Malaysia has hiked the connected load charge (CLC) from RM8.50 to RM89.64 per kilowatt, a dramatic 10.55 times or 955 per cent higher to deter phantom or speculative power demand by data centers, local reports said yesterday quoting Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani.
Phantom demand is power capacity reserved by developers which is then unutilised causing stranded capacity and unused infrastructure. CLC is a penalty for demand falling below the reserved demand capacity. It is calculated monthly on the shortfall between actual maximum demand (actual usage) and reference maximum demand (reserved demand).
“Tenaga Nasional Bhd (TNB) would have already planned its infrastructure and allocated capacity to accommodate full declarations, leaving unused megawatt capacity that could otherwise support other users,” Johari reportedly said at an event in Kuala Lumpur.
Last month, Parliament was informed about the hike, however, the revised rate and effective date were not mentioned.
TNB, Malaysia’s electricity utility still shows the old rate on its website at press time. w.media reached out to TNB to confirm the new rate and its date of implementation but has yet to receive a reply to date.
Malaysia has also established a new ultra high voltage tariff category which requires developers or operators to fully bear the cost of transmission upgrades.
Data center investment in Malaysia has seen exponential growth surging from 0.4 per cent of total approved investments of RM1.25bil in 2021 to 43.9 per cent or RM95.8 billion in 1H 2026. The country, which is enroute to becoming the biggest data center hub in Asia (ex China) has approved 117 data centers which has a combined maximum energy demand of about 23,500 megawatts (MW).
Out of 117 approved data centers, 55 are operational, 19 are under construction, 16 are approved but yet to start, and 27 have been approved for off-grid energy supply. About 24 applications are still waiting for approval.