Energy Ministry Reviews Data Centre Power Reservations to Protect Other Consumers

Malaysia is reviewing how much electricity data centres actually need so that surplus capacity built for them does not become a burden on other consumers, Deputy Energy Transition and Water Transformation Minister Abdul Rahman Mohamad told the Dewan Rakyat on October 13, The Star reported. He said the government wants new generation to match real demand, because data centres can reserve more power than they eventually use. “The demand from data centres is high but their actual usage is lower,” he said.

Abdul Rahman was answering Tuan Ibrahim Tuan Man (PAS-Kubang Kerian), who asked about new net generation capacity due by 2030 and the supply commitments made to data centres. In a follow-up, Tuan Ibrahim said the electricity agreements involved five-year take-or-pay contracts, and asked whether committed capacity would match demand and how the government would stop excess supply costs being passed on to consumers. He also asked how water would be secured for data centres without squeezing household and industrial users, and whether operators pay industrial or special tariffs.

The deputy minister said the ministry is studying actual usage and how data centre projects are selected, adding that some facilities might not bring enough benefit to the country despite their investment value. Data centres, he said, could be required to develop their own power supply, using options such as solar energy and battery storage, rather than relying entirely on the national grid.

What it means in practice

For operators, a review of reserved versus used capacity could change how much grid access they can lock in and on what terms, while self-generation rules would add cost but could speed up projects where the grid is tight. As of September 1, 2026, Malaysia had nearly 14,000MW of installed renewable capacity, almost 32% of the total, and the ministry expects 10,000MW to 11,000MW of scheduled renewable capacity to come online by 2030. The national targets are 35% renewables by 2030 and 70% by 2050.

The scrutiny comes as AI campuses keep arriving, including the 67MW A901 campus signed by Bitdeer AI and two Firmus AI factories anchored by OpenAI. What to watch: whether the ministry publishes revised terms for data centre supply agreements, and whether water tariffs for operators change.