The competing economic priorities of Malaysia and Singapore are among the challenges facing green electricity trade between the two countries, according to regional renewable energy asset developer Ditrolic Energy.
While Malaysia seeks to maximise the economic value of its renewable energy (RE) resources, Singapore is looking for competitively priced low-carbon electricity imports to meet its environmental goals.
Market reception to Malaysia's auctions of grid-pooled RE for export to Singapore has been lower than expected, even as the island state continues to signal strong interest in electricity imports by conditionally allowing companies to import gigawatts of energy.
“If the arrangement between two countries is asymmetrical, where one side captures more economic interest than the other, then it is very difficult for the contracts to be maintained over a long period of time,” said Tham Chee Aun, CEO of Malaysia-based Ditrolic Energy, which is among a number of Malaysian companies developing solar farms in Johor for power exports to Singapore.
During a panel session at the Singapore International Energy Week here, Tham said the balancing act is particularly challenging when one electricity market is more open to competition while the other is more vertically integrated, as is the case in Singapore and Malaysia.
“There needs to be a genuine process of discovery — what is the benefit that the exporting country would have, and what is the benefit that the importing country would have, and whether the benefits are symmetrical and sufficient for both parties, not only for a while, but for the next 20, 30, 40 years to come.”
He said securing the highest possible electricity export price may not necessarily be the optimal outcome, stressing the need for a pricing structure that balances affordability for buyers with adequate returns for exporters.
Malaysia had previously prohibited RE exports, partly to retain green electricity as a competitive advantage in attracting high-value, energy-intensive industries to the country.
Putrajaya subsequently lifted the ban in 2023, and promoted RE exports through initiatives such as Energy Exchange Malaysia (ENEGEM).
The Malaysian government has completed a pilot green energy auction through ENEGEM, utilising RE generated in Malaysia and pooled by Tenaga Nasional Bhd's (KL:TENAGA) ring-fenced unit Single Buyer through the national grid. Concerns over pricing concerns and the source of the electricity — drawn from a grid that also carries fossil fuel-generated power — have been cited as factors affecting market interest.
'Customer makes the market'
Beyond pricing and regulatory arrangements, customer demand would ultimately determine whether regional electricity trade takes off, Tham said.
“Regulation can enable the market, but ultimately the customer makes the market,” he said.
He noted that customers are not necessarily seeking the cheapest electricity, but power supply that meets specific requirements, including round-the-clock renewable supply backed by energy storage, as well as long-term price visibility.
Source: The Edge
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<p>Time: November 2025<br /> By: WTO and International Trade Group, Legal Department – VCCI</p>
