Malaysia is making net gains towards its 2050 sustainability goals. An important element to this is Third Party Access (TPA) in the energy sector. While it began with gas facilities, it is being expanded to RE producers too, particularly those that can provide firm output. You might also have heard about it as the liberalisation of the grid.
In simple terms, TPA allows independent companies to use existing energy infrastructure owned by larger utility companies. Think of it as a tolled private highway which everyone can drive on, and not just its owners.
This promotes competition, innovation, and paves the way for RE producers to contribute to energy security. Without a doubt, TPA is an enabler for sustainability with four key benefits:
TPA removes barriers to market entry by allowing smaller, independent RE producers to use existing energy networks and connect to the national grid. This supports the transition from fossil fuels to RE sources like solar, wind and biogas, which may otherwise face financial and logistical challenges in delivering energy to consumers.
By providing a platform for RE to enter the market, TPA fosters a more diverse energy mix. This reduces Malaysia’s dependence on fossil fuels, aligning the national goal to increase RE share of the energy mix to 31% by 2025.
With a greater number of providers in the market, competition increases. This often leads to more competitive pricing for customers, along with better services. TPA would make it easier for RE producers to establish power purchase agreements directly with consumers, such as businesses looking to adopt green energy. This creates a more flexible and competitive energy market.
TPA encourages infrastructure sharing, reducing the need to build new, redundant systems. This minimises potential environmental impact and improves the overall efficiency of energy distribution.
Through TPA frameworks, Malaysia can eventually adopt peer-to-peer energy trading models where individuals or businesses with surplus RE can sell it to others. This democratises energy access and promotes sustainable practices.
An open and competitive energy market is more attractive to investors, particularly in green technologies. This supports Malaysia’s ambition of being a regional hub for RE innovation, such as with the Energy Exchange Malaysia (ENEGEM) which acts as the marketplace to sell green electricity through a bidding mechanism.
The groundwork for TPA began with initiatives like the Gas Supply Act 1993 and the Third- Party Access System introduced by the Energy Commission. These frameworks allow third parties to access the nation’s natural gas infrastructure, promoting a more competitive and transparent energy market.
In the electricity sector, Malaysia’s Net Energy Metering (NEM) scheme serves as a stepping stone. While not a full-fledged TPA system, NEM enables consumers to generate their own RE and export excess energy back to the grid. This hints at the potential benefits of broader TPA implementation.
For corporations, Malaysia introduced the Corporate Renewable Energy Supply Scheme (CRESS) in 2024 as part of a broader energy transition effort to promote the adoption of green energy in Peninsular Malaysia. CRESS allows participants access to RE via third-party providers. It was applicable to new consumers or existing consumers but for new capacity only.
In 2025, enhancements to CRESS were announced, opening access to existing power consumers and maintaining system access charges (SAC) for three years. Currently, SAC, or ‘wheeling’ charges, are 45 sen/kWh to ‘wheel’ electricity from a solar farm to its corporate consumer, or 25 sen/kWh when the arrangement is equipped with battery storage.
While TPA holds promise, effective implementation requires clear regulations that balance the interests of existing utility companies and new market entrants. Smaller producers may lack the resources or technical know-how to compete effectively, requiring support and capacity- building programmes.
Additionally, existing infrastructure needs to be updated to handle multiple energy sources and increased traffic. Another hurdle which can be prohibitive be the perceived high SAC of non-firm output. Although this makes the value proposition for battery storage greater, installing one requires more capital.
When it comes into fruition, TPA will be an asset for a sustainable and inclusive energy future. By liberalising infrastructure, Malaysia can accelerate its RE transition, reduce carbon emissions, and ensure affordable energy for all.
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