Malaysia’s Data Centre Boom Pushes Operators Toward Self-Generated Power

Kuala Lumpur, 3 October 2026 – Malaysia’s expanding data-centre industry is moving closer to an energy model in which large operators generate part of their own electricity, as policymakers seek to protect grid reliability while accommodating rapid growth in artificial intelligence and cloud infrastructure. The shift could open a new investment cycle in power generation, gas supply, renewable energy and grid services, while raising difficult questions about cost, emissions and regulatory responsibility.

The scale of expected demand explains the policy pressure. Data centres are projected to consume 73,274 gigawatt-hours of electricity in 2035, equivalent to 31% of national demand, compared with 10,544 gigawatt-hours or 7% in 2026. Peninsular Malaysia’s peak electricity demand is forecast to rise from 21.3 gigawatts in 2026 to 33.5 gigawatts by 2035, representing a compound annual growth rate of about 5.1%.