“Energy transition is not only an environmental imperative, but an economic necessity and a strategic priority”

Energy transition has emerged as a key global priority. The rise in energy demand has underscored the need to ensure efficiency, affordability and security across the energy sector. At the same time, the transition is envisioned to create new opportunities and support inclusive growth. At the Energy Transition Conference 2026, YAB Datuk Amar Haji Fadillah bin Haji Yusof, Deputy Prime Minister and Minister of Energy Transition and Water Transformation, Malaysia, highlighted the country’s efforts to advance energy transition and its key focus areas. Edited excerpts…

Push for global energy transition

The global energy landscape is experiencing an unprecedented transformation. Electricity demand is approaching historically high levels in some markets. At the same time, efforts to deliver the supply for this demand are constrained by cost and climate change considerations. In terms of supply, many of the resources relied upon today are finite and limited. As per widely cited estimates, proven oil reserves may last roughly around 50 years, natural gas for around 50 years and coal for approximately 130 years at current production rates. These figures present a stark reminder that even as energy demand continues to rise, fossil fuel resources remain finite. The question, therefore, extends beyond how long fuels would last to effective and fair management of the transition towards a more sustainable energy system.

Furthermore, the ongoing geopolitical situation in West Asia and the resulting global energy volatility serve as a wake-up call on the urgent need to reduce the reliance on conventional resources and accelerate the transition towards a more secure, resilient and sustainable energy future.

Malaysia’s energy transition

Malaysia’s energy transition is guided by a clear set of national priorities. While the country has long benefited from an institutionalised oil and gas industry, the strategic importance of diversifying its energy mix has been recognised early on. As early as the 1990s, renewable energy was introduced as the “fifth fuel” under the National Energy Policy, alongside oil, gas, coal and hydropower. Malaysia’s renewable energy portfolio now comprises solar, small hydro, biomass  and biogas, with solar emerging as the fastest growing segment. The country continues to be committed to scaling the share of renewables in its energy mix, guided by the National Energy Transition Roadmap (NETR).

Further, the Ministry of Energy Transition and Water Transformation (PETRA) launched the 2026-2030 PETRA Strategic Plan to accelerate the country’s energy transition and water transformation, guided by the NETR and the country’s broader goal of achieving net zero emissions as early as 2050. The five-year plan features 119 programmes and initiatives with 133 measurable targets that prioritise grid upgrades, digitalisation across the energy sector and demand-side management to ensure a more efficient and responsive system.

The objective is to build a more resilient and future-ready system that supports economic growth while advancing climate commitments. This transition will require an ecosystem that enables both public and private sectors to collaborate with confidence and accelerate the transition at scale.

Strengthening and modernising grids for energy security

Malaysia, through Tenaga Nasional Berhad, is set to invest RM 43 billion or $10.8 billion domestically from 2025 until 2027 to upgrade and strengthen the grid system, including the integration of artificial intelligence (AI). This is aimed to accelerate renewable energy initiatives and advance energy transition aspirations.

Across Southeast Asia (SEA), electricity demand is projected to grow by approximately 4 to 5 per cent annually over the coming decade, driven by industrialisation, urbanisation and new sources of demand such as digital infrastructure, electric vehicles, cooling demand and AI data centres.

As economies become increasingly digital and electrified, energy systems around the world will face growing pressure to deliver reliable, secure and sustainable power at scale. This presents both challenges and opportunities. As the Association of Southeast Asian Nations’ (ASEAN) digital economy continues to expand rapidly, the energy industry must modernise grid and transmission networks, strengthen interconnectivity, and develop energy storage solutions that can support greater system flexibility, stability and resilience.

In this regard, the ASEAN Power Grid initiative stands as a strong testament to how ASEAN member states can work collectively to advance cross-border electricity trade, strengthen regional energy security and support a more resilient energy future for the region.

Focus on nation-building

The energy transition extends well beyond technology, infrastructure and markets; it is about nation-building. Every major milestone in Malaysia’s development, from rural electrification and industrialisation to digital transformation, has been enabled by sustained investment in people and institutions apart from infrastructure alone. The energy transition must also be approached in the same spirit. Beyond a technological shift, the well-being and prosperity of the people form the core. For Malaysia and ASEAN, energy transition is not only an environmental imperative, but an economic necessity and a strategic priority. The choices made today will determine the competitiveness of industries and the well-being of the people for millennia to come.

Looking ahead

The investment momentum in clean energy globally continues to accelerate as countries intensify decarbonisation efforts and strengthen energy security. For SEA, sustained investment and stronger regional collaboration will be essential to support long-term economic growth and achieve energy transition ambitions. The region is well positioned to capture a meaningful share of this capital, provided that the core fundamentals valued by investors continue to be met. In Malaysia, the government clearly communicates on what investors require for long-term visibility. The focus must now be on disciplined execution and dedication from partners to translate this vision into outcomes.

Moreover, while governments play a critical role in setting direction, the private sector brings in capital, technology and the operational expertise needed to scale solutions. Looking ahead, Malaysia looks for deeper collaborations across the entire value chain. Partnerships between government agencies, utilities, developers and financial institutions will unlock new opportunities and catalyse the energy transition at scale. An adaptive and forward-looking approach is essential to ensure that capabilities evolve alongside emerging developments, and that these changes may augment and improve the quality of life.

Looking ahead, the energy transition must not only be sustainable, but just, inclusive and equitable. It must create opportunities for businesses, strengthen communities and improve livelihoods. Ultimately, energy transition is not simply about changing the way power is generated, but about empowering a better future. Every policy designed, investment made and partnership forged must serve a higher purpose, which is to build a stronger, fairer and more sustainable country for generations to come.