Johor looks set to conquer a potential water crunch, judging by current initiatives taken by both the state and private sector.
Perception is a powerful force – it can be both constructive and destructive. It can shape policies for better or worse. And Johor is facing a major perception problem right now from local communities. This is evidenced by recent viral allegations that water supply disruptions in Pontian and Simpang Renggam districts were linked to data centre development when in fact there were no such developments there, as clarified by Johor State Work, Transport, Infrastructure and Communications Committee chairman Mohamad Fazli Mohamad Salleh. The water supply disruption was an ongoing scheduled event due to a prolonged drought which had depleted the level of raw water source, he said.
Even so, there is widespread perception that the state’s water supply will be adversely affected, if not now, then in the future. The narrative goes that the proliferation of data centers in Johor would eventually put pressure on the municipal water supply system meant for community use. Hence, every time there is any water supply disruption, fingers are immediately pointed at data centers. In the eyes of many locals, these massive “compute houses” do not benefit them at all but instead are taking away essential public resources from them.
Fortunately, the situation has not reached crisis proportions yet. Johor, which will be the biggest data center hub in Asia (ex-China) come 2030, has quite judiciously taken note of how other data center hubs are dealing with the tight water supply situation.
To put in perspective, the situation in Johor is more of a potential water distribution issue and not an actual shortage per se, as noted by Lee Ting Han, Johor’s state executive councillor for investment and trade. “It’s not the sufficiency, it’s the management … how to make sure that water is channelled to the right place,” he told the state assembly.
As a pre-emptive measure however, Johor has started to implement precautions at the outset which is at the application stage. It has set up a Special Technical Committee to vet data centre development applications. Each project will be assessed holistically, especially water and electricity supply requirements, and utility issues. It will be a comprehensive assessment by the committee which includes looking into the location (site suitability) and the development cluster.
Mohamad Fazli believes that in 10 – 20 years’ time, a major risk will not originate from a single data center, but from the cumulative effect of multiple data centers in clusters operating simultaneously. “When development of water-intensive facilities occurs in clusters, it will inevitably place significant pressure on the state’s utility systems,” he reportedly said. “Water and energy supplies that appear sufficient at present can be at risk when disruptions occur, such as during extreme weather, rapid development or interruptions at water treatment plants.”
Approvals will hinge on fulfilment of all the criteria including any additional conditions that the committee imposes to ensure sustainable development of data centers in the state. Incidentally, there have been many proposals submitted to the state to control data center development – among them are setting development capacity ceiling, long-term impact assessments including taking into account 10- to 20-year projections, potential droughts, population growth, non-revenue water rates and the needs of other sectors.
Practical Solutions
The best solution, from the point of view of the state, is for data centers to simply build their own facilities or invest in securing their own water sources, including exploring the potential of groundwater. The rationale is that this should be part of the capital and operating expenditure of data centers which typically save a lot on labour costs due to its low need for manpower.
This is not to hinder investment but rather to ensure that data centre development in Johor takes place in a more balanced, responsible and sustainable manner, Mohamad Fazli explains. Moreover, this approach is also in line with the principle that the polluter or beneficiary who reaps economic benefits from development should bear the costs of the additional impact on natural resources.
The good news is several data center developers and operators in the state have already put that into action – a prime example is Bridge Data Centre’s water reclamation plant which treats sewage effluent which is then piped to its upcoming Ulu Tiram hyperscale data center. Using reverse osmosis similar to Singapore’s Newater technology, the plant currently processes five million litres of water daily, with plans to expand to 20 million litres depending on demand.
Other data centers using alternative water sources include DayOne, Computility Technologies, a subsidiary of Beijing-based Zzdata Technologies Private Limited, and AirTrunk. Alternative water sources include treated wastewater, treated river water, and water from rain harvesting. Currently, Indah Water Konsortium Sdn Bhd, in collaboration with Johor Special Water Sdn Bhd, is supplying 12 million litres of treated effluents from 13 waste treatment plants, a day to data centres in the state, according to reports.
In terms of design, data centers could also pivot to a waterless or low water usage solution although retrofitting older data centers will come with additional costs.
State Initiatives
Johor is not just relying on the private sector; it has taken the bold step of banning Tier 1 and 2 data centers in November, saying these consumed too much water compared to higher-tiered data centers which are more water-efficient. Additionally, it has told data centers using evaporative or water-intensive cooling systems that they have had to wait until 2027 for their water supply request to be approved. Since August, Johor has also raised its water tariffs for industrial and high volume users reflecting the latter’s outsized consumption compared to residential use.
Furthermore, Johor is rushing the construction of two water treatment plants to meet the rising demand. To be completed within the next two years, the plants are located at Semanggar Plant Package (50 MLD) for the Kulai and Sedenak areas; and the Layang 2 Phase 2 plant (160 MLD) for the Johor Bahru and Iskandar Puteri areas. Two others, namely Semangar 3 and Kayu Ara Pasong, are currently at the conceptual and detailed design stages. They have a combined capacity of 290 MLD and will supply to Johor Baru, Kulai and Pontian.
The state currently hosts 48 water treatment plants with a total design capacity of 2,352 MLD. According to experts, a data centre with a capacity of 100MW uses about 4.16 MLD for cooling, equivalent to the daily water usage for a town of 10,000 people.
The state now hosts 17 operational data centers with about 11 under construction bringing the total capacity to possibly more than 5GW by 2030 (by then, about 48 will be fully operational). Cooling them, as per experts’ estimates, might require about 675 million cubic metres.
Possibly, the most positive outcome from this potential water constraint scenario is that more and more data center operators will start investing in water treatment or more sustainable methods to reduce their reliance on municipal supply. Johor can look forward to more ESG-compliant data centers which would help in managing the huge water and power consumption needs of the over 51 data centers the state has approved as of November 2025.
This article was originally published in w.media’s Issue 12, cloud & datacenters magazine.