational Lao PDR-Thailand-Malaysia-Singapore Power Integration Project. ■
