Introduction
Following the Government’s recent announcement on several enhancements to the Corporate Renewable Energy Supply Scheme (“CRESS“), the Energy Commission (“EC“) has recently published the revised Guidelines for Corporate Renewable Energy Supply Scheme (“Updated Guidelines“)[1], which came into effect on 1 March 2025.
As a recap, the introduction of the CRESS is part of the Ministry of Energy Transition and Water Transformation’s (PETRA) initiatives aimed at supporting the goal of energy transition for high-priority sectors. It provides renewable energy developers (“REDs“) third-party access to the grid system to deliver energy directly to corporate consumers in Peninsular Malaysia. For an overview of the key features of the CRESS, please refer to our previous Legal Update.
This Update highlights the key changes introduced to the CRESS by the Updated Guidelines.
Expanded Definition of “Green Consumers”
Before the coming into effect of the Updated Guidelines:
- only new customers or existing customers with additional demand are allowed to participate in the CRESS; and
- for existing customers requiring additional demand, they may only contract with REDs for their additional demand.
Following the Updated Guidelines, particularly the change in the definition of “Green Consumers” who are allowed to participate in the CRESS and purchase green energy from REDs, the participation in the CRESS is now open to all new and existing customers of an electricity utility company (“EUC“) (i.e. a person licensed under section 9 of the Electricity Supply Act 1990 to distribute and supply electricity in the Peninsular Malaysia).
Further, the Updated Guidelines provide that each Green Consumer is allowed to source green energy from more than one RED up to its maximum energy as declared in the Corporate Renewable Energy Supply Agreement with the EUC. This may include any existing demand by the existing customers.
Increased Certainty of System Access Charge
Under the CRESS, the RED will be imposed with the system access charge (“SAC“) for the use of the Peninsular Malaysia grid system and associated services. The SAC was set at RM0.25/kWh for firm output and RM0.45/kWh for non-firm output.
Pursuant to the Updated Guidelines, the SAC is now fixed for a period of three years in accordance with the Incentive Based Regulation (“IBR“) regulatory period. The IBR framework is employed by the EC in approving revenues and tariffs for the regulated services in the energy supply industry in Peninsular Malaysia. Under the Guidelines on Electricity Tariff Determination under IBR for Peninsular Malaysia 2022, the length of each IBR regulatory period will be determined by EC no later than 12 months prior to the start of the next period.
In addition to the above, a cap is now imposed on the variation rate of the SAC following any revision. Any revision to the SAC which will take effect at the commencement of a new IBR regulatory period is subject to a maximum variation rate of 15% from the prevailing charge.
Conclusion
There is no doubt that the abovementioned enhancements to the CRESS will make the program more attractive to both the REDs and the consumers. Increased certainty of the SAC will make allow REDs to assess the long-term financial costs and risks for their participation in the CRESS, which may then translate into better rates and greater savings for consumers.
The CRESS is definitely an attractive way for existing consumers to transition into green energy without having to engage in any installations which would be subject to the availability and suitability of their premises.
For consumers with available and suitable space within their premises for solar photovoltaic installations, they may consider participating in the self-consumption program under the Guidelines for Solar Photovoltaic Installation for Self-Consumption in Peninsular Malaysia, in particular the non-domestic consumers as they are exempted from certain requirements until 31 December 2025 (see our Legal Update on this).
Should you require further information or any advice on the above or any other matters pertaining to projects, energy and infrastructure, please feel free to reach out to any member of our team.
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[1] Available at the EC website at www.st.gov.my.
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