Data reveals that water infrastructure in three states can supply only 142 million liters per day to businesses, falling significantly short of the required 808 MLD.
Malaysian data centers urged to explore alternative water sources
Resource-intensive data centres are urged to explore alternative water sources to alleviate the burden on public water supplies, as cautioned by Malaysia’s water regulatory authority. This advisory comes as the Southeast Asian country seeks to attract companies looking for more affordable land options outside of neighboring Singapore for their operations.
Malaysia aims to establish itself as Asia’s data centre hub by providing land incentives and resources to support these energy-demanding facilities. Data centres are essential for managing the extensive data necessary for various sectors, including e-commerce, cloud computing, and artificial intelligence, thus forming a vital component of digital infrastructure.
However, the expansion of data centres in Malaysia has led to significant resource strain, with water demand surpassing available capacity, as reported by the National Water Services Commission.
The commission indicated that it has sanctioned less than 18 percent of water applications for the 101 data centres currently functioning in Selangor, Negeri Sembilan, and Johor, primarily due to concerns regarding the use of treated water intended for public consumption.
“This situation arises from the inadequate water supply to support these data centres. Therefore, alternative resources must be explored,” stated commission chairman Charles Santiago during a press conference on Monday.
Data indicates that the water infrastructure in these three states can only supply a total of 142 million litres per day (MLD) to data centres, which is significantly lower than the 808 MLD required overall.
The highest demand for data centres originated from Johor, located just across the Causeway from Singapore, where 72 facilities are projected to require 673 million litres of water daily.
In an effort to alleviate the pressure on its densely populated city-state, Singapore has sought land in Malaysia for these resource-intensive operations.
However, critics, including conservationists, caution that the establishment of all proposed data centres could severely impact both public and natural environments.
The commission stated, “The feasibility of utilizing alternative water sources, such as reclaimed water and seawater, hinges on the availability and sufficiency of these resources in the designated data centre development areas.”
Consequently, during the planning approval phase, water operators are required to evaluate the necessity for data centres to obtain water from alternative sources, rather than relying solely on treated drinking water. Analyst Adib Zalkapli noted that mismanagement of the nation’s water resources could have political consequences for Prime Minister Anwar Ibrahim and his government, while also compelling potential investors in data centres to reassess their plans.
“Malaysians are well aware of water supply interruptions, so it is imperative for authorities to ensure that the operations of data centres, particularly their water usage, do not escalate into a political controversy,” remarked Adib, managing director of the geopolitical and public policy advisory firm Viewfinder Global Affairs.
Significant investments have been committed by major Silicon Valley companies, including Nvidia, Microsoft, and Alphabet, the parent company of Google, alongside Chinese technology leader ByteDance, the owner of TikTok, to establish AI data centre hubs in Malaysia.
According to UK-based data centre market intelligence firm DC Byte, Johor is projected to be the fastest-growing data centre market in Southeast Asia in 2024, benefiting from a three-year moratorium on new data centres imposed by Singapore in 2020, as the city-state faced challenges related to energy and water consumption.
