KUALA LUMPUR — Malaysia’s booming data‑centre industry is driving a sharp rise in electricity demand, forcing the government to confront a looming 9‑gigawatt shortfall in gas‑fired generation capacity by 2032, officials said on Tuesday.
Data‑centres now account for record share of power use
Energy Commission chief executive Siti Safinah Salleh told reporters that data‑centres consumed 9.3% of the nation’s total electricity in the second week of August, up from an average of 7% earlier this year. The surge reflects hotter weather that forces cooling systems to run at higher intensity.
“With the hotter weather, the cooling system requires a lot more energy,” Salleh explained, adding that the hot spell is expected to subside after early September.
Government response and long‑term plan
Economy Minister Akmal Nasir said the country must add 9 GW of gas‑fired capacity by 2032 to keep the grid reliable as Malaysia phases out coal. The nation plans to retire its final coal‑fired plant by 2044, a move that aligns with its climate commitments while relying on abundant domestic gas reserves.
“We will optimise our existing fleet to meet rising demand through the end of 2027,” Salleh said, though she did not provide details on how the optimisation will be achieved.
International investment and regional context
Malaysia continues to attract billions of dollars in investment from global tech giants such as Amazon and Microsoft, positioning the country as Southeast Asia’s fastest‑growing data‑centre hub. The influx of data‑centre projects is occurring even as the region faces a decline in gas‑fired generation, partly due to the Iran‑Ukraine war’s impact on liquefied natural gas imports.
Despite the strong investment pipeline, no new gas‑fired plants are slated to come online this year or next. The Energy Commission therefore expects to rely on existing capacity and efficiency measures to bridge the gap until new projects can be commissioned.
Hydropower also under pressure
Salleh warned that the hot weather has lowered water levels in Malaysia’s hydro dams, further tightening the supply mix and underscoring the need for diversified generation sources.
“Because of the hot weather, our hydro dams are also at very low levels,” she noted.
What this means for Malaysians
Consumers may see higher electricity rates as utilities seek to cover the cost of additional gas procurement and infrastructure upgrades. The government’s commitment to retire coal while expanding gas capacity reflects a balancing act between energy security, affordability, and environmental goals.
Stakeholders, including industry groups and consumer advocates, are watching closely to ensure that the transition does not unduly burden households or hinder the country’s digital economy growth.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
