PETALING JAYA: Malaysia expects about 9 gigawatts (GW) of gas-fired power generation capacity to be deployed into the electricity system through 2030 as the country phases out coal and prepares for rising electricity demand.
Minister of Economy Akmal Nasrullah Mohd Nasir said the government would no longer approve new coal-fired power plants, with the phase-out of coal generation targeted for completion by 2044, when the last coal-fired power plant is expected to retire.
“At the moment, managing the electricity, we expect the need for about 9 gigawatts to be deployed or to be put into the system through our gas power plant,” he told reporters after delivering his special address at the Energy Regulatory Insights (ERI) 2026 conference here today.
He said the planning would be managed by the Ministry of Economy, the Ministry of Energy Transition and Water Transformation (PETRA) and the Energy Commission (ST) to ensure electricity demand is met while Malaysia remains committed to reducing the carbon footprint of its energy sector.
The expected increase in gas-fired capacity comes as Malaysia’s electricity demand continues to rise, driven by population growth and the expansion of energy-intensive sectors such as data centres.
Akmal said weather patterns would also influence electricity demand, with hotter conditions raising the need for cooling systems and air-conditioning.
“In terms of the projection for demand on energy, definitely we see a pattern of increase. One is the population growth. But number two, there is also an increase in the high usage of energy in sectors such as data centres,” he said.
He added that managing electricity demand would become increasingly important alongside managing supply.
“Managing demand of energy will become as crucial as managing the energy supply. I think for the next 5 to 10 years’ time, Malaysia must really remain disciplined enough to ensure our system needs to be continuously upgraded, not just in terms of the power produced, but also in terms of the grid, in terms of infrastructure, so that our system remains affordable, remains safe, and remains sustainable.”
This would involve not only increasing power generation, but also upgrading the grid and supporting infrastructure to ensure the system remains affordable, safe and sustainable.
Malaysia’s peak electricity demand in Peninsular Malaysia is projected to increase from 21.3GW in 2026 to 33.5GW by 2035, according to government projections.
Data centres are expected to be a major contributor to the increase in electricity consumption.
ST’s NEWGEN26 competitive bidding exercise is seeking proposals for new gas-fired power plants scheduled to commence operations between 2029 and 2031.
The exercise is intended to ensure sufficient generation capacity and maintain system stability as demand grows and existing capacity retires.
ST’s consultation paper on gas supply to the power sector has indicated potential new gas-fired plants totalling about 7.85GW for the 2028–31 period.
Akmal said Malaysia’s energy transition should not be measured simply by the amount of new generation capacity added to the system.
He stressed that energy efficiency and conservation would be increasingly important, particularly as the government implements the Energy Efficiency and Conservation Act (EECA).
“It’s not just about the megawatts that need to be deployed in the system,” he said.
In his address, Akmal said the energy transition would require upgrades to transmission and distribution infrastructure, energy storage, forecasting, digitalisation and demand-side management, stressing that the grid must be capable of connecting, balancing and delivering increasing amounts of renewable energy.
He said Malaysia’s energy reform agenda must balance energy security, affordability and sustainability, while supporting investment and economic growth.
The government has set a target of achieving 40% renewable energy installed capacity by 2035 and 70% by 2050 under the National Energy Transition Roadmap.
Akmal said the transition must ultimately support a reliable and affordable electricity system while reducing emissions.
“We need to ensure our system needs to be continuously upgraded, not just in terms of the power produced, but also in terms of the grid, in terms of infrastructure, so that our system remains affordable, remains safe, and remains sustainable,” he said.
