Malaysia is expected to net RM3.6 billion in revenue from data centres by 2025, as tech giants such as Microsoft, Amazon Web Services and Google set up shop in the country, deputy communications minister Teo Nie Ching said at a cloud tech and data centre conference in August.
All this sounds good for the economy, but energy transition and water transformation minister Fadillah Yusof expects the tech boom to have a significant impact on energy consumption which must be mitigated, as electricity in Malaysia is still predominantly generated by fossil fuels.
“Number one, we need to ensure there will be security in terms of supply, (that) there will be a continuous supply of energy for the people and business.
“Number two, it has to be sustainable. We have to move into renewables. Third, it has to be affordable. That is why we have to look into the (whole) mix,” Fadillah told FMT in an interview.
For now, he said, Malaysia is focusing on solar energy – the fastest way to move the country’s migration from fossil fuels forward. As solar power only supplies energy for five hours, provision must also be made for battery storage, he said.
“By 2030, some of our coal plants will cease to operate, so we will have to move on to gas as a source of energy, including hydrogen.
“These are the things that we need to invest in to keep the lights on while adhering to our climate and environmental commitments,” he said, noting that the national target is to be carbon net zero by 2050.
Fadillah said power generation is still profitable, but the cost of doing business is going up.
“This affects the whole world actually, not just Malaysia. However, Malaysia is still one of the cheapest in terms of tariff, which is why so many people are coming here and investing.
“We are talking about multinationals, such as Microsoft and Google. We are competitive and have a well-structured legal system. We are very transparent, as far as power generation is concerned.
“Companies know what they are going to pay, as far as their tariff is concerned,” he said.
He said his role also involves upgrading the nationwide power grid.
“This also applies to Asean, because we will need each other to maintain sustainable power generation,” he said, reiterating that power must be safe and secure.
He said Malaysia hopes to collaborate with companies on new technologies and upgrading of the grid’s transmission lines.
“We’re talking about trillions (of ringgit) in terms of investment by 2050,” he said.
Fadillah highlighted as significant a recent move to enhance regional energy cooperation, with Malaysia and Indonesia agreeing to form a joint task force to boost renewable energy initiatives and advance the Asean power grid.
The task force will explore the feasibility of a joint green industry between Sarawak and Kalimantan.
It will include representatives from the Energy Commission, the Sarawak government and Tenaga Nasional Bhd, while Indonesia’s delegation will be led by a senior official at the coordinating ministry for maritime affairs and investment.
The task force will deliver a comprehensive report to Fadillah and Luhut Binsar Pandjaitan, Indonesia’s coordinating minister for maritime affairs and investment.
The report will address energy supply issues between the two countries with a particular focus on renewable energy.
Fadillah said he would consult with both the Malaysian and Sarawak governments on any proposal, adding that the task force was important to enhance regional energy cooperation.
“We aim to not only advance these initiatives at the bilateral level but also within Asean, ensuring the benefits extend beyond individual countries. The goal is to foster cooperation and mutual support among all Asean countries,” he said.