Why Businesses Must Care About Renewable Energy
THE global energy transition is no longer a distant policy goal; it is a business reality. Rising energy costs, climate change pressures, and regulatory demands are reshaping the way companies operate.
Renewable energy (RE) sources such as solar, wind, and hydropower are central to this shift, but their variability raises questions about reliability and long-term sustainability.
For businesses, the challenge is not only environmental but also economic: how to harness renewable energy while ensuring operational continuity, cost efficiency, and competitiveness.
Renewable Energy and Business Reliability
From a technical perspective, renewable sources are clean but intermittent. Solar panels depend on daylight and weather conditions, while wind turbines rely on unpredictable wind speeds.
Even mini-hydro systems experience seasonal drops in output, particularly during dry months. For businesses, this variability translates into risks such as operational disruptions, higher costs from backup systems, and uncertainty in long-term planning.
In contrast, conventional coal- or gas-fired power plants can deliver hundreds of megawatts continuously, whereas rooftop solar installations generate only a few kilowatts intermittently.
This gap highlights why businesses must look beyond the simple adoption of renewable energy towards integrated solutions that ensure reliability.
Malaysia’s Energy Transition
Malaysia has set ambitious targets to achieve 70 per cent renewable capacity and carbon neutrality by 2050. For businesses, this transition presents significant opportunities.
Companies can participate in renewable projects ranging from solar farms to hydropower expansions, while supply chains can innovate around energy storage, smart grid components, and efficiency solutions.
Early adopters of renewable energy stand to gain a competitive advantage by strengthening their environmental, social, and governance (ESG) credentials, which increasingly influence investor decisions and customer loyalty.
Sarawak, with more than 70 per cent of its electricity generated from hydropower, is positioned as Malaysia’s largest renewable energy developer.
Businesses operating in Sarawak can leverage this advantage to reduce energy costs, meet sustainability targets, and explore regional energy trade.
The Hidden Resource Challenge
While renewable energy is often perceived as limitless, the technologies that enable it depend on finite critical minerals such as lithium, cobalt, and silicon.
Their extraction raises environmental and geopolitical concerns, creating both risks and opportunities for businesses.
Companies face potential supply chain disruptions if mineral availability declines or prices rise sharply, but they also have opportunities to innovate through recycling, alternative materials, and circular economy models.
Strategic partnerships with suppliers and governments can help secure long-term access to these resources. Businesses that anticipate these challenges and invest in sustainable sourcing will be better positioned to thrive in the renewable economy.
Smart Grids as the Business Enabler
The solution to renewable variability lies in smart grids, which are intelligent systems that balance supply and demand in real time.
For businesses, smart grids offer cost efficiency by optimising energy use, improved reliability through AI-driven forecasting, and flexibility by enabling decentralised generation and storage.
Sarawak’s smart grid initiatives, supported by hydropower and emerging floating solar farms, demonstrate how advanced energy infrastructure can benefit industry.
Universities are driving research and pilot projects, creating opportunities for collaboration between academia and businesses.
This ecosystem allows companies to test new technologies, develop innovative solutions, and integrate sustainability into their operations.
Decentralisation and Consumer Participation
Smart grids decentralise energy management by dividing generation and load into smaller units.
For businesses, this enables greater local control over energy demand and generation, predictive insights through AI tools, and opportunities to engage employees and customers in energy-efficient practices.
Decentralisation empowers companies to become active participants in the energy ecosystem rather than passive consumers.
By managing their own energy use and contributing to demand-side management, businesses can reduce peak demand, lower costs, and strengthen their sustainability credentials.
Policy, Regulation, and Business Strategy
Government incentives, regulations, and penalties will shape how businesses engage with renewable energy.
Companies must align their strategies with national policies to minimise risks and maximise benefits. Leveraging incentives for renewable adoption, complying with carbon regulations, and collaborating with policymakers are essential steps.
By integrating sustainability into corporate strategy, businesses can future-proof their operations, enhance competitiveness, and position themselves as leaders in the transition to a low-carbon economy.
The transition from fossil fuels to renewable energy is not just an environmental necessity; it is a business imperative.
Renewable sources, supported by smart grids and sustainable resource management, offer companies a pathway to reliable, cost-effective, and resilient energy systems.
For businesses in Malaysia and beyond, sustainability is no longer a choice but a driver of growth, innovation, and long-term success.
By embracing renewable energy, investing in smart technologies, and preparing for resource challenges, companies can position themselves at the forefront of a sustainable future.
● Dr Jalal Tavalaei, Lecturer, Faculty of Engineering, Computing and Science, Swinburne University of Technology Sarawak Campus
The views expressed here are those of the writer and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at mvoon@swinburne.edu.my.
