The paper, “The future of Malaysia’s energy mix”, was authored by IDEAS senior fellows Renato Lima-de-Oliveira and Mathias Varming.

The two are advocating a shift away from the reliance on coal power, which has been increasing in recent years, to a mix of natural gas and RE sources in the short term.

In a statement, Lima-de-Oliveira said Malaysia needed to think strategically about the changing energy landscape and how best to adapt to and seize the opportunities of the transition.

“Replacing coal with gas is a low hanging fruit,” he said, adding that Malaysia needed to pivot its strengths in oil and gas (O&G) into renewables and reform the energy framework to further promote the use of renewables.

The authors believe that ambitious policy reform is needed to meet the carbon reduction targets Malaysia has pledged to meet under the UN Framework Convention on Climate Change, agreed to in Paris in 2015.

These includes incentivising O&G players to invest in renewables, reducing the government’s fiscal reliance on fossil fuels and supporting the development of the RE sector.

Varming and Lima-de-Oliveira conceded that the country’s lack of available infrastructure and technology would slow this progress, but said the above steps were necessary if Malaysia was to transition to a greener energy blend.

Previously, environmental group Greenpeace had noted that Malaysia had the potential to be a RE powerhouse in Southeast Asia, with a large solar manufacturing industry that has yet to be leveraged by the local energy sector.