This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/23/2019

Overview

Energy is often viewed as a critical sector of growth, and for Malaysia this sector has accounted for approximately 20 percent of the country’s total gross domestic product.  The government acknowledges the fact that energy demand will increase as Malaysia steps closer to meeting its goal of becoming an upper income nation.  From being a low-cost supplierduring the early stages of Malaysia’s economic growth, the government has put into place, as early as 1979, the National Energy Policy which calls for a more cost-effective, secure and efficient utilization of energy that is at the same time environmentally friendly. 

The majority of the Malaysia’s electricity generation comes from thermal sources with 54 percent of total generation coming from gas-fired plants.  However there are plans to increase output capacities from hydro, biomass, biogas, and solar PV to 13.1 percent (~5190MW) of total installed capacity by 2020.

93.4 percent of the population has access to electricity, but there is only 88.8 percent penetration in rural areas and this is lower in Sabah and Sarawak in East Malaysia. (World Bank 2017).  Malaysia has a well-developed grid network with relatively low distribution losses in Peninsula Malaysia.  Under the 11th Malaysia Plan, the Government is placing more emphasis in the development of both Sabah and Sarawak.  With the increase in economic activities and the development of new industrial areas, power demand will increase in tandem. 

The strategies formulated for encouraging sustainable energy usage to support growth during the 11th Malaysian Plan (2016-2020) are:

  • Strengthening stakeholders coordination and collaboration in the energy sector

  • Ensuring the security of supply and reliability of the Oil & Gas sub-sector within a market-based approach

  • Enabling the growth of the Oil & Gas sub-sector

  • Managing supply diversity for security of electricity sub-sector

  • Improving the sustainability, efficiency amd reliability of the electricity sub-sector

While trying to maintain the security and reliability of fossil energy resources, the government is also looking at pursuing green resources for sustainability and resilience of the sector.

The plan is to grow the following renewable energy to an estimated installed capacity of 2,080 MW by 2020:

  1. Biomass                                  38%

  2. Mini-hydro                 24%

  3. Solid waste                  17%

  4. Biogas                         12%

  5. Solar Photovoltaic       9%

  Other initiatives implemented to encourage the optimize and efficient use of energy are:

  • Encouraging the construction of Energy Efficient buildings in accordance to the Green Building Index

  • Installation of Smart Meters in residential and commercial buildings

  • Promotion of Minimum Energy Performance Standards (MEPS) for domestic electrical appliances  

Energy Equipment

The chart below showcases the Malaysian and U.S. trade statistics only for the following HS codes:  HS 8402 (Steam or other vapor generating boilers), 8404(auxiliary plant for us with boilers), 840681(Turbines, Steam And Other Vapor Types, Of An Output Exceeding 40 Mw, Except For Marine Propulsion, 840682 (Turbines, Steam And Other Vapor Types, Of An Output Not Exceeding 40 Mw, Except For Marine Propulsion), 841311 (,Pumps For Dispensing Fuel Or Lubricants, Of A Type Used In Filling-Stations Or Garages), 841319 (Pumps Fitted Or Designed To Be Fitted With A Measuring Devise, Nesoi).
Note that this table does not include any values attributed trade of services.

Unit: $US millions 

2015

2016

2017

2018

CAGR (%)

 Total Import

    193

    222

    170

    109

-17.3%

 Total Export

      88

      74

      63

      68

-8.2%

 Import from USA

      12

         10

         6

         6

-20.6%

 Export to USA

         1

         3

         1

         1

0.0%

Exchange Rates

3.91

4.15

4.30

4.03

 

Source: Global Trade Atlas


Leading Sub-Sectors
Malaysia is concerned about a potential electricity shortage and Tenaga National Berhad (TNB) the National Electric Company, is looking for solutions to address this forecasted shortage via:

  • Increasing efficiency of existing plants 

  • Renewable fuel sources

  • Construction of new plants

  • Transmission and distribution of electricity in Sabah & Sarawak

  • Efficient usage and distribution of electricity

Opportunities

As noted, the government included the energy sector as part of the 11th Malaysian Plan 2016-2020 and these projects have been highlighted as projects currently under construction or in the planning stage.
East Malaysia’s Sabah and Sarawak are also a focus in the 11th Malaysia Plan:

  • Implementation of power-related projects under the Sabah Special projects and Delivery Unit, Sabah

  • Construction of Combined Cycle Power Plants, Sabah, ETC: 2020

  • Sarawak Corridor of Renewable Energy, Sabah

Web Resources

 

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.


More Information

Trade Development and Promotion