KUALA LUMPUR: The actual electricity needs of data centres are being reviewed to prevent excess capacity from becoming a burden to consumers, says Datuk Seri Abdul Rahman Mohamad.
The Deputy Energy Transition and Water Transformation Minister said the government wants to ensure new power generation matches actual demand, as data centres could reserve more electricity than they eventually use.
"The demand from data centres is high but their actual usage is lower," he said in the Dewan Rakyat on Tuesday (Oct 13).
Abdul Rahman was responding to Datuk Seri Tuan Ibrahim Tuan Man (PAS-Kubang Kerian), who asked about new net generation capacity expected to be operational by 2030 and electricity supply commitments made to data centres.
As of Sept 1, 2026, Malaysia had nearly 14,000MW of installed renewable energy capacity, accounting for almost 32% of the national total.
The government is targeting renewable energy to make up 35% of installed capacity by 2030 and 70% by 2050.
Based on announced renewable energy programmes and private-sector plans under the Corporate Renewable Energy Supply Scheme (CRESS), the ministry expects between 10,000MW and 11,000MW of scheduled renewable energy capacity to come online by 2030.
"The ministry is also reviewing data centre requirements, including their electricity and water consumption, to ensure development does not disadvantage other consumers," he said.
In a supplementary question, Tuan Ibrahim raised concerns over electricity supply agreements with data centres, which he said involved take-or-pay contracts lasting five years, questioning whether committed capacity would match actual demand and prevent excess supply costs from being passed on to consumers.
He also asked how the government would ensure sufficient water for data centres without compromising domestic and industrial needs and whether they were charged industrial or special water tariffs.
Abdul Rahman said the ministry is studying actual usage and the selection of data centre projects, adding that some facilities might not bring sufficient benefits to the country despite their investment value.
"Data centres could be required to develop their own power supply, using options such as solar energy and battery storage, rather than relying entirely on the national grid," he said.
