Executive summary
Malaysia’s energy transition, centred on the 2023 National Energy Transition Roadmap (NETR), builds on a pragmatic foundation of familiar technologies and leverages on existing national capabilities. Phasing out coal, ramping up solar and expanding regional interconnections, while maintaining a stable base of gas and hydro, provide a positive trajectory for power sector decarbonisation. However, as highlighted by the 2025 Long-Term Low Emissions Development Strategy, current measures will not be sufficient to achieve net-zero greenhouse gas emissions by 2050 and must be augmented further.
Published data on greenhouse gas inventories are imprecise estimates that are subject to measurement uncertainties, data gaps and evolving methodologies. Malaysia’s 2019 Fourth Biennial Update Report indicates an uncertainty margin of 15% for fossil fuel emissions and 20% for removals by natural carbon sinks. While the reported net-zero gap for 2019 was 115 MtCO₂e, accounting for the uncertainty factors suggests a variability of up to 80% and an upper bound of 208 MtCO₂e for emissions neutrality. Therefore, net-zero targets should be a directional aspiration rather than an absolute endpoint, with policy efforts focusing on measurable, verifiable emissions cuts rather than relying on offsets and carbon accounting.
Installed capacity values, which are typically used to describe the proportions of electricity sources, do not automatically translate to the actual amount of firm, dispatchable generation. Once intermittency and baseload capabilities are taken into account, NETR’s 2050 installed capacity projection of 58% solar is expected to generate only 30% of electricity, while 29% gas could supply 50% to the grid. While installed capacity is a key metric for power system planning, it does not provide the complete picture necessary to illustrate the adequacy of energy supply and resulting decarbonisation impacts.
Analysis of NETR’s power sector pathway for 2050 suggests that supply may be insufficient to meet projected demand growth, with estimated shortfalls between 27% to 53%. While the median scenario does reduce absolute emissions by 29% and emissions intensity of electricity by 62%, weather dependency of the system increases to 50%. In addition, 80% of generation sources would consist of those without readily available on-site energy inputs. Therefore, while decarbonisation metrics may improve, this would compromise energy security and supply adequacy.
Diversifying electricity generation sources beyond solar, hydro and gas is essential for Malaysia to ensure the right balance between reliability, equity and sustainability. Mapping energy technologies against a non-exhaustive set of key parameters – operational emissions, independence from weather and climate, on- site primary inputs, ability to provide gigawatt-scale, baseload and dispatchable supply, as well as global technology readiness – underscores the reality that no single solution can meet all the demands of the energy transition. Malaysia should consider all feasible options across multiple deployment horizons, with energy policies strategically focused on decarbonisation, economic development and national prosperity, while remaining tactically flexible and adaptive to evolving sectoral developments.
