Virtual power plant pilot in Malaysia serves fewer than 1,000 households after three years

KUALA LUMPUR, 28 AUGUST 2026 —

Tenaga Nasional Bhd’s virtual power plant pilot has enrolled fewer than 1,000 households three years after launch, a fraction of the scale seen in U.S. programmes run by Google and Tesla.

A virtual power plant links household devices—smart thermostats, EV chargers, rooftop solar and batteries—into a grid-balancing tool that can reduce stress during peak hours in exchange for bill credits or signing bonuses.

Tenaga targets 10,000 households by 2025, still well below regional efforts: Singapore’s national grid operator has signed up more than 20,000 households since 2021, while Australia’s AGL Energy has enrolled 50,000 under its VPP since 2018.

VPPs work by letting utilities remotely adjust or delay energy use—lowering thermostats during heatwaves or slowing EV charging when demand spikes. Participants typically receive bill credits or cash bonuses; EnergyHub, a software provider that helps utilities operate VPPs, cites payouts of US$50–150 up front and US$25–50 annually for smart thermostats, with larger savings possible for EV owners or battery users.

Tenaga’s filings do not detail payout levels, but Malaysia’s Energy Commission has said tariff incentives are capped at RM15 per month per household to limit cross-subsidies.

Adoption has been uneven. Utilities say programmes require compatible hardware and supportive state policies, both scarce in Malaysia outside the capital region. “Most programmes are established in places with lots of flexible devices, stressed grids, supportive utilities, or strong state policies,” said Sanya Carley, a professor at the University of Pennsylvania who studies energy policy.

In Malaysia, only households with approved smart meters, Wi-Fi-enabled air-conditioners and grid-communicating inverters can join Tenaga’s pilot, limiting eligibility to newer developments.

Consumer advocates also warn of data risks. EV and battery programmes can track charging schedules and power draw, while smart thermostats reveal occupancy patterns. The Electronic Frontier Foundation has cautioned that such data could expose private routines if shared with device makers or third-party platforms. Tenaga and its technology partners have not disclosed data-sharing agreements, saying only that information is used for grid balancing.

For now, uptake is concentrated among affluent urban households that already own EVs or rooftop solar. “The most expensive devices, namely EVs and home batteries, are often what yield the greatest savings,” said Joseph Vellone, CEO of ChargeScape, a VPP operator in the U.S. In Malaysia, EV penetration stood at 1.1% of new car sales in 2023, and rooftop solar reached 1.8 GW of capacity—both below targets set in the National Energy Transition Roadmap.

Utilities argue that even small-scale VPPs help defer grid upgrades. “If we do it well, I think it can really be a benefit,” said Severin Borenstein, faculty director of UC Berkeley’s Energy Institute, who sits on the board of California’s grid operator. Borenstein warns that poorly designed programmes can pay households for energy they were not going to use anyway, potentially raising bills for non-participants. Tenaga has not published a cost-benefit analysis for its pilot.

Malaysia’s Energy Commission plans to finalise a national demand-response framework by year-end, which could expand VPP eligibility to include older buildings. Until then, households interested in VPPs must check their utility’s website for terms like “demand response,” “peak rewards” or “connected solutions,” since the phrase “virtual power plant” rarely appears in local marketing.

For Malaysian business readers, the slow rollout shows how regulatory, hardware and policy barriers can stall even well-funded smart-grid initiatives, keeping demand-side flexibility a niche tool rather than a grid-scale solution.

Related: Tenaga Nasional Berhad · Energy Commission