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Malaysia’s Push for Data Centre Sustainability

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Malaysia is positioning itself as a data centre powerhouse in Southeast Asia. The increasing demand for sustainable cloud computing, artificial intelligence (AI), and machine learning is driving this rapid growth. As the industry expands, data centre sustainability is becoming a critical consideration for new developments.

Malaysia’s Strategic Advantage

Malaysia’s strategic location, lower operational costs, and abundant land make it an ideal location for green data centre investments. In recent years, major tech giants like Google and Microsoft have invested billions in Malaysian data centre projects, prioritising eco-friendly data storage and sustainable IT infrastructure.

 

In fact, according to DC Byte’s 2024 Global Data Centre Index, Malaysia is currently the fastest-growing data centre market in Southeast Asia, surpassing even established hubs like Singapore. This rapid growth is fuelled by Malaysia’s pro-business environment and sustainability initiatives like the Green Lane Pathway, which accelerates power approval processes for eco-friendly infrastructure. Coupled with a focus on sustainable digital transformation post-pandemic, these factors have made Malaysia an attractive market for data centre investments. Currently, the country has 32 data centres, with 19 more under construction, mainly in Cyberjaya, Kuala Lumpur, and Johor.

The Environmental Impact of Data Centres

While the economic benefits of data centre investments are undeniable, there are growing concerns about their environmental impact. Data centres are notorious for their high energy consumption, primarily for cooling systems and continuous data processing.

 

A report from Kenanga Investment Bank Research indicates that electricity demand from data centres in Malaysia could peak at 5 GW by 2035. This raises concerns, as poorly planned data centre development can lead to resource inefficiency, high electricity consumption, and increased carbon emissions.

Malaysia’s Commitment to Data Centre Sustainability

To promote data centre sustainability, the Malaysian government has outlined a Planning Guideline to ensure uniform and effective implementation of key requirements across states and Local Authorities.

This guideline sets out five key principles for developing data centres, fostering a future-proof and environmentally conscious industry.

  1. Sustainable: Using energy-efficient technologies, and renewable energy sources, andimplementing efficient cooling practices to reduce carbon emissions
  1. Share: Sharing of resources and infrastructure to optimise costs and reduce operational expenses
  2. Safety: Safety considerations include employee security and data centre infrastructure, such as fire safety and emergency plans.
  3. Scalable: Ensuring data centres can adapt to evolving technology and growing storage needs
  4. Smart: Integrating advanced technologies like IoT, machine learning, and automation to boost efficiency

The Future of Data Centres

The Malaysian government and local authorities are taking steps to ensure new developments meet sustainabilitstandards. This focus on sustainability aligns with the insights presented in the EcoBusiness whitepaper, “The Future of Data Centres: A Look at ASEAN’s Next-Generation Facilities Through a Lifecycle Lens.

This whitepaper sheds light on the challenges and potential solutions for Southeast Asia’s data centre industry to achieve long-term sustainability. It emphasises the importance of examining a data centre’s entire lifecycle, from construction and operation to decommissioning, to minimise its carbon footprint.

 

ESC Group CEO, Andrew Young, echoes these sentiments, highlighting the crucial role of regulatory changes in driving data centre sustainability:

 

“Regulatory changes could pave the way for significant advancements in sustainability. Currently, the complex and varied regulations across the region, particularly in these three countries (Malaysia, Indonesia, and Singapore), present challenges for companies seeking to adopt more sustainable energy purchasing practices. Streamlining and harmonising these regulations could help drive the transition towards greater sustainability in the data centre industry.”

    How ESC Supports Data Centres

    ESC is well-positioned to support data centre developers and operators in balancing growth with sustainability. The company helps clients navigate the complex landscape of regulatory compliance, ensuring that data centre projects adhere to environmental and social standards.

     

    Key services offered by ESC to make data centres more sustainable include:

    Environmental & Social

    • Permit acquisition and regulatory compliance support
    • Environmental and social impact assessments
    • ESG advisory and transactional due diligence

     

    EHS & Risk Management

     

    Sustainability & Climate Change

    • Development of sustainability roadmaps and net-zero strategies
    • Renewable energy integration and energy efficiency optimisation
    • Climate change mitigation and adaptation planning

     

    Partner with ESC to build a sustainable future for your data centre. Contact ESC to learn more about how we can help you achieve your green data centre goals.

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