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Malaysia
This Week in AsiaEconomics

Malaysia’s gas-guzzling data centre boom clashes with its clean energy goals

Across Malaysia, dozens of data centres hum around the clock, powered by electricity that increasingly comes from gas-fired turbines

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A gas-fired power plant in Melaka. Gas-fired power generation has surged in Malaysia, driven by data-centre growth, electrification, climate stress and electric-vehicle uptake. Photo: Shutterstock
Ushar DanieleandIman Muttaqin Yusof
Malaysia has staked its economic future on becoming Southeast Asia’s data-centre capital. It has also promised to slash fossil fuel use by 2050. Right now, those two ambitions are pulling in opposite directions – and gas is winning.

There were 54 operational data centres across Malaysia by the end of 2024, with that number expected to rise to 81 by 2035, government minister Akmal Nasrullah Mohd Nasir told parliament last year.

In the handful of years from 2021 and mid-2025, some 144.4 billion ringgit (US$36.3 billion) in data-centre and cloud-computing investments were approved by the Malaysian Investment Development Authority, reflecting landmark pledges from AI hyperscalers including Microsoft, Google and Amazon Web Services.

A data centre under construction in Malaysia’s Johor state. There were 54 operational data centres across Malaysia by the end of 2024. Photo: AP
A data centre under construction in Malaysia’s Johor state. There were 54 operational data centres across Malaysia by the end of 2024. Photo: AP

All those server racks humming around the clock require massive amounts of energy to stay functional and cooling to prevent their component parts from overheating. Increasingly, the power they need is coming from gas-fired turbines.

Gas-fired power generation surged 50.5 per cent year on year in April – its fastest annual pace in at least eight years – hitting a record 5.54 terawatt-hours, data from Malaysia’s Grid System Operator showed.

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