Budget 2025: Higher Allocation To Spur National Energy Transition Initiatives

By Muhammad Faizal Nazmi Mohd Haran

KUALA TERENGGANU, Oct 28 (Bernama) -- The increase in the National Energy Transition Facility Fund allocation to over RM300 million in Budget 2025, from RM100 million this year, is viewed as the right move to stimulate the implementation of larger and high-impact green energy projects.

Assoc Prof Dr Mohamad Faiz Mohd Amin from the Faculty of Earth Sciences at Universiti Malaysia Kelantan (UMK) said that the allocation adequately met the funding requirements for the continuation of Malaysian green initiatives, such as the Kenyir Hybrid Hydro Floating Solar Farm in Hulu Terengganu.

The environmental science, management, and sustainability expert said that while Malaysia has made significant progress in its energy transition, it continued to face challenges, such as ensuring a consistent transition to renewable energy across all sectors without compromising the stability of electricity supply.

“The projects under the National Energy Transition Roadmap (NETR) have now entered the implementation phase, indicating that the government is on the right track. However, the country needs ongoing fund allocation, a clear policy direction and support from the private sector for these initiatives to succeed,” he told Bernama recently.

Prime Minister Datuk Seri Anwar Ibrahim, while tabling Budget 2025 in the Dewan Rakyat, announced that over RM300 million would be allocated under the National Energy Transition Facility Fund next year to transition the energy sector towards achieving net-zero greenhouse gas emissions as early as 2050.

This includes the Kenyir Hydro Hybrid Floating Solar Farm project, which can generate up to 1,000 megawatts (MW) of solar power. Half of that capacity will be dedicated to the first green hydrogen hub project in Terengganu, a joint initiative between Petroliam Nasional Bhd (Petronas) and Tenaga Nasional Berhad (TNB).

Mohamad Faiz, who is also an invited researcher at the Water Resources Research Centre at Kyoto University, Japan, said the allocation reflected the government’s commitment to sustainable development and the importance of addressing climate change comprehensively.

“The additional allocation also shows that the government is actively pursuing the (energy transition) goals through investments in the appropriate technology.

“Achieving energy transition is no easy task, as it requires substantial investments in new technologies, infrastructure improvements, and comprehensive policy adjustments.

“Therefore, increasing this allocation will alleviate the financial burden and help tackle major challenges while accelerating technological innovation,” he said.

According to Mohamad Faiz, a well-planned energy transition could help maintain a stable energy supply, while the introduction of green technologies such as floating solar and green hydrogen would enhance the resilience of the country’s energy grid.

He stated that utilising a diverse range of energy sources would mitigate the risk of electricity supply interruptions stemming from reliance on a single source, especially amid the ongoing global energy crisis involving coal and gas, which was placing significant pressure on fossil fuel-dependent countries.

Meanwhile, Assoc Prof Dr Tunku Muhammad Nizar Tunku Mansur, a renewable energy expert, said that the 1,000 MW capacity of the second floating solar farm in Malaysia was substantial and had the potential to meet high electricity demand.

The deputy director at the Centre of Sustainable Campus and Energy Management (COSCEM) at Universiti Malaysia Perlis (UniMAP) said that the facility was expected to support between 200,000 and 300,000 households, depending on their electricity consumption.

“It will definitely enhance electricity generation capacity through environmentally friendly methods, as it does not produce greenhouse gases, thus supporting the goal of achieving net zero emissions by 2050.

“Electricity generation in Malaysia is still largely dominated by fossil fuels, especially natural gas and coal, resulting in considerable greenhouse gas emissions and environmental pollution,” he said.

-- BERNAMA