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Malaysia sets up cross-border renewable energy exchange

  • Spanish Market: Electricity
  • 17/04/24

The Malaysian government is creating the Energy Exchange Malaysia (Enegem) to allow for cross-border "green electricity" sales to neighbouring countries, starting with pilot sales to Singapore.

The auctioning process for cross-border sales of clean electricity will begin with a 100MW pilot run utilising the existing connection between peninsular Malaysia and Singapore, announced Malaysia's Ministry of Energy Transition and Water Transformation on 15 April. The auction will be open to renewable energy bidders in Singapore that have import licences issued by Singapore's Energy Market Authority.

This pilot phase of 100MW is to "make sure that it works, and then if it does work, hopefully it can be expanded to a gigawatt level," said the chairman of the Energy Commission Malaysia Rashdan Yusof at the Atozero conference in Singapore on 17 April.

"On the demand side, there will also be an auction for suppliers of renewable energy into the exchange," said Rashdan, adding that the exchange will aggregate all the renewable energy sector participants, predominantly in the solar sector, and then provide the energy to Singapore, depending on requirements such as load factors, among other things.

Malaysia aims to catalyse the development of the Asean regional electricity grid and cross-border energy trading. There are "tremendous discussions" on future interconnections, said Rashdan. Malaysian state-owned utility TNB has signed six agreements with utility counterparts in Thailand, Vietnam and Laos, and has two feasibility studies planned with utilities in Indonesia and Singapore, he said, without providing additional details on these deals.

There is great willingness to establish this regional power grid but one of the obstacles is that "each jurisdiction has different energy pricing systems," said Rashdan. There is a significant difference in energy pricing between Singapore and Malaysia, for example, as energy is largely subsidised in Malaysia. "These subsidies, I find, will be a core impediment in terms of the free flow of electrons," he added.

"The energy exchange can level the economic and commercial playing field, so that money can flow. Once the money can flow, the electrons will flow. That's the aim of the energy exchange, to have that transparency and market-based system, without the distortion of price subsidies."

There are a number of bilateral power agreements in the region, with some even crossing multiple borders, such as the Laos-Thailand-Malaysia-Singapore Power Integration Project, which connects renewable power supplies from Laos to Singapore. But Asean countries need to scale up to multilateral power trading to fully benefit from regional grid interconnectivity. Regional grid optimisation in Asean could cut the net present cost of full decarbonisation by 11pc from $7.2 trillion to $6.5 trillion, according to international classification society DNV's Asia-Pacific regional director for energy systems Brice Le Gallo last year.


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18/02/25

Japan approves new energy mix target, climate plans

Japan approves new energy mix target, climate plans

Tokyo, 18 February (Argus) — Japan has approved its targeted power mix portfolio for the April 2040-March 2041 fiscal year, as well as its new greenhouse gas (GHG) emissions reduction goal, it announced today. The new power mix goal, the centrepiece of the country's Strategic Energy Plan (SEP), is in line with Japan's aim to reduce GHG emissions by 73pc by 2040-41 compared to 2013-14 levels. Tokyo plans to submit the 2040-41 emission target, as well as a 60pc emissions reduction goal for 2035-36, to the UN climate body the UNFCCC on 18 February as the country's nationally determined contribution (NDC). The country has not made major changes to its draft proposal that it unveiled in December. The new SEP sees renewable energy making up 40-50pc of the country's power generation in 2040-41, up from 22.9pc in 2023-24. The share of thermal power will fall to around 30-40pc from 68.6pc, while that of nuclear will increase to around 20pc from 8.5pc during the same period. The 2040-41 target is based on Japanese power demand of 1,100-1,200 TWh, which is higher by 12-22pc from 2023-24. The government has planned the power portfolio so that it is not heavily dependent on one specific power source or fuel type, the country's minister for trade and industry (Meti) Yoji Muto said on 18 February, although the new plan suggests making maximum use of low-carbon power supply sources. Public consultation over 27 December-26 January revealed that some think Japan should slow or even stop the decarbonisation process, given the US government's reversal of its climate policies, including its withdrawal from the Paris climate agreement, said Meti. But global commitment to decarbonisation will remain unchanged, said Muto, adding that Japan will lose its industrial competitiveness if the country delays green transformation efforts. But US president Donald Trump's "drill, baby, drill" policy has prompted the Japanese government to delete a segment from the draft SEP that had initially proposed bilateral co-operation through Tokyo's green transformation strategy and the US' Inflation Reduction Act. Despite Tokyo's decarbonisation goals, the new SEP assumes that fossil fuels, including natural gas, oil and coal, will still account for over 50pc of primary energy demand in 2040-41 in all of its scenarios — although this is down from 93pc in 2013-14 and 83pc in 2022-23. The scenarios vary based on the degree of uptake of renewables, hydrogen and its derivatives, and carbon capture and storage (CCS) technologies, to fulfil the 73pc emission reduction goal by 2040-41. Worst-case scenario Tokyo also has also set out a potential worst-case scenario, assuming slower development of clean technologies, in which fossil fuels would still account for 67pc of primary energy supply in 2040-41. Under this scenario, which assumes Japan will only reduce its GHG emissions by around 61pc by 2040-41, natural gas is estimated to account for about 26pc, or 74mn t, of Japan's primary energy supply, which is higher than the 53mn-61mn t in the base scenarios that are formulated in accordance to the 73pc emissions reduction target. Japan would need to address the potential 21mn t gap in gas demand, which will mostly be met by LNG imports, in 2040-41, depending on the development of clean technologies. The gap is equivalent to 32pc of the country's LNG imports of 65.9mn t in 2024. When asked by Argus whether the government will continue to try securing LNG to ensure energy supply security when considering the worst-case scenario, a Meti official said Tokyo should continue pursuing its 73pc GHG reduction target, but it is necessary to consider the potential risks for each individual policy and the measures that need to be taken, instead of making decisions based on the worst-case scenario. The new SEP has highlighted the role of LNG in the country's energy transition and the necessity to secure long-term supplies of the fuel. It is unclear what ratio gas-fired capacity will account for in Japan's 2040-41 power mix, as the SEP does not include a breakdown of thermal generation. But gas-fed output is expected to take up the majority share, given that gas has already outpaced coal in power generation and Tokyo has pledged to phase out inefficient coal-fired plants by 2030. By Motoko Hasegawa and Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Philippines to review shutdown of 232MW coal plant


17/02/25
17/02/25

Philippines to review shutdown of 232MW coal plant

Manila, 17 February (Argus) — The Philippines will review plans to retire the 232MW Mindanao coal-fired power plant in Misamis Oriental province because the rehabilitation of a major regional power complex could cause an electricity supply shortage. The country could put on hold plans to accelerate the retirement of the Mindanao coal plant to 2026 from 2031, the Department of Energy (DoE) said. The plant, majority owned by private-sector Aboitiz Power, started operations in 2006 under a build-operate-transfer (BOT) agreement with the National Power and Power Sector Assets and Liabilities Management. The plant was originally scheduled to be retired in 2031 once the BOT agreement had run its course and plant ownership transferred to the national government, but authorities later decided to shut it down by 2026. The plant consumes over 1mn t/yr of coal. Authorities might review the retirement plans to offset the loss of power supply from the 1,000MW Agus-Pulangi hydropower complex, which will be rehabilitated next year. The complex comprises seven hydropower plants and serves as a key source of baseload power in the Mindanao grid. It is currently capable of producing only 600-700MW of power because of siltation and ageing infrastructure. Parts of the power complex are over 50 years old and its oldest dam, Agus 6, started commercial operations in April 1971. The rehabilitation involves repairing, replacing and upgrading the components of an existing hydroelectric power plant to restore its functionality, improve efficiency and extend its lifespan. The complex will run at a derated capacity during rehabilitation works, which could take several years. This comes as power demand in the Mindanao grid continued to increase last year. Demand averaged 2.248GW in 2024, a 10.2pc increase from 2.040GW a year earlier. The Mindanao plant could supply enough power to keep the grid stable at its full capacity, by covering for the loss in generating capacity and meeting the increase in power demand, DoE added. By Antonio Delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s economy grows in 2024


17/02/25
17/02/25

Japan’s economy grows in 2024

Osaka, 17 February (Argus) — Japan's economy expanded for a fourth consecutive year in 2024 as corporate investment increased, even as oil product demand fell. Gross domestic product (GDP) rose at an annualised rate of 2.8pc in October-December, according to preliminary government data released on 17 February, following growth of 1.7pc in July-September and 3pc in April-June. This sent Japan's full-year 2024 GDP up by 0.1pc from a year earlier, its fourth straight year of growth after a Covid-19 induced slump in 2020. Nominal GDP amount totalled ¥609.3 trillion ($4 trillion) in 2024, exceeding ¥600 trillion for the first time. Investment by private-sector companies rose by 1.2pc from a year earlier in 2024, recording annualised growth of 1.9pc in October-December. The rise partially reflected a government push for a green and digital transformation of the economy in line with its 2050 net-zero emission goal. Such spending is expected to continue to increase under Tokyo's economic stimulus package. Japanese business federation Keidanren has forecast that nominal capital investment could rise to ¥115 trillion in the April 2027 to March 2028 fiscal year, up by 7.5pc from an estimated ¥107 trillion in 2024-25. But private consumption, which accounts for more than 50pc of GDP, dropped by 0.1pc from a year earlier in 2024, as inflation capped spending by consumers. This also probably weighed on demand for oil products such as gasoline, despite government subsidies. Japan's domestic oil product sales averaged 2.4mn b/d in 2024, down by 5.2pc from a year earlier, according to data from the trade and industry ministry Meti. Gasoline sales, which accounted for 31pc of the total, dropped by 2.2pc to 752,700 b/d over the same period. But Japanese electricity demand edged up by 0.7pc year on year to an average of 98.8GW in 2024, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. Stronger power demand reflected colder than normal weather in March and unusually hot weather in October. Japan's real GDP is predicted to rise by 1.2pc during the 2025-26 fiscal year, following predicted 0.4pc growth in 2024-25 and a 0.7pc rise in 2023-24, the Cabinet Office said on 24 January. The figures are the Cabinet Office's official estimates and form the basis of its economic and fiscal management policies. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil’s offshore wind gains momentum


14/02/25
14/02/25

Brazil’s offshore wind gains momentum

New York, 14 February (Argus) — Brazil is preparing for its first offshore wind projects following the approval of legislation that establishes a regulatory framework for investments in the sector. Industry leaders anticipate that this legal foundation will accelerate development, with the first auction for offshore wind areas expected soon. The move comes as Brazil seeks to leverage its vast wind resources and address slowing growth in its onshore wind sector. "The offshore wind law was approved at the right moment," said Elbia Gannoum, president of Brazilian wind association Abeeolica. "Brazil has one of the largest wind generation potentials, and without this law, the country risked missing investment opportunities." The new legislation comes as onshore wind expansion slows. After nearly 5GW of new wind capacity was added in 2023, investment declined, with capacity expanding by just 3.3GW last year, according to Abeeolica. A lack of demand from power distributors in energy auctions and an oversupply of power generation capacity have contributed to the slowdown. With limited demand for new projects, equipment suppliers have scaled back operations, and in some cases, suspended activities in Brazil. With the offshore wind law in place, the sector is optimistic that the government will hold its first auction for offshore wind areas this year or in early 2026. Awarding these areas would pave the way for Brazil's first offshore wind projects to begin operations by 2031 or 2032. Before the auction, the government must finalize regulations for the sector, which Gannoum expects will be complete this year. Companies have already begun preparing for the auction, conducting assessments of wind speeds, power transmission infrastructure and supply chains, according to Ricardo de Luca, Brazil country director for UK offshore wind developer Corio Generation. Once the areas are awarded, project development could take up to four years, followed by an auction for power purchase agreements in 2028, de Luca estimates. Corio plans to develop five offshore wind projects in Brazil, totaling 5GW of installed capacity. Wind developers warn that Brazil must also prepare its power transmission infrastructure for future offshore wind projects. "Even though areas haven't been awarded, the mines and energy ministry must start planning transmission infrastructure in regions with significant offshore wind potential," said Fernando Elias, regulatory director at Casa dos Ventos. "Without long-term planning, infrastructure bottlenecks could prevent projects from moving forward." While transmission constraints could pose challenges, Brazil has an advantage in developing offshore wind thanks to its established offshore oil and gas industry, said Renato Machado dos Santos, regional director of renewable energy at RES. "There is significant overlap in the supply chains for offshore wind and oil, which will not only accelerate investment but also make Brazil a more attractive destination for investors." Opportunities ahead? Despite potential hurdles, offshore wind developers remain cautiously optimistic. US president Donald Trump's 20 January executive order suspending offshore wind leasing and permitting could shift more investor interest toward Brazil. "Trump's policies have redirected attention to Brazil," de Luca said, adding that the Brazilian government has demonstrated a long-term commitment to renewable energy development. Beyond the offshore wind law, other recent legislation is expected to bolster demand for power from future offshore wind projects. This includes the approval of the low-carbon hydrogen law, which will drive demand for green fertilizer production. Additionally, the expansion of data centers for artificial intelligence and growing electricity demand from electric vehicle adoption will contribute to future power consumption in Brazil, a share of which will come from offshore wind projects, Gannoum said. Brazil’s onshore wind capacity GW Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Serbia aims to couple its electricity market in 4Q26


14/02/25
14/02/25

Serbia aims to couple its electricity market in 4Q26

London, 14 February (Argus) — Serbia aims to couple its day-ahead power market with the European market through its borders with Hungary and Bulgaria by the fourth quarter of 2026, but whether it will receive an exemption from the EU's carbon border adjustment mechanism (CBAM) remains unclear, market operations specialist at Serbian electricity exchange Seepex Milos Mosurovic has told Argus . The fourth quarter of 2026 is the first available time slot for EU-led regulatory body Energy Community constituent states to join the EU's single day-ahead coupling scheme and was assigned by the market coupling steering committee, Mosurovic said. But market coupling is a prerequisite for exemption from the CBAM, which is planned to go into effect on 1 January 2026. Energy Community members previously agreed to the 2022 Electricity Integration Package, which would provide an exemption from the CBAM until 2030 if they coupled with the European market and met other requirements by 2026. But Energy Community Secretariat director Artur Lorkowski recently said in an interview with Argus that Energy Community constituent states probably will not receive a CBAM exemption , as they have not achieved market coupling, which is a precondition for exemption. But Lorkowski did acknowledge that "greater clarity is needed" on specific criteria to determine when a third country may be considered to have ''an electricity market that is integrated with the union". This lack of clarity, along with the procedural meetings, have created market uncertainty surrounding whether and how the CBAM could be applied to Energy Community constituent states. "All relevant participants in the energy sector are aware that [Energy Community] countries will not couple until [after] 1 January 2026," Mosurovic said. "This is why we do not know what to expect regarding the CBAM." If the CBAM was applied to electricity flows, an EU emissions trading system (ETS) equivalent would be applied to Serbian electricity flows beginning on 1 January 2026. The implementation of an EU ETS equivalent was deemed to be the most expensive of four models that could be introduced into the Energy Community region, as it would lead to an increase of 13-29pc more than the baseline scenario calculated on the electricity market as of July last year, an Energy Community ministerial council report published in December shows. The four proposed models are a regional ETS, a fixed-price ETS, a carbon tax and integration into the existing EU ETS. The final option was ranked the lowest for feasibility from a legal and technical standpoint. And the method of the application of the CBAM to electricity flows has not been revealed. According to an Energy Community report from October , it is not possible to separate electricity exports from transit flows based on currently available data, and therefore it is possible that both export and transit volumes will be subject to the CBAM, as transactions for electricity entering the EU from contracting parties were declared solely as imports regardless of origin. Thermal power plants among community contracting parties have benefited from access to the EU's integrated electricity market, but have not been subject to the EU ETS, despite all coal and lignite-fired thermal power plants in the region considered to be in breach of the requirements of the EU's large combustion plant directive. But thermal capacity remains key in the Balkans, despite more renewables entering the power mix. Coal-fired generation accounts for about 40pc of annual domestic generation in the region. By Annemarie Pettinato Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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