Malaysia sets minimum 30 per cent renewable energy requirement for data centres

Malaysia’s Energy Commission is drawing up rules for data centres to generate their own electricity and use renewable power, Deputy Prime Minister Datuk Seri Fadillah Yusof told the Dewan Rakyat on October 28. The work follows a government decision requiring renewables to account for at least 30 per cent of the sector’s energy use.

Fadillah said operators were encouraged to install solar generation for their own consumption, with the aim of limiting electricity supply cost increases for other users and reducing reliance on the national grid. They were also encouraged to obtain renewable electricity directly through the Corporate Renewable Energy Supply Scheme.

He said data centres needed backup generators that could help manage demand when the grid was under strain, especially during critical periods or when operating reserves were low. He was answering Wan Ahmad Fayhsal Wan Ahmad Kamal’s question about protecting public electricity and water supplies during droughts or disruptions.

Applications for electricity connections undergo technical scrutiny by the Energy Focus Group before reaching the Data Centre Task Force, Fadillah said. The assessment considers available power capacity, transmission and distribution networks, and required infrastructure investment.

As of August 2026, data centres had contracted demand of 2,346 megawatts (MW), compared with actual consumption of 1,374 MW, or 58.5 per cent, he said. Estimates submitted for supply contracts did not necessarily match subsequent usage.

On nuclear power, Fadillah said the government was still considering it as an energy source, prioritising national readiness, supply security and public safety. International agreements needed to be addressed first, alongside International Atomic Energy Agency standards, safety regulation, workforce capacity and the suitability of the technology.