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Malaysia will launch CRESS program in September, allowing third parties to access the power grid without going through the state-owned company, TNB. (Photo: TNB)
Malaysia's electricity market is gradually moving toward liberalization, with the Corporate Renewable Energy Supply Scheme (CRESS) expected to launch in September. This initiative will allow third parties to use the existing grid, making it easier for corporate users to access green energy and enabling them to negotiate directly with power producers, bypassing the national energy company, Tenaga Nasional Bhd (TNB).
Malaysia opens the grid to third parties, cost details not disclosed
Under the CRESS framework, eligible corporate users can obtain green energy through the existing supply system after reaching an agreement with a third-party supplier. The system costs associated with the transmission and sale of electricity through the grid will be fixed amounts paid by the suppliers.
The Ministry of Energy Transition and Water Transformation (PETRA) stated that the scheme primarily targets newly established renewable energy plants, especially those capable of providing stable power. In contrast, plants that cannot ensure stable supply will incur higher grid usage fees, although specific amounts were not disclosed.
For users, the new scheme applies to new commercial and industrial users using medium to high voltage electricity, while existing users can only seek third-party suppliers if they have additional electricity needs.
CRESS primarily targets newly established renewable energy plants. (Photo: iStock)
Experts back initiative, anticipating benefits for green energy supply chain
Analysts are generally optimistic about the government’s new initiative. Neoh Jia Man, a fund manager at Tradeview Capital, believes that opening the TNB-controlled grid to third parties through CRESS will have a positive impact on Malaysia's energy sector. "It will lower the entry barriers for renewable energy generation and help achieve the national goal of having renewable energy contribute 40% by 2035," he said.
RHB Research stated that CRESS not only represents a critical step toward a free and competitive market reform but also provides independent power producers with an opportunity to sell electricity to new customers after their existing power purchase agreements expire. Furthermore, suppliers related to renewable energy infrastructure will also benefit.
Currently, Malaysian companies fulfill their green energy commitments through various methods, including encouraging the installation of solar systems via the Net Energy Metering (NEM) and Self-Consumption (SelCo) programs, purchasing renewable energy certificates through the Malaysia Green Attribute Tracking System (mGATS), participating in the Green Electricity Tariff (GET) program, or reducing carbon footprints through the Corporate Green Power Programme (CGPP) via Virtual Power Purchase Agreements (VPPA).
