Solar power offers Malaysia a cheaper path to energy independence

By Koon Yew Yin 

All politicians must read this article and take immediate action to improve our economy.

Malaysia operates multiple fossil fuel power plants, including coal-fired power plants and various gas-fired facilities across the peninsula and Sabah.

Numbers can vary and some plants may be retired or in development. Recent reports indicate there are 25 operational coal units in the country, with no new ones in the pipeline under the National Energy Transition Roadmap (NETR).

Fossil fuel power plants in Malaysia

• Coal-fired plants: The TZ-CAT Malaysia study identified 25 operational coal units, representing the total on-grid coal generation capacity. While some older facilities have been scheduled for early closure, these plants remain a part of the energy mix.
• Gas-fired plants: Gas-fired power plants represent a significant portion of Malaysia’s installed capacity, with 42% of the total coming from this source as of 2022, according to a Bloomberg report.

Solar electricity cheaper

Solar electricity has become significantly cheaper than new fossil fuel-based electricity. Some reports have found solar generation 41% cheaper globally and 53% cheaper in the Malaysian peninsula in 2023.

This cost-effectiveness stems from rapid, continuous cost reductions in solar technology, making it the most economical option for new power generation.

Cost comparison

According to recent UN reports and other sources, new solar photovoltaic (PV) is now significantly cheaper than new coal and gas plants in most major markets. Costs have fallen by 80–90% per decade since 1960, according to the Planet Ark Environmental Foundation.

In the peninsula: A report from ember-energy.org found that solar generation costs were 53% lower than fossil fuel options in 2023, with a cost of $0.029/kWh for solar compared to $0.063/kWh for fossil fuels.

Declining costs: Solar PV costs have dropped dramatically over the decades due to technological advancements and economies of scale.

Fuel cost volatility: Unlike the volatile costs of fossil fuels, solar energy’s generation costs remain stable with long-term downward trends.

Energy storage: Battery costs have also fallen significantly. This makes it more practical to store solar energy for use when the sun is not shining.

Oil reserves in Malaysia

Malaysia holds 3.6 billion barrels of proven oil reserves in the world as of 2016, ranking 28^th globally. This accounts for about 0.22% of the world’s total oil reserves of 1.65 trillion barrels.

Malaysia has proven reserves equivalent to 13.9 times its annual consumption levels. Without net exports, there would be about 14 years of oil left at current consumption levels and excluding unproven reserves.

My proposal

Malaysia enjoys sunshine every day. Solar electricity is much cheaper than fossil fuel electricity. So Malaysia must replace all its coal and fossil fuel power plants with solar electricity to save money.

Crude oil prices have plunged from $116 per barrel to US$66.50 in recent years. This shows that renewable energy is replacing fossil fuel energy rapidly. As a result, crude oil price will continue to drop.

Malaysia must take advantage of the situation. The country must quickly increase production of solar electricity so it can boost crude oil exports to earn more money to improve the economy before crude oil price drops further. Moreover, Malaysia can also reduce air pollution.

Koon Yew Yin is a co-founder of three leading construction and property development companies in Malaysia and is now a full-time investor.

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

AGENDA RAKYAT - Lima perkara utama

1. Tegakkan maruah serta kualiti kehidupan rakyat
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