Energy Security in Malaysia

Malaysia, once a net energy exporter, now faces increasing challenges in maintaining energy security within its complex energy system, despite being a key regional producer.

Coal use has grown to meet rising energy demand. Declining energy resources and higher consumption have increased vulnerabilities across various energy systems.

 

What is energy security (Definition)?

Energy security means having a stable energy supply to meet the needs of people’s lives. It ensures energy is available, accessible, affordable, and sustainable for their daily activities.

 

Components of Energy Security

• Available: Ensuring there is enough supply to meet demand. Malaysia’s domestic oil and gas reserves are declining, raising concern about future supply.
• Accessible: Energy must reach all sectors. Import reliance on coal creates risks if global supply chains are disrupted.
• Affordable: Energy costs should remain stable. Rising dependence on imported coal makes Malaysia vulnerable to price swings.
• Sustainable: Energy production should not harm the environment. Malaysia is pushing for more renewable energy through solar, hydropower, and bioenergy to meet long-term climate goals.
   

Malaysia’s Power Sources

Power Source	Share of Electricity Supply
Coal	46%
Natural Gas	47%
Oil	2%
Hydropower	3%
Solar & Bioenergy	2%

 

Risks and Challenges to Energy Security

• Fuel Price Swings: Malaysia imports both coal and oil, which makes the cost of electricity generation highly dependent on global market prices. When these prices rise, electricity becomes more expensive to produce. For example, recent world events have pushed energy prices up by as much as 36% in some regions, creating challenges for industries to plan and manage their budgets effectively.
• Supply Disruptions: Issues such as trade differences with nations that provide energy to Malaysia may halt the arrival of fuel.
• Dependence on Imports: Malaysia depends on other countries to meet its coal and oil demand. Any problem faced by those countries will ultimately affect the supply of Malaysia.
• Old Infrastructure: The power grid in Malaysia is outdated, and it is not properly prepared to handle alternative sources of energy. This may result in loss of power or delays in the transmission of power to different industries.

 

Advantages of Strengthening Energy Security

• Stable Economy: Consistent energy keeps the factories operating and prices stable.
• Getting the Investment on Board: Inexpensive energy means that Malaysia is a good place to start up businesses.
• Assistance to the Environment: Consumption of other sources of energy reduces pollution, which aligns with the Malaysian target of achieving a decrease in carbon emissions by 45% by 2030.
• Dealing with Risks: The best way to reduce the impact of global price fluctuations is to diversify energy sources instead of relying too heavily on one type. By doing so, Malaysia can improve energy security for the long term.

 

Energy Security and Climate Change

Securing stable energy while cutting emissions is a key challenge. As nations shift to renewables, they must ensure reliable power without undermining climate goals.

Investing in green technology, improving energy efficiency, and diversifying energy sources are key strategies. Balancing these national energy policies is vital for sustainable development.

National Energy Transition Roadmap (NETR) outlines Malaysia's plan to use natural gas as a transitional fuel while increasing renewables to 70% and achieve net-zero carbon by 2050.

 

Renewable Energy and Security

Malaysia has significant potential to meet its future energy needs through renewable energy sources. The advantages of renewables are undeniable:

• Less Need for Imports: Local energy sources reduce reliance on risky global markets.
• Steady Costs: Renewables have predictable prices, unlike oil or gas.
• Better for the Planet: They cut pollution, helping Malaysia’s climate goals.

Since 2021, Malaysia has allowed renewable energy exports, which has brought more investment in clean energy and contributed to the growth of its energy sector.

 

Energy Security Strategy by Ajinomoto Malaysia

Ajinomoto (M) Berhad (AMB) is adopting renewable energy solutions to reduce its reliance on fossil fuels and support decarbonisation efforts. Key initiatives:

• Renewable Energy Integration: A feasibility study is underway to explore Battery Energy Storage Systems (BESS), electric boilers, and pre-heat systems. These solutions aim to improve renewable energy integration, optimise hot water usage, and lower emissions.
• Hydropower and Renewable Energy Procurement: AMB procured 5,000 Renewable Energy Certificates (RECs) from the Murum Hydropower Plant. This offsets part of its grid electricity uses with certified hydropower.
• Solar Power Generation: AMB generates clean energy in-house through a solar photovoltaic (PV) system at its Bandar Enstek plant. The system produces approximately 4,440 MWh annually, meeting 27% of the plant’s electricity needs.
• Transition to Cleaner Fuels: A shift from fuel oil and LPG to natural gas has made natural gas the primary energy source for processes like spray drying. Diesel and petrol are used for logistics and operations.
• Energy Consumption Breakdown: Total energy consumption was 129,516 GJ, sourced from natural gas 44%, purchased electricity 34%, and solar panel power 12%.

This balanced energy strategy reflects AMB’s commitment to environmental goals, green building certification aspirations, and reduced dependence on fossil fuels.