Two major energy transition and security schemes will drive Southeast Asian country’s deployments but require close examination, writes Flora Zhang, market analyst at Malaysia Energy Storage Association (MESA).
Malaysia’s Energy Commission opened its sixth Large Scale Solar (LSS) programme in July with headline figures that quickly circulated across the sector: 1,250MW of battery storage bundled with 2,650MW of new solar capacity. It’s the first LSS round to make energy storage mandatory rather than optional.
For developers, investors and technology vendors assessing the opportunity, it’s worth going a level deeper than the topline numbers — both for LSS6 and for the Corporate Renewable Energy Supply Scheme (CRESS), which is shaping up as a parallel growth driver for the sector this year.
How the LSS6 storage mandate is structured
LSS6 is split into three packages, and the storage requirement applies differently across them.
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Package 1, open to all qualified developers, is the largest: 2,200MW of solar paired with 1,100MW of battery storage. Package 2 is reserved for Bumiputera developers and is also hybrid — 300MW of solar with 150MW of storage. Package 3, also Bumiputera-only, is standalone solar with no storage requirement: 150MW.
It’s worth being precise here, since two of the three packages carry the same 150MW figure for different things — one is 150MW of storage attached to a hybrid package, the other is 150MW of solar with no storage attached at all. The 1,250MW total storage figure reflects full subscription of Packages 1 and 2 combined; Package 3 sits outside that number.
A useful detail for market participants: developers bidding on the hybrid packages need to demonstrate experience in solar project development, but prior battery storage experience is not a requirement. This means solar developers without a storage track record are eligible to bid, typically bringing in a technology partner or EPC contractor for the battery component — a pattern worth watching for anyone mapping out who the active BESS players in Malaysia will be over the next few years.
CRESS: a related mechanism with its own moving parts
CRESS is a separate scheme that allows corporate buyers to procure renewable power directly from generators without a tender process. It offers one of the more direct routes to corporate clean power procurement currently available in the region.
A key cost variable for prospective CRESS participants is the System Access Charge (SAC), the fee corporate buyers pay to use the grid for these arrangements. The current SAC is RM0.2/kWh (US$0.049/kWh) for firm power and RM0.4 for non-firm power. This reflects a reduction from the original RM0.25 and RM0.45 rates, adjusted by the government in August 2025 to improve the scheme’s commercial competitiveness.
Regional industry analysis, including from Wood Mackenzie, has noted that Malaysia’s SAC remains on the higher end compared to system charges applied to corporate power purchase agreements elsewhere in the region, and further review of the rate structure is ongoing.
For buyers modelling out a CRESS deal, the firm-versus-non-firm distinction is a meaningful input: supply arrangements guaranteeing consistent output carry a different cost profile than those built around variable renewable generation, and that difference is worth factoring into deal structuring from the outset.
A July 2026 Hong Leong Investment Bank research note identified potential further regulatory refinements to CRESS as one of several factors likely to influence the sector’s trajectory in the second half of the year, alongside continued momentum from LSS6 and the MyBeST battery storage programme (which saw government contracts awarded for four equally-sized projects at strategic locations in Peninsular Malaysia, totalling 400MW/1,600MWh, that are now entering construction – Editor).
Why the details matter for planning purposes
For developers, financiers and technology vendors sizing up Malaysia’s storage pipeline, the practical exercise is less about the headline capacity target and more about the specifics underneath it: which packages carry which requirements, how access is priced for different supply profiles, and what track record qualifies a bidder for participation. These are the inputs that shape how a project or procurement decision actually gets structured.
As LSS6 packages are awarded and CRESS agreements are signed over the coming months, these mechanism-level details will continue to matter for how projects are planned, financed and executed — and they’re a useful reference point for market participants working through their own due diligence.
About the Author
Flora Zhang is a market researcher at Malaysia Energy Storage Association (MESA). MESA is the industry body for energy storage in Malaysia, working with developers, technology providers and policymakers to advance the sector.
