PUTRAJAYA, Sept 10 – Data-centre operators must commit to buying electricity and water before utilities expand capacity for their operations, said Prime Minister’s Office economic adviser Nurhisham Hussein.
Nurhisham said such commitments would give utility providers greater certainty when planning investments to increase electricity and water capacity for data-centre developments.
“Data-centre operators need to provide a commitment to purchase electricity and water,” he said during the question-and-answer session at the 2027 Selangor Budget engagement session at Le Meridien Hotel here, today.
Nurhisham said the commitment could be for around eight to ten years, allowing utility providers to make the necessary investments based on confirmed demand.
"The approach would also reduce the risk of speculative data-centre projects requesting large amounts of electricity capacity without having sufficient actual demand.
“For example, there is a risk where they request 1,000MW but their usage is only 200MW,” he said.
Nurhisham also said the additional capacity created in such cases could ultimately result in costs being borne by other electricity users in Malaysia.
He said guidelines are needed to ensure data-centre developments were supported by genuine and sustainable demand for utilities.
The issue was raised by a male participant during the interactive session, who questioned whether Selangor should use its available water and electricity reserve margins to accommodate data-centre investments and whether such projects would generate lasting economic spillovers for the state.
"Water stress is currently a greater concern in northern parts of the country compared with Selangor, particularly due to lower water levels and the impact of El Niño," Nurhisham explained.
However, he said the concerns raised about data centres and their utility requirements would be taken back for further consideration.
