New Malaysian Initiative Allows Businesses to Purchase On-Grid Renewables from Developers

Malaysia's Energy Commission, PETRA, has introduced a regulatory framework for its Corporate Renewable Energy Supply Scheme (CRESS), which officially opened on September 20. This program allows businesses to purchase green electricity directly from renewable energy developers through the national electricity grid, a concept first announced in July.

CRESS includes detailed guidelines outlining eligibility criteria for both companies seeking to buy electricity and developers looking to sell it. Developers must register their projects and declare their energy output, which must match the maximum amount they are selling. They are allowed to serve multiple companies, while businesses can source green electricity from multiple developers, subject to a maximum capacity set by the local Electricity Utility Company (EUC).

The EUC will ensure that both developers and companies are connected to the grid and will manage the billing process, which will be conducted monthly based on meter readings.

This initiative marks a significant shift away from traditional long-term power purchase agreements (PPAs) in Malaysia, building on previous government incentives like the Corporate Green Power Programme, which facilitated virtual PPAs between businesses and renewable developers.

PETRA estimates that CRESS could attract over MYR 10 billion in direct investments and create nearly 14,000 jobs in the sustainable energy sector. The ministry is confident that this program will serve as a catalyst for achieving energy transition goals and developing the electricity supply sector.

Malaysia aims to increase the share of renewable energy in its electricity mix to 40% by 2035 and 70% by 2050.