The Malaysian government has approved a minimum 30 per cent renewable energy requirement for data centers based on either total capacity or energy consumption, Deputy Prime Minister Datuk Seri Fadillah Yusof told Parliament yesterday.
He added that the Energy Commission is drafting a comprehensive framework and guidelines on the mechanism for fulfilling the 30 per cent requirement as well as for
electricity self-generation facilities for data centers. Data centers are encouraged to generate their own electricity through solar power.
Last month, industry sources have indicated that Malaysia’s Data Centre Task Force has approved 5GW of additional capacity conditional on a minimum 30 per cent renewable energy requirement. The 5GW represents about 60 per cent of the existing 8.3GW project pipeline as of June, according to a bank source which was reported by a regional publication.
“Under a capacity-matching approach, 30 per cent of the 5GW pipeline would be paired with solar photovoltaic installations on a one-to-one basis,” according to the source, adding that at an assumed project cost of RM4 million per megawatt, for solar plus storage system, the total market reaches RM9 billion – RM 36 billion depending on whether the requirement applies to nameplate capacity or actual consumption.
Underpinning the procurement model is the Corporate Renewable Energy Supply Scheme (CRESS) which allows third party renewable energy providers to sell their electricity directly to corporate buyers over the national grid.
The minister also clarified in Parliament that the system access charge for the national grid, payable by renewable energy providers under CRESS remains at 14 sen per kilowatt-hour (kWh) while users pay a separate charge of 4 sen per kWh, which was already in effect before the announcement. Both charges should not be combined into an 18 sen per kWh fee as widely reported. He added that industry players had accepted the rates as confirmed by the Energy Commission.
In September, the Energy Transition and Water Transformation Ministry introduced the 14-sen per kWh system access charge under a new package which also mandates 10-year contracts between providers and buyers. To qualify for the 14-sen per kWh rate, projects must achieve commercial operation by 31 December 2028.