Malaysia has driven down its use of coal in power generation and ramped up gas-fired supply by turning to its domestic offshore reserves, bucking a trend of increased coal use in response to the Middle East crisis, Reuters reported on Thursday.
This is all the more remarkable coming at a time of record power demand due to a heatwave pushing up air conditioner use and the opening of power-hungry data centers.
Power demand in peninsular Malaysia, which represents about 80% of the country's consumption, rose 11.5% in April while generation of electricity from gas rose 50.5% over the same period, data from Malaysia's Grid System Operator showed, the article said.
In absolute terms, gas-fired generation rose to a record 5.54 terawatt-hours in April and coal-fired generation fell at its steepest in more than three years to 6.67 terawatt hours, still ahead of gas despite its downward trend.
Proportionally, gas provided 42.6% of peninsular power in April, the highest since Oct. 2019 and coal's share slipped to 51.2% in April, down from 62.2% in the same month of 2025.
Malaysia, the world's No. 5 LNG exporter, delivered 446,000 metric tons of LNG from offshore gas fields to the peninsular part of the country this year, tripling from 2025's full-year deliveries of 150,000 tons, the article said, citing data from analysts Kpler.
The article says that trend reflects Malaysia's abandonment of a strategy according to which it imported coal to generate power at lower cost, a movement in the opposite direction to South Korea and Japan which are using more of the solid fuel as LNG grows more scarce.
Malaysia keeps gas prices for the domestic power industry lower than international LNG benchmarks, a discount which has been a driver of data center investments in the country, Energy Aspects analyst Kesher Sumeet said, offering a forecast of 4% power demand growth in the coming years.
Despite meeting growing demand with its own reserves, Malaysian flagship energy company Petronas said last year that the country would be importing growing volumes of LNG by the end of the decade as data centers drive up power demand, the article said.
Malaysia has increased LNG exports 14.6% year over year, so far in 2026 to 12.81 million tons, Kpler data showed, according to the article.
It quoted ICIS analyst Alex Siow as saying that it may be better for Petronas to maintain LNG exports as per long-term contracts, to be able to buy LNG more cheaply on the spot market later, based on his expectation of LNG oversupply after 2028.
has contacted Malaysia's grid system operator seeking confirmation of the trends and the reasoning behind them.
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