KUALA LUMPUR: Malaysia plans to introduce a separate wholesale electricity market for large power consumers including data centres by 2029 or 2030, said the Energy Commission.
Its director of market, regulation and planning division Rumaizi Abdul Halim said the proposed market will cater to large electricity consumers.
Existing single-buyer market serving households, factories and commercial premises will remain unchanged.
“The government’s plan is that we should allow the development of data centres, but we should not allow them to have a direct impact on the cost of energy to other industries,” he said during a panel discussion on “Powering Malaysia’s Digital Economy: Renewable Energy and Data Centre Roadmap” at the Bursa Malaysia Sectoral Series: Powering the AI Era.
The discussion was moderated by Bursa Malaysia head of carbon market Dr Wei-nee Chen.
Rumaizi said the growing electricity demand from large companies is sufficient to support the introduction of a separate wholesale market.
He said the two markets will operate under a single market framework, although further details on how they will interact have yet to be explained.
“We can discuss in greater detail how the two markets will interact and operate together in a separate session. However, both markets will ultimately be operated by a single market operator,” he said.
Meanwhile, Rumaizi said data centres could be developed within 12-24 months, while power generation projects typically take four to five years, potentially extending to six or seven years due to equipment supply constraints.
He said the difference in development timelines poses challenges to electricity supply planning as demand from data centres continues to grow.
Sustainable Energy Development Authority Malaysia director of strategic planning division Nor Azah Masrom said timely execution and commissioning of renewable energy projects are crucial to meeting rising electricity demand.
She said lengthy approval processes, financing requirements and grid connectivity remain among the key challenges facing renewable energy developers.
“For example, an environmental impact assessment can take up to three years for approval, followed by another two years for construction,” she said.
Malaysian Investment Development Authority director of business services and regional operations Noorzita Mohamad Nor said the agency is focusing on ensuring that data centre investments generate greater benefits for the domestic economy.
She said recent data centre investment approvals have incorporated a 30 per cent local content requirement to create more opportunities for Malaysian manufacturers and service providers.
“When local companies become suppliers to data centres in Malaysia, they could also have opportunities to supply the operators’ facilities overseas,” she said.