KUALA LUMPUR: With 117 data centres worth RM385.7bil approved nationwide, the government has moved to separate their electricity requirements from those of other industries to ensure the country's growing data centre sector does not compromise power supply to existing businesses.
Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said the move was aimed at ensuring that electricity supply to between 27 and 28 other industrial sectors under Tenaga Nasional Bhd (TNB) remained a priority.
He said of the 117 approved data centres, 55 are operational, 19 under construction, 16 yet to begin construction, while another 27 are at various stages of implementation.
"There has been misunderstanding in the country regarding data centres.
"The government has taken the initiative to ensure that electricity consumption by each data centre is separate from energy requirements of the other 27 to 28 industrial sectors under TNB," he said during his ministry's winding-up speech on Budget 2027 in the Dewan Rakyat on Wednesday (Oct 28).
Johari said this was necessary to ensure that other industries continue to receive sufficient electricity to sustain their operations.
He added that electricity supplied to data centres would not be subsidised, with pricing determined by global market conditions.
"We will also ensure that every development undertaken in the country meets the requirement of at least 30% local content," he said.
Johari said the rapid expansion of data centres could also create opportunities for PETRONAS to redirect some of its natural gas resources towards electricity generation.
He said Malaysia, the world's fifth-largest gas exporter, currently exports approximately 30 million tonnes of gas annually, largely through long-term agreements with overseas buyers.
However, he said the growing electricity demand from data centres could provide an alternative market for the country's gas resources.
"With data centres operating in the country, gas supplies could potentially be used to generate electricity to meet their energy requirements while also supporting existing industries," he said.
Johari added that this could allow Malaysia to utilise more of its gas resources domestically instead of relying entirely on long-term export agreements.
He said electricity demand could reach between 23,000MW and 23,500MW if all 117 approved data centres were completed and became fully operational.
