Data centres get approval for 12.3GW power capacity

KUALA LUMPUR: Data centre projects in Malaysia have secured approval for 12.3 gigawatts (GW) of electricity supply capacity as of August, with the government projecting maximum demand from the sector to reach 8,391 megawatts by 2030.

Energy Transition and Water Transformation Minister Datuk Fadillah Yusof said the government was taking a phased approach to expanding power generation and strengthening grid infrastructure to support the industry's growth without compromising supply reliability.

He said the government was also working to ensure that additional costs arising from data centres' substantial electricity requirements were not unfairly passed on to other consumers.

In a written parliamentary reply to Syerleena Abdul Rashid (PH-Bukit Bendera), Fadillah said the government adopted an approach based on the principle of cost causation, under which parties responsible for additional system requirements or costs should bear the associated expenses fairly.

Measures introduced include the Ultra High Voltage tariff, which took effect on July 1, 2025, for existing and new data centres receiving electricity at high-voltage and extra-high-voltage levels. The tariff aims to ensure that infrastructure and electricity supply costs are borne more fairly by large-scale users.

The government has also increased the Connected Load Charge to encourage data centres to use their approved electricity capacity efficiently and discourage applications for capacity beyond actual requirements.

Fadillah said data centres must also use at least 30 per cent renewable energy based on their total electricity demand capacity. This requirement can be met through the Corporate Renewable Energy Supply Scheme and the Solar for Self-Consumption initiative.

The industry is also encouraged to develop its own electricity generation facilities to reduce complete dependence on the National Grid, he said.

He added that the Energy Commission was developing a comprehensive framework and guidelines for self-generation facilities, which would apply to data centres and other industries.