Data centres to guzzle one-third of Malaysia’s electricity by 2035, govt taking measures to ensure supply

KUALA LUMPUR (July 2): Data centres are expected to consume one-third of Malaysia’s electricity supply by 2035 and the government is taking steps to ensure stable and reliable power.

Electricity consumption by data centres is expected to rise to 73,274 gigawatt-hours of projected national electricity supply by 2035, according to data from the Ministry of Energy Transition and Water Transformation. That compares to just 7% or 10,544 gigawatt-hours consumed at present day.

“The rapid development of the AI and data centre industry has led to an increase in the peak demand of the national electricity supply system,” Minister Datuk Seri Fadillah Yusof said in a written parliamentary reply.

Peak demand in Peninsular Malaysia is projected to grow at a compound annual growth rate of 5.1% from 2026 to 2035, rising from 21.3 gigawatts in 2026 to 33.5 gigawatts by 2035, he said.

Measures being implemented by the government, together with the Energy Commission, include extending operation of existing thermal power plants as a short-term solution and an open bidding process to add gas-based generation capacity, said Fadillah, who is also a deputy prime minister.

He also listed measures allowing data centres to purchase renewable energy directly from private developers via the Corporate Renewable Energy Supply Scheme, and large-scale solar projects programmes.

The government also encourages data centres to generate their own electricity based on their respective electricity demand requirements and not depend entirely on the grid, he said. “Data centres can reduce their reliance on the grid, thereby ensuring its continued stability.”

Fadillah noted that the government, via the Data Centre Task Force, also adopts a stringent screening approach for new data centre applications, as well as applications for the expansion of existing data centre capacity.

“This strategic coordination is carried out systematically to support the development of the national data centre ecosystem in a more sustainable, competitive, strategic and investor-friendly manner,” he said.

Approval for new data centre applications will only be granted if they are in line with local grid capacity planning, without compromising the safety and security of electricity supply, Fadillah added.

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