Govt reviewing water, power supply needs of data centres

There have been widely reported concerns that the surge in data centre investments in Malaysia could strain water and electricity supplies, hitting nearby residents the hardest. (Envato Elements pic) PETALING JAYA: The government is reviewing the actual need of data centres for electricity and water supply so that they do not burden residents, especially if the investments do not adequately benefit the country.

Deputy energy transition and water transformation minister Abdul Rahman Mohamad said the review would ensure that the power demand of data centres matches actual consumption and does not result in excess capacity, which ultimately burdens consumers.

Rahman told the Dewan Rakyat that there were already some facilities requesting a much higher capacity than their actual needs.

"We are reviewing the actual needs of data centres. We do not want the excess capacity allocated to these data centres to end up not being used (and going to waste).

"There are some data centres that, to me, aren't yielding many benefits. They have to be reviewed, too," he said in response to a question from Tuan Ibrahim Tuan Man (PN-Kubang Kerian).

There have been widely reported concerns that the surge in data centre investments in Malaysia could strain water and electricity supplies, hitting nearby residents the hardest.

Research analysts previously estimated that electricity demand from data centres is expected to exceed 5,000 MW by 2035, while Tenaga Nasional Bhd has received applications for 11,000 MW, equivalent to 40% of West Malaysia’s existing installed power-generation capacity.

Three months ago, deputy prime minister Fadillah Yusof said data centre operators might be fined if they ask for more water or power than they need.

The energy transition and water transformation minister said Putrajaya wanted to prevent "phantom demand", where companies reserve large amounts of water or electricity but do not fully utilise them.

Rahman suggested that data centre operators set up independent power producers to reduce the burden on the national power grid.

He nonetheless said the government would seek a balance between investors' needs and the interests of domestic users.