Malaysia: RM35 Billion Grid Bet and the EV Charging Opportunity

Malaysia is making one of Southeast Asia's largest grid modernisation bets. TNB's RM35 billion investment through 2030, nearly double the previous five-year allocation, signals how seriously the country is taking electrification. But for businesses adding EV charging, the July 2025 tariff restructure may matter more than the infrastructure itself.

The Infrastructure Push

Malaysia's EV charging network is scaling fast. As of September 2025, there are 5,149 public charge points nationwide: 1,709 DC fast chargers and 3,440 AC chargers. The government target is 10,000 charging stations by end of 2025. Shell alone has equipped 200 petrol stations in West Malaysia with EV charging.

Behind this expansion sits a fundamental constraint: DC fast chargers often require their own substation connection. A 150 kW charger isn't something you plug into existing retail infrastructure without significant electrical work. TNB's grid investment is partly about making these connections possible at scale.

The July 2025 Tariff Restructure

The bigger shift for commercial operators came in July 2025 when TNB restructured electricity tariffs. The previous Maximum Demand (MD) charge has been replaced with separate Capacity and Network charges. Bills now show four components: energy charge, capacity charge, network charge, and retail charge.

For Medium Voltage commercial customers (Tariff C1), the capacity charge jumped to RM 89.27/kW, an increase of 195-200%. Time-of-Use customers on Tariff C2 now pay RM 97.06/kW. This is the new cost of peak demand, and it changes the economics of every commercial site adding significant electrical load.

Why This Matters for EV Sites

A petrol station adding two 150 kW DC fast chargers faces a potential 300 kW increase in peak demand. At RM 89-97/kW in capacity charges alone, that's RM 27,000-29,000 per month before any energy consumption. And that assumes both chargers running at full power during the site's existing peak, which is exactly what happens when a customer arrives while the convenience store HVAC and refrigeration are already running hard.

The TOU structure offers some relief. Peak rates only apply 2-10 PM on weekdays. Overnight charging and weekend charging face lower capacity exposure. But fuel retail sites can't tell customers to come back after 10 PM. Fleet depots have more flexibility, but still need vehicles ready for morning shifts.

The Flexibility Opportunity

This tariff structure creates a clear business case for demand flexibility. A site that can reduce peak demand by 50 kW saves RM 4,500-4,900 per month in capacity charges. That's RM 54,000-59,000 per year, recurring, from peak shaving alone.

The flexibility is already on site. A typical petrol station has 30-50 kW of HVAC load, 20-40 kW of refrigeration, and 10-20 kW of lighting. Not all of this is shiftable, but a significant portion can be coordinated with EV charging sessions. Pre-cool the store before afternoon peak. Coast the cold cabinets when a vehicle plugs in. Dim back-of-house lighting during high-demand windows.

Grid Constraints Remain Real

TNB's investment addresses grid capacity at the transmission and distribution level, but individual site constraints remain. A petrol station with a 200 kVA transformer can't draw 400 kW regardless of what the upstream grid supports. Local infrastructure upgrades still take time and cost money that site operators often can't justify.

Research on Malaysia's EV transition identifies this clearly: progress is constrained by high capital costs, limited charging infrastructure, policy uncertainty, and grid limitations at the site level. The national grid is being upgraded. The site-level constraints need a different solution.

The Commercial Case

Malaysia's new tariff structure makes demand flexibility economically compelling in a way it wasn't before. The 195% increase in capacity charges means every kW of peak demand avoided has nearly triple the value it had a year ago.

For fuel retailers and fleet operators adding EV charging, this changes the conversation. Grid upgrades are one path: expensive, slow, and dependent on TNB capacity. Demand flexibility is another: deploy faster, avoid the capacity charges, and use the grid connection you already have more intelligently.

The RM35 billion grid investment will help. But for sites that need to add EV capacity now, the flexibility hiding in existing loads may be the faster path forward.