The government has enhanced the Corporate Renewable Energy Supply Scheme (CRESS) to boost third-party access (TPA) and green energy adoption, currently at 760MW. Key updates include:

1. Expanded Eligibility: From 1 March 2025, existing electricity consumers can participate without needing new or additional demand.

2. Fixed System Access Charge (SAC): SAC is set at 25 sen/kWh (firm output) and 45 sen/kWh (non-firm output) for three years, with a 15% cap on adjustments per regulatory period.

These enhancements aim to provide cost predictability for investors and broaden access to green electricity, supporting Malaysia's National Energy Transition Roadmap (NETR).

Green Energy Agreements on the Rise.

760MW worth of green electricity supply agreements (ESA) under CRESS account for 3% of Peninsula Malaysia’s power capacity.

Notable ESAs include:

1. 400MW from Tenaga Nasional Bhd to Bridge Data Center’s MY07 facility in Johor.

2. 360MW from UEM Lestra to ESR Group Ltd’s planned DC in Johor.

Malaysia has signed 4.7GW in ESAs with data centers as of September 2024, with 60-70% tied to hyperscalers. Analysts believe the US restrictions on AI chip exports will have minimal impact due to Malaysia’s preferred user status.

Investment Opportunities.

Analysts remain optimistic about the sector:

1. Tenaga Nasional Bhd: A key enabler of NETR, benefiting from data center growth and recurring regulated returns under RP4.

2. Malakoff Corp Bhd: Positioned to gain from the rising power demand driven by DC foreign direct investments.

With strong policy support and exciting growth prospects, the renewable energy sector presents attractive opportunities for investors.