Malaysia’s emergence as a regional digital infrastructure hub is creating new opportunities for investment, innovation and economic growth. At the same time, it is reshaping the country’s energy landscape.
The rapid rise of artificial intelligence, cloud computing and hyperscale data centres is creating a new class of electricity demand. These facilities require large volumes of reliable power to support computing systems, cooling and critical operations. As AI adoption accelerates, the question is no longer only where data centres should be built, but how their energy needs can be met reliably, competitively and sustainably.
To fully realise the potential of digital growth energy infrastructure must scale alongside digital infrastructure. This includes renewable energy, battery storage, grid connectivity and broader system planning.
A changing energy equation
“Digital expansion and the energy transition can no longer progress separately.”
AI and hyperscale data centres are changing Malaysia’s energy equation in two important ways.
The first is volume. Data centres are energy-intensive facilities, and their growth is expected to increase electricity demand significantly. In 2025, Malaysia’s coal capacity of 13 GW generated 87.2 TWh of electricity, with utilisation averaging close to 80%. As demand rises, additional sources of generation will be required to support economic growth while managing the country’s decarbonisation ambitions.
The second is the changing load profile. Some data centre facilities require steady, continuous power, while AI workloads such as training and inference can introduce new demand patterns that place greater pressure on energy systems.
This is increasing the importance of solutions such as Battery Energy Storage Systems (BESS) which can enhance grid stability, support renewable energy integration and improve reliability for energy-intensive operations. As battery costs decline and deployment models mature, integrated renewable energy and storage solutions are becoming increasingly viable for large energy users.
Data centres are buying certainty, not just electricity
For data centre operators, energy is no longer simply an operating cost. It is a strategic requirement that underpins uptime, performance and long-term business competitiveness.
As digital infrastructure expands, operators are seeking more than energy supply. They are looking for confidence that energy will be available when needed, at a predictable cost and with the reliability required to support always-on operations.
This is creating a growing need for what can be described as energy certainty - confidence in supply, price and performance over the long term.
Supply certainty addresses whether sufficient energy can be delivered when required, particularly as electricity demand continues to grow. Price certainty provides greater visibility and predictability over long-term operating costs, supporting investment and business planning. Operational certainty ensures energy systems can deliver the reliability and resilience required for mission-critical digital infrastructure.
As AI adoption accelerates, energy certainty is becoming a key enabler of digital growth and investment.
Why clean energy matters for data centres
“For data centres, power is not simply an input cost. It is central to reliability, competitiveness and long-term sustainability.”
Data centres sit at the intersection of energy intensity, operational reliability and decarbonisation. For operators, power is not simply an input cost. It is central to business continuity, customer commitments and long-term competitiveness.
Many global technology companies have set renewable energy and net-zero commitments, increasing demand for credible clean power solutions across the markets in which they operate. At the same time, countries that can provide reliable access to cleaner energy are likely to be better positioned to attract long-term digital infrastructure investments.
For many data centre operators, the conversation is also evolving beyond emissions reduction alone. Clean energy is increasingly viewed as a means of strengthening operational resilience, supporting customer sustainability commitments and improving long-term cost predictability. In an environment where energy demand is growing and volatility remains a concern, access to reliable clean energy can become a source of competitive advantage.
Renewable energy also has an important role to play because of its deployment potential. In many cases, renewable energy projects can be deployed faster than conventional generation alternatives, making them increasingly important in supporting fast-growing sectors such as data centres.
However, renewable energy alone is not enough. Digital infrastructure requires high levels of reliability and uptime. This means the next phase of clean energy development will need to focus not only on generation, but also on storage, grid integration, system design and long-term operational performance.
Integrated solutions for a more complex demand landscape
As energy needs become more complex, large energy users are seeking solutions that go beyond individual assets or standalone procurement. For data centre operators, decarbonisation often involves renewable electricity, energy efficiency, cooling optimisation, compliance and reporting mechanisms, and system reliability.
This is where integrated clean energy solutions become increasingly important.
Gentari supports customers through its Decarbonisation-as-a-Service (DaaS) approach, bringing together technical, financial and operational pathways into a coordinated decarbonisation journey. This includes understanding customer needs, designing fit-for-purpose solutions, deploying the required systems, monitoring progress against decarbonisation goals, providing ongoing optimisation and long-term operations and maintenance support.
For data centre operators, such an approach can help reduce complexity. Rather than navigating multiple disconnected providers and solutions, customers can work towards a more structured pathway that supports emissions reduction while maintaining reliability and cost certainty.
In Malaysia, frameworks such as the Corporate Renewable Energy Supply Scheme, or CRESS, are also helping to expand access to grid-connected renewable electricity. By allowing corporations to procure renewable electricity directly from licensed suppliers, CRESS can support project bankability and create a clearer route for large energy users to access clean power at scale.
Gentari’s role in supporting scalable clean energy
Gentari’s role in this space is to develop and deliver scalable clean energy solutions that support large energy users, including data centre operators and other Commercial and Industrial customers.
In Malaysia, Gentari’s collaboration with Gamuda to develop approximately 1.5 GW of solar photovoltaic capacity paired with battery storage under the CRESS framework reflects the type of cross-sector partnership needed to support hyperscale demand. By combining renewable energy development, infrastructure expertise and project delivery capabilities, such collaborations can help accelerate the deployment of large-scale clean energy solutions.
Gentari also brings regional experience to support customers with renewable energy procurement and decarbonisation. Globally, Gentari has more than 9.1 GW of renewable energy capacity installed and under construction globally. In India, Gentari signed an 80 MW wind power purchase agreement (PPA) with Amazon Web Services (AWS) in 2025, supporting AWS’ renewable energy and net-zero ambitions. For Commercial and Industrial customers in Malaysia, including Telekom Malaysia (TM)’s data centres, R&D facilities and university campuses, Gentari’s solar PPAs demonstrate how tailored, site-specific solutions can support operational decarbonisation.
These efforts reflect a broader shift: clean energy solutions for data centres will need to be scalable, customer-specific and increasingly integrated across technologies and markets.
Infrastructure readiness beyond generation
One of the main challenges in supporting data centre growth is the mismatch between digital infrastructure timelines and energy infrastructure timelines.
While renewable energy capacity often receives the greatest attention, the ability to support large-scale digital infrastructure depends on a much broader set of energy system capabilities.
Transmission networks, grid connectivity, battery storage, system balancing and dispatchable capacity all play critical roles in ensuring reliable electricity supply. The challenge is no longer simply how much renewable energy can be built, but whether energy systems can deliver the clean power where and when it is needed.
Data centres can move quickly from planning to development, particularly when supported by strong demand from cloud, AI and enterprise customers. However, longer lead time is required to integrate renewable energy projects with grid connectivity, transmission infrastructure and storage. These will involve land, permitting, interconnection, financing, engineering and long-term offtake structures.
This underscores the need for more forward-looking planning. Energy considerations are already being incorporated earlier into data centre development, rather than treated as a downstream procurement issue. This includes understanding the customer’s load profile, identifying renewable energy supply options, assessing storage requirements and coordinating with grid development plans.
Regulatory certainty is also important. Stable and well-signalled frameworks can help strengthen confidence, support bankability and encourage wider adoption of clean energy solutions. At the same time, integrated solutions can help meet near-term needs while broader grid infrastructure continues to develop. Behind-the-meter solutions, hybrid systems and renewable energy paired with storage can support reliability and decarbonisation, depending on each customer’s operating requirements and the relevant regulatory framework.
Partnerships will define the next phase
The sustainable growth of data centres will depend on collaboration across the ecosystem. Energy developers, infrastructure players, technology companies, policymakers, regulators, utilities, landowners, cooling specialists, financial institutions and customers each have a role to play in building the energy systems required to support future demand.
Some of the most effective partnerships may cut across traditional industry boundaries. The collaboration between Gentari and Gamuda is one example, pairing clean energy development with large-scale infrastructure and project delivery capabilities. As data centre energy needs become more complex, these cross-sector models are likely to become more important.
Government collaboration will also remain critical. Market mechanisms alone may not be sufficient to drive renewable energy adoption at the scale and speed required. Continued coordination on grid planning, permitting, investment frameworks and skills development will be important to ensure that Malaysia’s digital infrastructure growth translates into broader and more sustainable economic value.
As countries across Asia Pacific compete for digital infrastructure investments, access to reliable clean energy, transparent regulatory frameworks and long-term energy certainty will become increasingly important differentiators.
Towards integrated digital and energy planning
“Malaysia’s digital infrastructure opportunity will depend on scaling clean energy infrastructure in step with rising demand.”
Malaysia is well positioned to strengthen its role as a regional digital infrastructure hub. However, sustaining that growth will require more than attracting data centre investments.
It will require clean energy infrastructure, enabling policies and ecosystem partnerships that can support rising demand over the long term.
As AI adoption accelerates, digital and energy infrastructure can no longer be planned separately. Future projects will increasingly require energy supply, storage, grid connectivity and operational resilience to be considered from the outset.
The countries that succeed will not simply be those that attract digital investments. They will be those that can provide the energy certainty, infrastructure readiness and ecosystem collaboration needed to support long-term growth.
In this environment, clean energy is no longer just part of the sustainability agenda. It is becoming a foundational enabler of Malaysia’s digital future.