Data centre operators must bear electricity, infrastructure costs, says Johari

KUALA LUMPUR: Malaysia's data centre industry is driving demand for electricity, presenting an opportunity for Petronas, said Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani. The minister explained that data centres require increasing amounts of electricity, which could create a new market for natural gas if it is supplied at market prices without subsidies.

Previously, Petronas had signed long-term gas export contracts with countries like Japan. However, with the growth of data centres, there is potential to supply gas for power generation and sell electricity at retail prices. Under such agreements, gas is sold at wholesale prices, but by providing power to data centres, Petronas can obtain market rates.

Johari emphasized during his keynote address at Bursa Malaysia's Powering the AI Era sectoral series that meeting the rising demand for electricity offers both challenges and opportunities. One potential avenue is expanding and diversifying Malaysia's energy supply, particularly through the integration of solar power with battery energy storage systems (BESS). BESS can improve efficiency and manage fluctuations in electricity supply by storing excess generation and releasing it when needed.

For instance, batteries can store energy when production exceeds immediate demand and release it when necessary. Johari highlighted the need to prioritize capital mobilization towards solutions that can support Malaysia's long-term energy requirements. Ultimately, Malaysia aims not only to attract more data centre investments but to build the necessary infrastructure for a competitive digital economy without compromising the reliability, affordability, and sustainable management of the country's natural resources.