CRESS: the story behind Malaysia’s latest renewable power initiative
Effective in Malaysia since September 2024, the Corporate Renewable Energy Supply Scheme (CRESS) aims to increase corporate companies’ access to green electricity supply through an open grid access system. Under the CRESS, corporate companies can now directly contract with renewable energy developers for renewable electricity while paying a system access charge to the grid system operator for grid access.
CRESS succeeds the Malaysian Corporate Green Power Purchase (CGPP) Program, a similar renewable energy program. The CGPP is related only to the virtual Power Purchase Agreement (vPPA), such as the one signed in November 2024 between ENGIE and STMicroelectronics. With the CGPP, environmental attributes associated with renewable energy generation are sold to corporate companies. This was done through a settlement mechanism called Contract of Difference (CFD), using the system marginal price of the Malaysian energy dispatch program as a reference. Further, the CGPP imposed a 30MW limit on the size of production facilities. This now forms the lower bound of renewable energy projects proposed under CRESS.
Eligibility conditions
CRESS was initially targeted at corporate companies who are new grid users, i.e. having connection agreements approved after September 30th, 2024. However, on January 16th, 2025, further enhancements were announced: CRESS will be open to participation to existing electricity users from March 1st 2025 onwards.
In the case of renewable energy developers, CRESS proposal applications can be submitted at any time and there is no announced closure date. For CRESS applications to be favorably considered, the renewable energy developer will need to demonstrate project certainty – including providing contractual evidence of both land access and Power Purchase Agreement (PPA) offtake.
Benefits
Differing from the CGPP, CRESS delivers physical power and incorporates the option to include battery storage, ensuring reliability and consistency in electricity supply. This offers flexibility in choosing energy sources and makes it more cost-competitive, creating opportunities for more energy-intensive investments such as data centres.
To provide further assurance to corporate companies, the recent enhancements to CRESS introduced a 15% limit to system access charge variability in each regulatory review period, providing greater cost certainty for corporate companies. CRESS also allows companies to hedge against future fluctuations in electricity rates by locking in a fixed PPA tariff for renewable electricity supplied by a developer under CRESS.
Ultimately, CRESS offers companies in Malaysia a new route to take to advance their decarbonization efforts: an initiative that ENGIE Global Energy Management & Sales stands ready to build upon with innovative, sustainable energy solutions.
Global knowledge for local success
ENGIE leverages on international expertise with a strong local presence in APAC and Malaysia, thanks to a deep understanding of the market and a proven track record of successful partnerships in Malaysia. This includes ENGIE’s global expertise in deploying and operating Battery Energy Storage System (BESS) assets.
And since CRESS does not have a planned closure date, acting swiftly can provide significant advantages. Companies that engage with CRESS sooner can secure their renewable energy supply and benefit from the program’s flexible energy sources and better pricing.
With its parent ENGIE Group, ENGIE Global Energy Management & Sales is committed to supporting Malaysia’s effort to reduce greenhouse emissions 45% by 2030 by providing comprehensive and low-carbon energy solutions. In Malaysia, that includes risk management solutions, building low-carbon energy infrastructures and utilities, carbon offsets, energy attribute certificates, and Power Purchase Agreements (PPAs). PPAs stand out as a powerful tool for companies aiming to secure a reliable and 100% renewable energy supply. By entering into a PPA, businesses can not only stabilize their energy costs, making significant strides towards their sustainability goals. Our expertise in structuring and managing PPAs ensures that your company can navigate the complexities of the energy market with confidence. Whatever your energy needs may be, ENGIE stands ready to partner with you every step of the way, delivering tailored solutions in an unwavering commitment to a sustainable future.
“CRESS offers a flexible and cost-competitive solution to Corporate Consumers, that aligns with Malaysia’s sustainability goals. ENGIE is proud and actively looking to support this initiative and contribute to the country’s transition to a low-carbon future by continuing to deploy Solar Projects in Malaysia.” – Ernesto Rúa García, Head of Renewables ENGIE South East Asia.