Malaysia will need about 9 gigawatts of new gas-fired power capacity by 2032 as electricity demand rises, with the rapid expansion of data centres adding to pressure on the country’s power system.
Data centres accounted for a record 9.3% of Malaysia’s total electricity consumption during the second week of August. That was higher than their average share of about 7% so far this year. Hotter weather has added to demand by increasing the power needed to keep servers and other equipment cool.
The pressure is expected to grow further. Data centres could account for as much as 31% of electricity demand in Peninsular Malaysia by 2035, according to projections.
Malaysia has emerged as Southeast Asia’s fastest-growing data-centre hub, attracting major investments from global technology companies including Amazon and Microsoft. The expansion is taking place as the country prepares to retire all of its coal-fired power plants by 2044.
Economy Minister Akmal Nasrullah Mohd Nasir said new gas-fired generation would be needed to support the transition while meeting rising demand. Malaysia plans to rely on domestic natural gas resources as it expands its power capacity.
No new gas-fired plants are expected to begin operating this year or next. Authorities are instead looking at ways to optimize existing generating units until the end of 2027.
Hot weather is creating further challenges by lowering water levels at dams and affecting hydropower generation. Despite the rise in electricity consumption, officials and industry consultants do not expect immediate shortages, saying current demand remains within the grid’s planning assumptions.
