Developing sustainable water, energy, and resources sectors for Malaysia’s booming data centres

S. Piarapakaran

8 November 2024 at 7:22 pm·4-min read

"Developing sustainable water, energy, and resources sectors for Malaysia’s booming data centres"

Malaysia’s policies are not holistically streamlined to mitigate the environmental challenges faced by its water, energy, and resource-intensive (WERII) sectors. When the federal and state governments open their doors for investment in these industries, they must also ensure there are adequate measures to keep this sector operating sustainably.

Data centres are becoming an emerging industry to boost the global shift towards a more sustainable economy, as well as enhancing digitalisation.

However, data centres are known to be energy- and water-intensive operations. By 2030, it is projected that Malaysia will have more than 2000MW (megawatt) capacity for data centres.

This represents a significant share of electricity demand. In addition, every 100MW of data centre capacity will require, on average, 4 million litres per day (MLD) of water supply for cooling purposes. Thus, water demand for data centres may exceed 80 MLD by 2030.

Will this industry pose a huge risk to our water and electricity sectors?

According to 2023 official data, non-revenue water (NRW – treated water that is lost in the water supply system) stands at 5,524 MLD or 34.6 per cent for Peninsular Malaysia and Labuan. Selangor (including Kuala Lumpur and Putrajaya) recorded 1,450 MLD or 27.8 per cent, and Johor 485 MLD or 25 per cent of NRW in the same year.

These two states will attract most of the data centres, and reducing their respective NRW will help meet the water demand required by data centres.

According to the NRW target set by Suruhanjaya Perkhidmatan Air Negara (SPAN), NRW is expected to drop to 25 per cent in 2025, the same target that was missed in 2020. Therefore, it is timely that the federal government reactivates the NRW reduction task force and strictly implements the NRW reduction action plan we championed a decade ago.

Cooling is a vital component for keeping data centres operating at optimal conditions, and water is the primary fluid used for this purpose. Global data centre efficiency data indicate that Water Usage Effectiveness varies, and old data from a 2011 study points to 1.8 litres/kWh water usage for cooling. The complexity arises from the use of water from different sources and types, including the reuse and recycling of water.

As for the energy-guzzling side of data centres, Power Usage Effectiveness (PUE) is used to measure the efficiency of data centre operations.

In Malaysia, the PUE is set at 1.6, compared to Singapore at a stricter level of 1.3. Thus, there is room for improvement in PUE in Malaysia.

As more data centres begin to operate in Malaysia, they will increase the baseload profile for energy demand in Peninsular Malaysia in particular. The nature of data centre operations is 24/7, and any attempt to connect to renewable energy also poses risks.

Renewable energy has intermittent risks and is not a reliable baseload supply unless substantial investments are made to improve energy storage facilities that can guarantee a continuous renewable energy supply for data centres, which involves high capital expenditure.

At present, fossil fuel power plants are on standby for renewable energy power plants to operate in Malaysia. Therefore, this situation makes current renewable energy operations not truly fossil fuel-free.

The government can assist this fast-growing sector to operate seamlessly in Malaysia through these initiatives:

i. Legally binding and voluntary approaches to increase the energy efficiency of data centres must be developed. This includes keeping PUE data on a par with regional peers;

ii. Develop future-proof sustainable policies and guidelines tailored to data centres and other WERII sectors;

iii. Water efficiency can be mandated using the Water Services Industry Act 2006 (WSIA). This can include water reuse, recycling, and optimising water use for cooling. These approaches can be tailored to data centres and other WERII sectors; and;

iv. Improving alternative sustainable and durable cooling and coolant technology is another important area of research and development that may have cross-sectoral benefits.

It is of utmost importance that the approaches derived and undertaken by the government to encourage data centres and other WERII sectors must not include any attempt to socialise the cost of attracting new investors to the economy and the people.

S. Piarapakaran is president, Association of Water and Energy Research Malaysia, and chief executive officer, Centre for Water and Energy Sustainability.

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