CRESS Crucial To Raise Re Capacity, Meet 70 Pct Target By 2050 -- Economist, Industry Players

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Aug 6 (Bernama) – An economist and industry players believe the Corporate Renewable Energy Supply Scheme (CRESS) is set to transform Malaysia’s electricity cost structure, propel significant economic benefits and accelerate its transition from fossil fuels to renewable energy (RE).

They said the scheme is “pivotal” and aligns with Malaysia’s aspiration to increase RE capacity to 70 per cent by 2050.

At the moment, the nation’s RE’s installed capacity of 25 per cent accounts for only six per cent of its total electricity generation.

Senior Fellow and Director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia, Sunway University Prof Dr Yeah Kim Leng said the scheme will complement Tenaga Nasional Bhd’s (TNB) restructuring plans to meet the 2050 targets.

“The costs of RE supplied by independent players are expected to become more competitive relative to TNB’s, the national grid operator, in line with the government’s push to increase RE share through various support, including fiscal and financial incentives,” he told Bernama.

He noted that firms purchasing green energy under CRESS might not see immediate savings on electricity costs.

“However, as independent RE plants advance in solar technology, achieve economies of scale, and enhance management efficiency, the costs are expected to become more competitive.

"The key factor is the reduction of the firm's carbon footprint to meet customers' sustainability requirements and avoid cross-border carbon taxes like the European Union’s Carbon Border Adjustment Mechanism, effective in 2026," he added.

An engineering company in green technology, Itramas Corporation Sdn Bhd said the scheme is excellent and a step forward for Malaysia and the RE industry in particular.

Its group managing director and chief executive officer (CEO) Lee Choo Boo said CRESS opens up major investments in the RE sector, which in turn is a major enabler of digital sector growth.

“The scheme makes it possible for the private sector to participate in a bigger way and thus assist the government to accelerate the growth of both green and digital economies.

“Compared to all the other initiatives to support the RE industry, CRESS is the one that will enable a rapid scaling up of the country’s generation of green energy,” he told Bernama.

RENEWABLE ENERGY INTERMITTENT

Meanwhile, Association of Water and Energy Research Malaysia president Piarapakaran S, who is also CEO of the Centre for Water and Energy Sustainability, expressed concerns about the intermittent nature of RE.

He emphasised the need for a clear outline of CRESS to ensure it does not merely repurpose existing RE plants but encourages new developments.

"Without addressing intermittency issues, there is an increased operational risk to the grid and unnecessary costs to consumers," he explained.

He also highlighted the potential burden on the grid and the importance of transparent mechanisms to manage these risks.

CRESS, announced by the Energy Transition and Water Transformation Ministry (Petra) recently, enables RE generators and eligible corporate users to directly source RE from identified providers with third-party access to the existing electricity grid participating in the new enhanced dispatch agreement market.

"At present, companies can meet their green electricity commitments by installing solar photovoltaic systems through the Net Energy Metering and Self Consumption programmes, purchasing RE certificates through the Malaysia Green Attribute Trading System, or subscribing to the green electricity tariff," it said.

On Aug 31, 2022, the government also introduced the Corporate Green Power Programme to help companies meet their ESG commitments via the virtual purchase of green electricity.

Commenting on the charges imposed on third-party access to the grid under CRESS, Yeah and Piarapakaran said it remains a critical consideration.

Both agree on the need for reasonable and transparent charges to ensure the sustainable growth of the RE sector without imposing hidden costs on consumers.

As Malaysia embarks on this ambitious journey towards a greener future, the successful implementation of CRESS will be crucial in balancing economic growth, environmental sustainability, and energy security, they said.

--- BERNAMA