Malaysia data center growth drives RM93 billion solar investment demand

The rapid expansion of the data center industry in Peninsular Malaysia is projected to drive a massive surge in electricity demand. According to a research note from CIMB Securities, electricity consumption by data centers is expected to jump from 10,544 GWh in 2026 to 73,274 GWh by 2035.

To meet this demand and support renewable energy targets, an estimated RM93 billion investment is required to develop approximately 24.3 GW of new solar capacity between 2026 and 2035. Of this capacity, roughly 20.2 GW is expected to be paired with Battery Energy Storage Systems (BESS). The cost for solar capacity equipped with battery storage is estimated at RM4 million per megawatt.

Data center electricity usage is forecasted to rise from 6 percent of Peninsular Malaysia’s total demand in the first half of 2026 to 31 percent by 2035. Tenaga Nasional Bhd. (TNB) has already signed electricity supply agreements with 61 data center projects, representing a maximum demand of 8.35 GW, with dozens more projects currently in the approval pipeline.