Govt mulls requiring data centres to manage own water supply

PARLIAMENT | The government may require data centres to manage their own water supplies to prevent disruptions to domestic and industrial consumers, said Energy Transition and Water Transformation Deputy Minister Abdul Rahman Mohamad.

He said data centres’ water consumption remained a concern, particularly for facilities near water bodies that could affect supplies for other users.

“For instance, in cases where data centres are located near pools or reservoirs, we could require them to source water solely for their own operations rather than for commercial resale.

“This is so that it does not adversely affect other consumers. We are constantly reviewing this issue and action must indeed be taken,” he said in the Dewan Rakyat today.

Abdul Rahman was responding to Tuan Ibrahim Tuan Man (PAS-Kubang Kerian), who asked how the government allocated water capacity to data centres without compromising domestic and industrial demand.

Data centre power needs

Tuan Ibrahim (below), who is a former environment and water minister, also asked whether electricity allocations reflected actual demand or risked resulting in excess capacity.

Abdul Rahman said the Energy Commission was reviewing electricity demand projections to ensure new generation capacity matched actual needs, noting that some data centres might reserve more electricity than they eventually used.

"The (energy) demand from data centres is high, but their actual usage is lower. This thus becomes a burden," he said.

He also proposed requiring data centres to develop their own power plans, allowing them to choose their energy sources.

“Demand is indeed high, particularly in the southern region. I have also proposed that they provide their own independent power plans, with the choice of methods such as solar, batteries, or others left to them,” he added.

Previously, Investment, Trade, and Industry Deputy Minister Sim Tze Tzin said the government would approve data centre projects only after ensuring sufficient electricity and water supplies for domestic and industrial needs.

Bernama reported Sim (below) saying the Data Centre Task Force assesses applications based on available power and water capacity, prioritising water supplies for residents and approving projects only when surplus capacity is available.

Selective approach to data centres

Abdul Rahman also said the government needed to scrutinise the types of data centres being established in Malaysia to ensure they delivered tangible benefits to the country.

He said some facilities might not need the full resources allocated to them, while their relatively small workforces could limit employment opportunities for local communities.

Citing Singapore as an example, he said Malaysia should be more selective in evaluating data centre investments instead of focusing solely on their investment value.

He added that the government was conducting a comprehensive review to balance attracting investors with ensuring data centres met the country’s actual needs.

“We want investors to benefit, but we are also assessing whether these data centres truly meet the actual needs of our country. (Because) sometimes, there are data centers that do not actually fulfil those genuine requirements,” he said.

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