PETALING JAYA: Malaysia’s energy transition is entering a new phase, with energy efficiency and renewable energy (RE) set to become increasingly important investment themes as the country seeks to moderate demand growth while expanding clean- energy capacity, says MBSB Research.
The research house is positive on the RE subsector, supported by structural policy tailwinds under the National Energy Transition Roadmap, while the newly launched National Energy Efficiency Policy and Action Plan 2026-2035 (NEEAP 2.0) is expected to create opportunities across industrial and commercial energy management, mechanical and electrical (M&E), heating, ventilation, and air conditioning (HVAC) and retrofit works.
MBSB Research said NEEAP 2.0 marks a shift in Malaysia’s energy transition narrative from building more generation capacity, towards consuming energy more efficiently.
The plan targets an 11.6% reduction in energy demand against the business-as- usual scenario by 2035 and is estimated to require RM36.6bil in investment, of which RM36.04bil, or 98.5%, is expected to come from the private sector.
In addition, the plan is expected to generate RM85.2bil in cumulative energy savings between 2026 and 2035, with industry accounting for approximately 69% of the savings, followed by commercial buildings at 21% and households at 10%.
MBSB Research said the industrial sector would deliver the largest share of actual energy savings, with measures covering energy-efficient utilities, high-efficiency motors, digitalised production, heat recovery, energy management systems and solar thermal preheating.
MBSB Research’s most attractive opportunities are concentrated in about RM9.1bil of industrial and commercial private investment, spanning industrial utilities, high-efficiency motors, automation, HVAC and chillers, heat recovery, M&E retrofits and district cooling.
It expects firms involved in solar, energy management and M&E services to benefit as mandatory audits, reporting requirements and enforcement under the Energy Efficiency and Conservation Act 2024 translate into actual capital expenditure.
Meanwhile, MBSB Research maintained a positive stance on RE following the approval of 42 projects under the 2026 Feed-in Tariff 2.0 programme, representing 331.4 megawatts (MW) of net export capacity.
Small hydro accounted for 169.23MW (51%), biomass for 135.9MW (41%), and biogas for 26.19MW (8%). The projects are expected to achieve commercial operation in 2029 to 2030 and generate RM4.3bil in investments.
The research house views the awards positively as biomass, biogas and small hydro improve Malaysia’s energy-source diversity and reduce dependence on gas and coal.
Longer term, it forecast RE capacity to rise to 70% of the national capacity mix by 2050 from 23% in 2020, requiring annual RE installations to more than quadruple to 2.2 gigawatts.
Solar is expected to remain dominant, increasingly paired with battery energy storage systems to address intermittency and support grid stability.
Among potential beneficiaries, MBSB Research has “buy” calls on Pekat Group Bhd
and Samaiden Group Bhd, while noting that Solarvest Holdings Bhd, M&E contractors and energy-efficiency players could benefit from the convergence of solar deployment and efficiency upgrades.
The research house also highlighted Kinergy Advancement Bhd’s integrated RE, clean energy, energy-efficiency and engineering capabilities, which could position it to capture the emerging opportunities across the energy-transition value chain.
