By now, it probably shouldn’t come as a surprise that the development of data centres in Malaysia will take its toll on the country’s resources. In addition to consuming copious amounts of water, these facilities demand a lot of power. As it stands, data centres are expected to devour about a third of the nation’s electricity supply by 2035.
In a written parliamentary reply, Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof revealed that electricity consumption by the data centre sector is projected to surge to 31% or 73,274 gigawatt-hours (GWh) by 2035. This compares to just 7% or 10,544 GWh used at present.
Furthermore, Fadillah noted that the rapid growth of the AI and data centre industry has caused an increase in the peak demand of the national electricity supply system. Peak demand in Peninsular Malaysia is expected to grow at a compound annual growth rate of 5.1% from 2026 to 2035, rising from 21.3 gigawatts (GW) in 2026 to 33.5 GW by 2035.
With this in mind, he explained that the government and Energy Commission are continuing to monitor the rising electricity demand, particularly in Peninsular Malaysia. Additionally, several measures are being implemented to ensure the stability of the country’s power supply. These include extending the operation of existing thermal power plants as a short-term solution. Other than that, the commission is introducing an open bidding process to add gas-based generation capacity. Large-scale solar projects are also in the works.
Fadillah, who is also the Deputy Prime Minister, went on to note that data centres can purchase renewable energy directly from private developers via the Corporate Renewable Energy Supply Scheme. Moreover, he encouraged data centres to generate their own electricity based on their respective needs to reduce dependence on the grid.
Finally, he asserted that the government, via the Data Centre Task Force, adopts a strict screening approach when it comes to new data centre applications and proposals to expand existing facilities. Essentially, approvals are only granted to projects that match the local grid capacity planning without compromising the safety and security of electricity supply.
(Source: The Edge Malaysia)
