Recently, Malaysia’s national utility power provider Tenaga Nasional Berhad (TNB) and the Government of Malaysia’s Economic Planning Unit, Prime Minister’s Department (EPU) organised a seminar on the Sustainable Development Goal (SDG) 7, with the aim of mobilising cross-sharing and collaboration amongst industry influencers, as the entire nation inches closer toward its 2050 net-zero targets.

“When we look at decarbonising the system, the power generation, and the grid, we’re talking about a gradual process, whereby new investments can be done at the right timing, in terms of pricing, so that the impact of overall systems are mitigated,” stressed TNB’s Chief Strategy and Ventures Officer Datuk Fazlur Rahman Zainuddin.

The SDG 7, which guides nations to “ensure access to affordable, reliable, sustainable and modern energy for all”, is an aspirational framework that accompanies the more stringent Paris Agreement accords. In Malaysia, both international instruments are reflected in the nation’s ambitious goal of achieving 40% renewables by 2035, detailed in the Malaysian Renewable Energy Roadmap.

Several sectoral solutions, including residential solar rooftop panels and electric vehicles (EVs) were discussed at the panel session. Longstanding challenges, such as financing and the issue of affordability, were also debated.

“In order to reach the 100% (reduction target) of our net zero emissions as early as 2050, there will be a stage where you will have to pay higher energy costs before the pricing is stabilised. This is what we saw with solar panels at first. When solar panels were launched 20 years ago, the cost was so high that no one wanted to install them, but now they are so cheap,” said Gan Pek Chuan, Head of Sustainable and Resilient Development, UNDP Country Office for Malaysia, Singapore and Brunei.

The challenges associated with higher prices would not only affect consumers, but economic sectors as well. Being an export-driven country, Steven Thangaraju, Council Member, Federation of Malaysian Manufacturers (FMM), also highlighted how higher energy prices would not bode well for the country’s competitiveness.

“If there are higher energy costs caused by the transition to cleaner energy, it will be a challenge for manufacturers, because we consume about 40% of the total energy in this country, more or less at that rate. So energy has a very direct impact on the costs,” he said.

This clear thread between energy and the economy was echoed by the Minister in the Prime Minister’s Department (Economy). In his keynote address, Dato’ Sri Mustapa bin Mohamed, emphasised the role of energy as a critical engine for growth, stating how energy is intimately connected to the industrial, commercial, and family life of the country.

“The current challenge facing the energy sector is to make affordable and clean energy accessible to all and to shift away from a heavy reliance on fossil fuels. This aspiration warrants a whole of nation approach, especially with stakeholders in the energy sector. There’s a need to have policies and regulations in place in order to make the most out of this transition to a cleaner energy regime,” said Dato’ Sri Mustapa.

The current challenge facing the energy sector is to make affordable and clean energy accessible to all and to shift away from a heavy reliance on fossil fuels

It’s crucial to note that on 19th of September 2022, the Government of Malaysia will be launching a new National Energy Policy 2022-2040 that will strategise how the next two decades will deliver on the nation’s energy goals. The policy, which pivots strongly on economic priorities, will be led by the Government’s Economic Planning Unit (EPU) and aims to boost investment into the country.

Echoing the Minister’s sentiment, Syed Malek Faisal, Head of Business Development, Renewable Energy at GENTARI, a clean energy solutions entity under PETRONAS, further elaborated on the importance of steering a shared vision.

“Moving towards this is all about collaboration and partnership. Even PETRONAS alone, we won’t be able to do it by ourselves. We must involve various stakeholders and government regarding policies, industry partners, customers, and so on because this new business is very dynamic. You must be agile in this. And I think the need to collaborate with various partners is important in this case,” said Syed.

Just a few months ago, TNB announced its latest progress under its Sustainability Pathway toward 2050, which included a heightened focus on leveraging technology partnerships. To achieve its net-zero emissions targets by 2050, the utility giant has plans to partner with ecosystem players and researchers to develop clean energy solutions in existing and emerging greentech spaces, including green hydrogen, energy storage, and green mobility areas.

“Green hydrogen is one of those technologies that we’re looking at. If you look at the cost today, the current costs compared to what we are paying for coal and gas is probably three times more. So as of today, hydrogen is a bit more expensive than the usual coal and gas. But as we go forward, as we look ahead to 2050, these prices could reach a certain level of close parity law,” said Datuk Fazlur.

It is recognised that the journey toward sustainability is not without trade-offs

It is recognised that the journey toward sustainability is not without trade-offs. While SDG7 continues to heavily influence national and corporate agendas, challenges remain on various fronts, including shifting consumer mindsets and tackling funding gaps. To move forward, Malaysia’s transition must be crafted after our own unique model, and must involve the entire ecosystem to unlock true value under a shared, sustainable future.