Analysts see bright prospects for Malaysia's renewable energy

Kuala Lumpur, Jan 3 (IANS) Malaysia's renewable energy sector is poised for robust growth, driven by government initiatives and forthcoming investments, analysts said.

In its recent report, Philip Capital reaffirmed its positive outlook on Malaysia's renewable energy sector, citing continued government initiatives and potential new investments.

The research house highlighted the upcoming Large Scale Solar (LSS5) projects, with a 2GW capacity, generating 7 billion ringgit (1.56 billion US dollars) in engineering, procurement, construction, and commissioning (EPCC) opportunities.

The recent expansion of rooftop solar capacity is also expected to fuel contract opportunities for solar EPCC companies. Philip Capital projects sector earnings to grow by 63 per cent in 2025, driven by the Corporate Green Power Program (CGPP) and Net Energy Metering 3.0 (NEM 3.0).

Looking ahead, momentum from national energy transition initiatives and contract awards is expected to sustain strong sector interest, the research house noted.

Meanwhile, Maybank Investment Bank said in its recent report that it remains optimistic about Malaysia's renewable energy sector, citing robust earnings visibility from ongoing and upcoming projects, Xinhua news agency reported.

It expects earnings recognition from the CGPP projects, slated for completion by end-2025, to support sector growth. The anticipated LSS5 projects will further bolster order books and sustain strong growth beyond 2025.

Maybank also highlighted the National Energy Transition Roadmap (NETR) as a key driver for renewable energy development in 2025.

Additionally, progress on Malaysia's first utility-scale Battery Energy Storage System (BESS) is expected, with a planned 400MWh capacity. These initiatives reinforce the sector's growth trajectory and its role in Malaysia's energy transition.

Hong Leong Investment Bank Research also said in its recent report that it is optimistic about Malaysia's energy transition, supported by the burgeoning data center industry and long-term renewable energy goals.

It highlighted the NETR's target of 70 per cent renewable energy capacity by 2050, requiring 637 billion ringgit in investments or 24.5 billion ringgit annually starting in 2024.

Hong Leong emphasised the critical need to align renewable energy development with the growing energy demand from data centers. To support the data centre boom, it is estimated that 35GW to 40GW of renewable energy capacity, primarily solar, will be necessary.

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