KUALA LUMPUR (Oct 15): Malaysia wants data centre investors to bear the cost of transmission upgrades required by their projects rather than pass the investment to the local players.
The infrastructure costs should form part of investors’ project expenditure, with Tenaga Nasional Bhd (KL:TENAGA) advising on the upgrades needed, Minister of Investment, Trade and Industry Datuk Seri Johari Abdul Ghani told the Dewan Rakyat during question time on Thursday.
“This is our strategy to ensure that economic activities that existed before the arrival of data centres are not adversely affected,” he said.
Johari was responding to Ampang MP Rodziah Ismail (PH-PKR), who asked how the government measures data centres’ net economic contribution after accounting for their use of electricity, water, land and infrastructure, as well as incentives and the opportunity cost of national resources.
A wave of energy-intensive data centres has been surging across Malaysia amid a global boom in artificial intelligence. Tenaga Nasional, the country’s national electric utility firm, is now supplying power to 36 data centres with dozens more in the pipeline.
Johari also said data centre operators would be charged for electricity capacity committed to them even if they did not fully use it, to prevent capacity being tied up without compensation. He cited an operator securing 200 megawatts but using only half of the capacity once its facility was ready.
“The other 100MW that you do not use, we assume you have used it,” he said. “We charge you. That is our policy now.” Tenaga Nasional could not freely reallocate the unused capacity because it remained committed to meeting the operator’s future requirements, Johari explained.
All electricity requirements for data centres should also be treated separately from those of households and other industries, without subsidies, and where generation relies on gas, its market price should be reflected in the cost of supplying the data centre, Johari said.
The aim is to protect the reserve capacity needed for other economic activities, he noted.
Further, the government now wants data centre investments to generate more opportunities for Malaysian suppliers, engineers, technicians and universities.
A taskforce on data centres had agreed on a minimum 30% local content level, with greater domestic participation in construction, engineering services, cooling systems and electrical equipment.
Johari also called for Malaysian companies and universities to have access to data centres’ computing capacity for research and development, rather than allowing their benefits to accrue primarily to overseas customers.
“We want our people to be able to access the technology,” he said, adding that collaboration with universities could help Malaysia develop its own capabilities over time.
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