Natural gas to overtake coal as Malaysia's main source of power by 2032
Malaysia will generate more electricity from natural gas than coal by 2032 as the country ramps up its gas-fired power capacity, the chief executive of state-run utility Tenaga Nasional Bhd (TNB) said.
With demand from power-hungry data centers expected to stabilize, total electricity use is likely to be in line with Malaysia's projected economic growth of 4% to 4.5% in 2026, TNB CEO Megat Jalaluddin said on the sidelines of the ASEAN Energy Business Forum late on Wednesday.
"The data center investment has stabilized. Currently, it is growing at a steady pace," Jalaluddin said.
Surging demand from data centers in recent months has pushed Malaysia to crank up its coal-fired power output and boost imports of the fuel. It expects to import 35 million metric tons of coal annually until 2028, according to a TNB presentation reviewed by Reuters.
Coal's share in Malaysia's power generation has steadily risen, to 43% in 2024 from 6% in 2000, while gas' share has plunged to 37% in 2024 from 80% at the beginning of the century, data from energy think-tank Ember showed.
However, coal imports are set to decline from 2029, according to the TNB presentation, and push Malaysia, the fifth-largest exporter of liquefied natural gas (LNG), to use more gas for power generation and start importing the super-chilled fuel as local gas reserves decline.
The Southeast Asian nation is expected to add 50% more gas-fired power capacity by 2030 to tackle data centers' growing consumption, which will help gas overtake coal as Malaysia's main power fuel by 2032, Jalaluddin said.
Separately, Jalaluddin also said he expects Vietnam to start exporting power to Singapore through Malaysia before the end of this decade.
"This (Vietnam-Malaysia-Singapore) is basically still a greenfield project, so it will take us a while but we are going to see this happening in this decade," he said, adding that 1 GW to 2 GW of power would be exported through undersea cables.
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