In the Eighth Malaysian Plan, Renewable Energy was announced as the fifth fuel in the new Five Fuel Strategy in the energy supply mix. It is targeted that RE will contribute 5% of the country's total electricity demand by the year 2005, that is by the end of the Eighth Malaysia Plan period. With this objective in mind, greater effort is being undertaken to encourage the utilization of renewable resources, such as biomass, biogas, solar and mini-hydro, for energy generation.

A programme aimed at increasing public awareness of the positive attributes of RE and energy efficiency (EE) measures is being carried out by the Centre for Education and Training in Renewable Energy and Energy Efficiency (CETREE), University Science Malaysia, Penang. The government is currently working on 'hands-on' applications of RE with a number of on-going projects.

A recent renewable study identified the renewable energy resource potential in the country, in ringgit value, as follows:

Ministry of Energy, Water and Communications has identified palm oil wastes as the biggest resource that can be easily developed. Solar is another important option, particularly for rural electrification and water heating.