Malaysia’s data centres consumed a record 9.3% of the country's total power in August, up from an average of 7% this year, driven by hotter weather that boosts cooling needs, officials report.
- Data centres’ power share jumped to 9.3% in August from 7% average in 2026
- Malaysia aims to add 9 GW of gas-fired capacity to offset coal phaseout by 2032
- Data centres may consume up to 31% of peninsular Malaysia’s electricity by 2035
What happened
Malaysia's data centres significantly increased their electricity consumption as a result of rising temperatures, pushing their share of national power usage to a record 9.3% in the second week of August, compared with an average of 7% throughout the year. The higher heat levels intensify cooling requirements within these centres, substantially boosting their energy demand. This trend was confirmed by Siti Safinah Salleh, CEO of the Energy Commission.
Officials project that data centres could represent as much as 31% of peninsular Malaysia's entire power demand by 2035. Meanwhile, the government recognizes a need to close a 9 gigawatt capacity gap in gas-fired power generation by 2032 as the country readies to retire all coal-fired power plants by 2044, part of a strategic shift to cleaner energy sources while supporting rapid growth in data infrastructure.
Why it matters
The surge in electricity demand caused by data centres and hotter weather presents both an operational challenge and an energy policy imperative. Malaysia’s burgeoning role as Southeast Asia’s leading data centre hub attracts billions in global tech investments, including from giants like Amazon and Microsoft, underpinning economic growth but straining existing power infrastructure.
At the same time, the country's strategic energy transition—retiring coal-fired plants and expanding gas capacity—must balance immediate supply constraints, such as limited new gas-fired projects until at least 2027, with longer-term sustainability goals. Officials also note that low hydro dam levels due to heat exacerbate supply pressures, highlighting the complex interplay of climate and energy security.
What to watch next
Key developments to monitor include the government’s progress in deploying the planned 9 GW of gas-fired power generation capacity before 2032 and how this transition affects Malaysia’s energy reliability and pricing. The effectiveness of optimizing current gas-fired fleets to meet near-term demand spikes caused by heat waves will also be critical to avoid potential shortages.
Additionally, the impact of ongoing climate variability on power resources such as hydroelectric dams and the evolution of data centre energy efficiency practices may influence future demand patterns. Market observers will also watch how the power grid adapts to the accelerated data centre growth while sustaining stable supply for Malaysia’s 35 million residents.