In April this year, the International Energy Agency (IEA) projected that data centres will use more than twice as much electricity worldwide by 2030 than now, around 945 terawatt-hours (TWh). This is five times the annual energy consumption of Malaysia, greater than that of Brazil, Germany, France and Canada and just below that of Japan.
This massive surge in electricity demand is driven largely by artificial intelligence (AI) which although still growing, is already commonplace in many applications in education, medicine, and business and even on our mobile phones in apps for shopping, taxis, holiday bookings, internet searches and more.
With AI and the data centres that support it expected to continue to grow, the use of carbon-intensive forms of energy, especially oil and gas generated electricity, will fill the immediate demand resulting in a surge in carbon emissions until cleaner energy alternatives arrive.
Against this background, the role of technology companies, which are a key industrial powerhouse of Malaysia, will face increasing scrutiny not just from environmentalists but from policymakers and the general public concerned about their capture of cheap reliable energy on which we all rely.
Companies such as Micron located at the centre of Malaysia’s semiconductor hubs in Penang, and Johor are already not just beginning their sustainability journey but leading among global peers. Their environmentally sustainable buildings have LEED® certification from the US Green Building Council (USGBC) verifying design, construction and operations.
The core of sustainability for semiconductor manufacturers is in energy efficient operations, reducing carbon emissions and minimising waste and water use, through water recycling for example.
The government supports energy efficiency initiatives and the adoption of renewable energy through the Green Electricity Tariff (GET) partnerships with Tenaga Nasional Bhd (TNB), and the recently announced Corporate Renewable Energy Supply Scheme (CRESS) is a step in the right direction.
As part of its Net Zero target in line with the national agenda, Micron has achieved 100% renewable energy adoption using carbon offsets and a solar partnership with TNB and Solarvest, a Malaysian solar photovoltaic (PV) multinational listed on Bursa Malaysia. This has eliminated 175,381 metric tons of carbon emissions annually, equivalent to removing 35,076 passenger cars from the road.
Energy efficiency in products and services especially chips and technology infrastructure is also a key sustainability strategy that must be adopted by Malaysian semiconductor players.
To support these efforts sustainability must be integrated into the National Semiconductor Strategy (NSS) which aims to create 10 Malaysian companies with revenue of US$1 billion and another 100 with RM1 billion annual revenue. There are about 10 semiconductor-related technology companies at around RM1 billion in Malaysia at the moment.
The NSS must ensure that these world-leading Malaysian semiconductor companies are meeting international energy standards and promoting energy efficient products for the global market. Existing partnerships provide strong case studies from which lessons can be learned and shared.
While these are important sustainability strategies, access to carbon-free energy will also be essential for the semiconductor sector to compete internationally. This is where the National Energy Transition Roadmap (NETR) comes in which aims to reach net zero and 70% renewable energy (RE) capacity by 2050, with intermediate targets of 31% by 2025 and 40% by 2035.
This will leverage energy efficiency, renewable energy, hydrogen, bioenergy, green mobility and carbon capture, utilisation, and storage (CCUS) and includes innovations like floating solar farms, EV charging infrastructure, and hydrogen production.
These will help improve access to clean energy for the semiconductor industry and support sustainability and energy efficiency partnerships between Malaysian semiconductor companies, the government and the clean energy providers to maintain Malaysia’s global competitive advantage and attract greater investment from existing multinational investors.
The views expressed are those of the writer and do not necessarily reflect those of FMT.