By 2030, water demand from the DC sector alone is projected to surge from the current 20 million litres per day (mld) to 368 mld.
PETALING JAYA: The rise in water demand due to higher usage anticipated from data centres (DCs) in Johor will push industry players toward more usage of alternative water sources like reclaimed wastewater.
By 2030, water demand from the DC sector alone is projected to surge from the current 20 million litres per day (mld) to 368 mld, which is an 18-fold increase as facility count rises from 17 to 52, BIMB Research said.
Also, the high incidence of non-revenue water of 24.1% puts a strain on water resources in the state.
BIMB Research said even with RM4.4bil in water treatment and distribution projects and RM2.4bil in new raw water resource projects that are currently planned, Johor is still expected to face a supply shortfall of around 570 mld by 2030.
“The urgency for DCs in Johor to adopt alternative water sources such as reclaimed wastewater is underscored by the state’s rapidly evolving supply and demand dynamics,” it said.
“Without intervention, the additional load from hyperscale cooling requirements risks exacerbating supply vulnerabilities and crowding out other industrial and domestic users,” BIMB Research added.
“Scaling up reclaimed water use will require significant capital investment in water reclamation plant upgrades, dedicated pipelines and advanced metering systems,” it noted.
The build-operate-transfer funding model is expected to attract private contractors who will operate the facilities over a 20 to 25-year concession period.
“This approach offers a multi-year project flow for companies involved in civil construction, pipe manufacturing, and engineering services for specialised water systems,” BIMB Research said.
The partnership between Indah Water Konsortium and Johor Special Water agreement will see the supply of up to 12 mld of reclaimed (recycled) water to DC operators in Johor and may mark more of such investments into this sector.
“The introduction of a dedicated DC tariff band (RM5.30 to RM5.38 per cubic m) from the recently implemented new water tariff structure effective Aug 1 – with Johor specifically at RM5.33 per cubic m – provides a benchmark for an immediate monetisation framework for reclaimed water,” it said.
