Enhancement of Malaysia’s CRESS Framework and Introduction of CRESS Acceleration Package

22 September 2026

• CRESS procedures and contracting structures 
  Key measures include setting a minimum contract duration of 10 years for the Bilateral Energy Supply Contract (‘BESC’) and streamlining documentation processes. The stipulation of a minimum term for the BESC will provide renewable energy developers (‘REDs’) and their financiers with greater long-term revenue certainty, thus making CRESS projects more bankable.

• Technical requirements 
  Solar photovoltaic (PV) and battery energy storage system (BESS) configurations, system operations, and access to information on grid capacity will be refined. This will give REDs clearer visibility on operational requirements.

• Determination of the System Access Charge  
  Since the inception of CRESS, the System Access Charge (“SAC”) has been viewed as a stumbling block to the commercial viability of participation. The initial SAC was set at 25 sen/kWh (firm output) and 45 sen/kWh (non-firm output), subject to a review every three years with any revision being capped at 15%. This was subsequently revised to 20 sen/kWh (firm output) and 40 sen/kWh (non-firm output).
   
  The Ministry has committed to improving the principles for the determination of the SAC starting from the fifth regulatory period in 2028. This is aimed at establishing a transparent and reasonable cost-charging structure, as well as ensuring non-participating consumers will not unfairly bear additional system costs.

• Reduced SAC  
  The SAC for firm output will be reduced to 14 sen/kWh.

• Mandatory term for BESC 
  A minimum 10-year term will be enforced for the BESC.

The CRESS Acceleration Package is open to both existing REDs and corporate consumers that are registered with the Single Buyer, as well as new participants.
 
The above features of the CRESS Acceleration Package will no doubt be attractive to REDs, corporate consumers and financiers alike given the lower SAC and long-term commitment for the sale and purchase of power. However, it is pertinent to note that these benefits are subject to compliance with one condition: the project must achieve commercial operations no later than 31 December 2028. Further, the Ministry has expressly stated that applications for an extension of time will not be considered. The enforcement of such a strict timeline is intended to ensure new renewable energy generation capacity development is genuinely accelerated.
 
If a project fails to achieve commercial operations by 31 December 2028, its eligibility under the CRESS Acceleration Package will be revoked, and the prevailing baseline SAC will apply.
 
The Increased Potential of CRESS        
 
These enhancements, as well as the introduction of the CRESS Acceleration Package, strongly highlight the critical role of CRESS in driving Malaysia’s energy transition journey. A surge in market activity is expected in the coming months as REDs and corporate consumers expedite efforts to execute project agreements and secure access to the grid ahead of the 31 December 2028 deadline.
 
 
For enquiries in relation to CRESS, please contact Richard Khoo and Rachel Chiah, Partners of the Energy Practice of Skrine.
 
This article/alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.