Malaysia is rapidly expanding its data centre sector, making it a key regional player. However, experts warn that this growth may strain the country’s power and water resources.
Johor, benefiting from its proximity to Singapore, cheaper land, and supportive policies, has attracted significant investments from major companies like Microsoft, Google, and Nvidia. In 2022 alone, Johor received RM51.1 billion in data centre investments, with an additional RM17 billion expected this year, according to The Straits Times.
So the report mentions that Malaysia is currently home to 45 data centres nationwide, with an additional 44 sites in the pipeline. These data centres accommodate computing infrastructure that supports remote storage, processing, and distribution of substantial data volumes needed by entities like banks, manufacturers, or online retailers.
Despite the economic benefits, data centres’ high demand for electricity and water poses significant challenges. These facilities require substantial power and water for cooling, stressing local utilities and raising environmental concerns.
A data centre can consume approximately 100 megawatts and up to 1.1 million gallons (~4.16 million litres) of water per day for cooling purposes, equivalent to the daily water usage of a city with 10,000 inhabitants.
The industry’s growth is also driven by the US-China trade war, prompting companies to diversify into Southeast Asia. Johor’s appeal is further enhanced by Singapore’s pause on new data centre developments.
To promote sustainable growth, the chairman of the Johor Investment, Trade and Consumer Affairs Committee, Lee Ting Han stated that new data centre operators must show their commitment to using green energy hardware and software, as per reported by The Straits Times.
He further stated that new data centre projects in Johor will be evaluated based on their sustainability measures, such as power and water efficiency. Should data centre operators fail to demonstrate their use of green energy, the committee may advise against approving their construction applications.
