Malaysia stands as the top destination in Southeast Asia for electricity-guzzling data centre investment, with a raft of new and emerging investments that will hit nearly 1,000 megawatts (MW) in five years, market insiders said.

Sharen Kaur

KUALA LUMPUR: Malaysia stands as the top destination in Southeast Asia for electricity-guzzling data centre investment, with a raft of new and emerging investments that will hit nearly 1,000 megawatts (MW) in five years, market insiders said.

From just 113MW of take-up in 2022, the capacity is expected to hit more than 900MW in phases over the next five years due to lower land, energy and labour costs compared to neighbouring Singapore, they added.

So far, six new data centres have been completed, which will consume about 292MW of electricity, Kenanga Research analyst Teh Kian Yeong wrote.

Tenaga Nasional Bhd had signed electricity supply agreements with eight data centres for 2,000MW of electricity, Teh said, adding that a total demand of 7,000MW of electricity from data centres was expected by 2035.

According to Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, Malaysia had received investments worth RM76 billion involving data centres between 2021 and March this year

Adrian Koh, head of the secure power division of Schneider Electric Malaysia, said the rapid expansion of data centres in Malaysia has created a high demand for skilled professionals who can design, build, operate and maintain these complex infrastructures.

However, as the demand for data centres continues to grow exponentially, a pressing issue poses a significant challenge: the talent shortage in this crucial industry, Koh said.

According to a prediction by the Malaysia Digital Economy Corporation in December 2022, the demand for such talent is projected to experience a compounded annual growth rate of 7.59 per cent annually in the next three years.

A report by Uptime Institute indicates that by 2025, at least 2.3 million full-time staff will be required to keep data centres globally operational, with demand coming mainly from internet giants and colocation providers in Asia Pacific, the Middle East and Africa.

Koh said in today’s increasingly digitised world, data centres play a vital role in housing and managing the massive amounts of information generated by individuals, businesses and governments.

“These facilities serve as the backbone of modern technology, supporting everything from cloud computing to artificial intelligence.

“Owing to its expansive land availability and power resources, seamless global connectivity, and supportive governmental regulations, Malaysia has emerged as a strategic and ideal destination for investment in data centres,” he said.

Koh said to address the shortage of data centre talent, industry leaders must work together to improve recruitment, enhance training, and increase awareness of opportunities.

He said traditional hiring and mentorship strategies must be replaced with new approaches that leverage the latest digital transformation and innovation trends.

Individuals with backgrounds in fields like project management, logistics, customer service and even the arts can possess transferable skills that are highly applicable to data centre operations.

“By tapping into this talent pool, data centre players can access a broader range of adaptable professionals who can contribute to projects without the need for time-consuming recruitment procedures,” he said.

KGV International Property Consultants executive director Samuel Tan said in Johor, data centre developments have been the key driver for investors since the moratorium by the Singapore government a few years ago.

“It has since been lifted but is very selective in granting approval. Johor is a natural choice due to its proximity to Singapore and the abundance of land and utilities.

“However, there is a need to regulate this industry as it consumes a lot of power and water and has limited job opportunities. A master policy must be put into place to regulate it so that it is sustainable and brings tangible results to the economy and the people,” he told Business Times.