UEM Lestra powers Malaysia’s energy security race

UEM Lestra, its subsidiary Cenergi, and other GLCs are actively pursuing biogas, biomass and mini-hydro to diversify Malaysia’s renewable energy portfolio.

PETALING JAYA: With climate change and trillion-ringgit opportunities in environmentally friendly industries on the line, Malaysia is on an urgent mission to revamp its energy strategy.

“We are moving into all these aspects, not only solar but also biogas, biodiesel, and green hydrogen,” Prime Minister Anwar Ibrahim said in a recent interview with FMT. “We’re taking action aggressively and at a much faster pace.”

To build up that renewable energy prowess, Putrajaya is tapping government-linked companies (GLCs) like UEM Lestra Bhd and its subsidiary, Cenergi SEA Bhd, alongside Tenaga Nasional Bhd (TNB) and Petronas, for the job.

Whole-of-nation effort  

The National Energy Transition Roadmap (NETR) aims to secure a 70% renewable energy (RE) target by 2050, a considerable leap from the current 13.3% RE share in Malaysia’s energy mix.

“The commitment is to make sure by 2050 that net zero will be achieved, and the only way to do it is renewable energy,” deputy prime minister Fadillah Yusof told FMT, emphasising the government’s determination to reduce Malaysia’s carbon footprint and shift the nation towards cleaner energy sources.

This transition addresses both economic and environmental concerns. Malaysia’s dependence on fossil fuels, which make up over 80% of its energy consumption, has significant consequences.

By 2050, the country is projected to become a net importer of natural gas, adding to its expenses.

At the same time, the green economy presents opportunities: the shift to renewable energy could generate up to RM1.3 trillion in economic opportunities and create about 300,000 jobs by 2050.

Economic and environmental impact of renewable energy

Beyond reducing carbon emissions, Malaysia’s shift to renewable energy holds potential for economic growth.

The transition to RE opens doors to job creation across emerging sectors, such as powering smart cities, and even traditional sectors, such as manufacturing and logistics, as they become greener.

Cenergi has focused on bioenergy, particularly biogas from Malaysia’s palm oil sector. Hairol Azizi Tajudin, group CEO of Cenergi, highlighted a significant opportunity for expansion.

“Out of 450 mills, only 150 (one-third) are covered, meaning there are still 300 mills that you can develop for biogas.

“This represents not just a way to produce clean energy but also an opportunity to support rural areas and create new jobs,” he told FMT in an interview.

One of Cenergi’s biogas projects, the 5.5 MW Felcra Jayaputra plant in Jerantut, uses methane captured from palm oil waste to generate electricity for the benefit of 300,000 residents.

“If we were to look at biogas, we are actually avoiding sending methane emissions into the environment. So on top of that, we’re producing green electricity,” Hairol said, highlighting the dual benefit of reducing greenhouse gas emissions and supporting rural economies.

Key strategies and collaborative efforts  

To oversee and coordinate the RE transition, Malaysia recently established the energy transition and water transformation ministry.

UEM Lestra is making significant strides for both the environment and the economy through its one-gigawatt solar project, according to Harman Faiz Habib Muhamad, CEO of UEM Lestra, the wholly owned green industries arm of UEM Group Bhd.

“Our one-gigawatt project, for example, which we’re doing under the CRESS programme, is sizeable enough to draw in the likes of Blueleaf Energy and Hexa Renewables.

“These are big players in the region that have decided to come in and co-invest with us, bringing foreign currency into the country for investment,” Harman told FMT.

UEM Lestra and other GLCs are actively pursuing biogas, biomass, and mini-hydro to diversify Malaysia’s RE portfolio.

“It’s about combining all these sources to make a reliable energy foundation,” Harman said.

TNB, the nation’s largest electricity provider, is also advancing renewable infrastructure with projects such as floating solar farms and hydropower.

As Malaysia’s primary utility, TNB’s modernisation of the national grid is essential for effectively distributing RE across the country.

Balancing the transition: costs, trade-offs, and long-term goals

Achieving Malaysia’s RE goals requires navigating financial costs and assessing the balance between different energy sources. While solar and biogas are integral to the strategy, nuclear energy remains under consideration as a low-carbon solution.

“If you’re talking about meeting the 2050 target, nuclear has to be part of the conversation,” Hairol said, emphasising the need to consider all energy options in a comprehensive strategy.

To support the sector, the government is also reducing fossil fuel subsidies and planning to introduce a carbon tax. According to Harman, these policy changes will help make RE projects more economically viable for businesses.

“The way the government is approaching it is as an economic push where it makes sense money-wise. Businesses will come in when the money is there. At the same time, you’re helping the earth,” he said.

The path ahead: bridging the gap  

The pathway to 70% RE by 2050 depends on the efforts of companies like UEM Lestra, Cenergi, TNB, and Petronas, which are driving renewable projects while contributing to job creation, rural development, and green industry growth.

As Harman explained, the collective impact of these efforts will create a tipping point: “All these things will naturally lead to the point where the people and businesses will realise that going at the status quo is just not going to work.”

Malaysia’s renewable energy journey faces challenges, including infrastructure demands and cost management, but the expected economic and environmental benefits position the country to secure a sustainable energy future.