In today’s digital landscape, electricity sustains the infrastructure that delivers public systems: payments at a café, a work-from-home meeting, a hospital’s medical equipment, as well as a student’s online learning platform.

In fact, the International Energy Agency (IEA) projects that global electricity demand could rise by around 40% by 2035 as our world increasingly shifts towards electrification. Demand will rise from sectors like transport, buildings, and industry, while the growth of advanced manufacturing and AI-enabled industries will place additional pressure on the electricity system.

The consequences of electricity disruptions in today’s world are dire. The IEA notes that electricity interruptions can affect hospitals, payment systems, telecommunications, transport, food safety, and broader economic activity. In this sense, electricity reliability is no longer simply an operational issue for utilities. It has become increasingly connected to quality of life, economic resilience, and public confidence in the infrastructure that supports everyday life.

Electricity as the backbone of economic activity

According to recent national accounts data by the Department of Statistics Malaysia (DOSM), Malaysia’s overall gross domestic product (GDP) in 2025 reached RM2.03 trillion, highlighting the growing scale of an economy that depends on energy infrastructure. Within this economy, the electricity sector provides the foundation for nearly every other sector, playing an important role that extends beyond its directly measured contribution to national GDP.

Within this economy, the electricity sector provides the infrastructure that enables activity across almost every other sector

From the goods Malaysians buy to the digital services they use and the businesses that provide jobs, reliable electricity underpins much of what people depend on every day.

Advanced manufacturing today, for example, requires stable power to operate machinery and maintain production schedules, while telecommunications and digital services rely on power to keep networks running. Local businesses increasingly depend on cloud computing and digital payment systems, while transport is gradually becoming more electrified.

Reliable electricity will also drive the next wave of entrepreneurial development. The Malaysian Digital Economy Corporation (MDEC) reports that 2.43 million MSMEs had adopted e-commerce cumulatively by 2024, while 277,233 businesses had exported through e-commerce since 2017. The more SMEs move online, the more their ability to trade, receive payments, communicate with customers and operate their businesses depends on reliable power and connectivity.

As Malaysia moves through its energy transition, the larger ecosystem is also expected to become an increasingly important source of investment and economic activity. Under projections associated with Malaysia’s National Energy Transition Roadmap (NETR), the Responsible Transition initiative could generate between RM1.2 trillion and RM1.3 trillion in investment opportunities by 2050, contribute an additional RM220 billion to GDP, and create approximately 310,000 green growth jobs.

The transition to a more sustainable energy system can support the development of new industries and strengthen Malaysia’s participation in value chains that will drive future economic growth.

Why smarter infrastructure matters

Driven by these factors, Malaysia’s electricity demand is projected to rise rapidly. In response, the national power grid is expected to deliver higher levels of resilience and stability to accommodate these changes.

Traditionally, power grids were built for one-way traffic. The grid of the future, however, must serve as an intelligent, two-way network that reaches millions of customers in real time. Across ASEAN, utilities are adopting smarter and more flexible electricity systems to strengthen grid resilience and support growing renewable energy integration.

Estimated smart grid investments of USD4–10.7 billion could potentially generate up to 650,000 jobs across engineering, IT integration, and digital infrastructure, reinforcing the importance of workforce readiness and stronger industry collaboration.

In Indonesia, Perusahaan Listrik Negara (PLN) is developing a Green Super Grid alongside smart-grid digitalisation to create a more flexible electricity system capable of integrating growing shares of renewable energy.

In Thailand, Electricity Generating Authority of Thailand (EGAT) uses its Renewable Energy Forecast Center to forecast wind and solar generation, helping the grid manage renewable variability while maintaining reliability.

Malaysia is progressing alongside these regional efforts, with Tenaga Nasional Berhad (TNB) recording a Smart Grid Index score of 80.4% in 2024, reflecting greater grid maturity in areas such as renewable energy integration, digitalisation, and outage management.

At the community level, TNB’s Smart Green Islands (Pulau Tenaga Hijau) initiative is strengthening energy resilience in Pulau Tioman, Pulau Redang, and Pulau Perhentian through renewable energy, energy storage, and digital monitoring.

For consumers, TNB’s nationwide rollout of smart meters has empowered both commercial and residential customers with greater visibility over when and how electricity is used. This means greater awareness and control over their energy consumption, delivering sustainable outcomes through a more convenient, digital experience.

Powering Malaysia’s next phase of growth

The stakes will continue to rise as Malaysia’s economy becomes more digital and more electrified. Electrification gives Malaysians more choice, potentially lower costs, new ways to participate in the energy system, and access to cleaner technologies with a smart grid making those benefits possible at scale.

The adoption of electric vehicles, for example, will create new relationships between consumers and the electricity system. In the longer term, technologies such as Vehicle-to-Grid, or V2G, could potentially allow parked EV batteries to become flexible energy resources, potentially supplying electricity back to the system under appropriate conditions.

Similarly, growing deployment of rooftop solar and other distributed energy resources in Malaysia will mean that consumers will be encouraged to participate in the energy ecosystem rather than exist simply as recipients of electricity.

These shifts will place greater demand on the grid, even as the need for reliable electricity remains constant. Supporting Malaysia’s next phase of economic growth while adapting to changing patterns of energy use, a smarter and more modernised grid will provide the backbone for a more dynamic electricity system built around the needs of the future.