Malaysia increases gas-fired electricity use in December, as coal dependence falls
Grid operator data shows that Malaysia increased its natural gas-fired electricity generation in December and reduced its reliance on coal. The rising production helped to boost local supply, and also expanded liquefied gas exports.
Real-time data provided by Malaysia's Grid Systems Operator (GSO), showed that gas-fired electricity generation was responsible for the majority of the nearly 5% increase in electricity delivered to Peninsular Malaysia during December. This offset a decline in coal-fired production of 4.3%.
The GSO does not release monthly output figures.
Malaysia, a nation with 35 million people in Southeast Asia, does not expect natural gas to replace coal as the main energy source until at least the next decade. Malaysia, the world's fifth largest LNG exporter, expects its gas imports to increase in the next four to five year as the demand for the fuel increases.
The reliance on gas to generate?power is expected gradually increase, with the shift becoming more significant only after 2030, said Prateek?Pandey, Head of Asia-Pacific Oil and Gas Research at Rystad Energy.
The Malaysian Energy Commission (which regulates the grid operator) and the GSO didn't immediately respond to questions about the analysis.
The analysis of GSO data revealed that gas?use in Peninsular Malaysia, which accounts for around 80% of the national electricity demand, rose by 28.4% on an annualized basis in December, marking the second consecutive monthly increase.
According to government statistics, Malaysia's gas production grew by 11.8% in the third quarter of the year, the highest rate in three years.
Data from analytics firm Kpler revealed that the increase in gas production also helped to lower Malaysia's LNG imports in 2025. These fell by?29%, to 2.26 millions metric tons. This is the lowest level in four years. Meanwhile, exports increased to a new record of 28.25million tons.
Analysts say that Malaysia's production of gas is likely to plateau or even start declining by the end of the decade. This will coincide with the beginning of a steady period of growth in the gas-fired power generation sector.
The power consumption in Peninsular Malaysia is on the rise due to an increase in energy-hungry data centres. This has led to a greater reliance on coal-fired electricity.
The GSO data showed that coal's share of Peninsular Malaysia's power generation increased to 58.6% by?2025, from 56.5% in 2020, and gas' share fell to 33.1%, from 36.4%, as the output fell by?nearly 10 percent in the year up to November.
Solar power production increased by 12.6%, resulting in a slight increase in its share from 2.1% to 2.4% in 2024. The Malaysian government is relying on solar power to keep electricity costs down as they move away from coal. (Reporting and editing by Tom Hogue; Sudarshan Chow, Emily Chow and Ashley Tang in Singapore. Additional reporting in Kuala Lumpur by Ashley Tang.
(source: Reuters)
