Minister of Natural Resources, Environment and Climate Change, Nik Nazmi Nik Ahmad, has revealed that detailed discussions have taken place between the Malaysian government and Singapore regulators regarding electricity exports to Singapore. The discussions included the Ministry of Natural Resources, Environment and Climate Change, the Energy Commission, the Energy Market Authority of Singapore, and industry players. A paper on energy exchange will be presented to the Cabinet in October. Nik Nazmi confirmed that discussions have been ongoing at the prime minister level and between himself and his Singaporean counterpart.
Singapore’s Energy Market Authority (EMA) is currently seeking to appoint licensed electricity importers with a deadline of the end of 2023 for its request for proposal. The country has been initiating pilots with Indonesia and Laos to import low-carbon electricity. Malaysia lifted the ban on electricity exports to Singapore this year, but the framework for exports has yet to be finalized. Sarawak in East Malaysia has expressed interest in exporting its hydro-power generation to Singapore, including through direct transmission via an undersea cable.
Nik Nazmi emphasized that the mechanism for electricity exports must take advantage of the opportunities in Singapore, stimulate the growth of the local renewable energy (RE) industry, and provide benefits to Malaysia. However, concerns have been raised about the potential costs of grid upgrades falling on normal consumers, leading to higher tariffs that could be particularly burdensome for lower-income groups. Nik Nazmi cited examples of multinational companies like Amazon and Google that would be willing to pay more for renewable energy.
The progress of RE capacity generation in Malaysia extends beyond solar to include biomass and mini hydro, particularly in Peninsular Malaysia. However, conflicts with state governments have posed challenges to the rollout of mini hydro projects. The government is also considering launching a request for proposal for early retirement of coal plants and exploring the practice of “mothballing,” which would allow coal plants to operate at a minimum scale for increased capacity utilization when required.