Malaysian I-RECs issuances fall 27.5% YOY in 2024, redemptions rise 45%

Malaysian International Renewable Energy Certificate issuances fell 27.48% year over year to 10,624,924 MWh in 2024, while redemptions rose 44.83% to 4,063,364 MWh over the same period, the latest data from the International Tracking Standard Foundation, or I-TRACK Foundation showed.

May recorded the highest issuance figure at 2,157,985 MWh. On the other hand, the last quarter of 2024 saw the most redemption activities, making up more than 50% of total redemptions.

The decline in issuances was primarily due to a sharp drop in hydro I-REC issuances, which fell nearly 38% year over year to 7,598,772 MWh in 2024.

Malaysian hydro I-RECs are healthy in both supply and demand dynamics. Local hydropower generators have indicated that the availability of hydro I-REC is sufficient to meet the demand.

Other Southeast Asian hydro I-RECs market such as Vietnam is saturated with supply and haunted by low prices.

Solar I-REC issuance volumes fell 74.3% in Q4 when compared to the previous quarter, according to the data. On a year-over-basis, issuances rose 16.7% to 1,140,493 MWh.

Throughout the year, there was tight supply of solar I-RECs in the market, sources said. Most solar power plants are projects from state-owned utility company Tenaga Nasional Berhad (TNB), including a majority of Large Scale Solar (LSS). In Malaysia, most solar I-RECs are produced from rooftop solar. Registering these I-RECs are challenging due to their small capacity and the need for aggregation, sources added.

Apart from this, preferences in technology played a major role in the high demand. Market participants in Malaysia said corporates were more interested in solar I-RECs, as solar power projects tend to have lower environmental impact compared with hydro and biomass projects.

"Solar is a more attractive option since it is environmentally friendly," a trader said.

Meanwhile, biomass I-REC issuances saw a 66.7% year-on-year increase to 583,891 MWh in 2024.

In the global market, buyers prefer biomass I-RECs with sustainability certifications such as Malaysian PalmOil Standard (MSPO), Roundtable on Sustainable Palm Oil Standard (RSPO), and International Sustainability and Carbon Certification (ISCC). Certifications like these verifies biomass I-RECs for sustainable biomass and bioenergy production.

Supply of biomass I-REC remained moderately available throughout 2024, but demand surged in the second half of the year, thus driving prices higher.

On the redemptions front, hydro I-RECs saw a 27.8% year-over-over increase to 9,939,004 MWh in 2024. Solar I-RECs saw redemptions edged down 1.62% to 1,124,354 MWh, while biomass I-REC's redemptions were recorded at 482,037 MWh, surging 128.94%.

Prices mostly rise

Platt's assessments for Malaysian International Renewable Energy Certificate (I-RECs) for all technologies mostly rose, despite a mixed supply for different technologies available in the market.

Platts assessments for vintage 2024 solar I-RECs closed at $5.20/MWh on Feb. 19, 2024 and peaked at $5.56/MWh in April due to a supply shortage. Prices dropped to $4.98/MWh on Dec. 31, 2024, when a market participant replenished the supply with 30GW of solar I-RECs with a $5.00/MWh offer.

Assessments for vintage 2024 hydro I-RECs closed at 90 cents/MWh on Feb. 19, 2024. Shortly after, prices surged to an all -time high at $1.25/MWh in March and Novembe and ended the year at $1.19/MWh on Dec. 31, 2024.

Platts assessed vintage 2024 biomass I-RECs at $1.95/MWh on Feb. 19, 2024. Prices fell to all time low in June at 94 cents/MWh, before surging to $1.50/MWh in October and finally closed at $1.44/MWh on Dec. 31, 2024.