WATER, energy and resource-intensive industries (WERII) are taking a vital economic spot to spearhead new technologies and solutions to fuel artificial intelligence (AI), net zero solutions and climate adaption and mitigation, among others.
However, Malaysia’s policies are not holistically streamlined to mitigate environmental challenges faced by this sector.
The Association of Water and Energy Research Malaysia (Awer) has raised this issue numerous times and when the federal and state governments open their doors for investments into WERII, they must ensure there are adequate measures to keep these industries in sustainable operation.
Let’s zoom in to the latest issues surrounding data centres. By 2030, it is projected that Malaysia will have more than 2,000MW capacity for data centres. This is a sizeable chunk of electricity demand. In addition to that, if every 100MW of a data centre averagely require four million litre per day (MLD) of water supply for cooling purpose, water demand for data centres may exceed 80 MLD by 2030.
Will this industry pose a huge risk to our water and electricity sector?
Every investment and manufacturing or large-scale services sector development goes through an approval process. In this step, the agencies involved from federal and state governments must ensure that the technologies are the latest and most efficient so that it can assist in economic development as a whole in a sustainable manner while optimising resources’ use.
According to 2024 official data, the non-revenue water (NRW – treated water that is loss in the water supply system) stood at 5,541 MLD or 34.3% for Peninsular Malaysia and Labuan. Selangor (including Kuala Lumpur and Putrajaya) recorded 1,431 MLD or 27% and Johor 482 MLD or 24.1% of NRW in the same year. Reduction of NRW can improve distributable capacity of treated water. A longstanding issue we have raised continuously to be addressed.
As for the energy-guzzling part of data centres, Power Usage Effectiveness (PUE) is used to measure the efficient operation of data centres. In Malaysia, the PUE was set at 1.6 compared to Singapore at a stricter level of 1.3. Thus, there is room for improvement for PUE in Malaysia. As more data centres start to operate in Malaysia, it will increase the baseload profile for energy demand in Peninsular Malaysia particularly.
The nature of data centres is 24/7 operation and any attempt to link up to renewable energy (RE) poses risk. RE has intermittent risk and it is not a reliable baseload supply unless substantial investment are done to improve energy storage facilities that can guarantee a continuous RE supply for data centes, which comes with high capital expenditure investment. At the moment, fossil fuel power plants are on standby for RE power plants to operate in Malaysia to address the intermittency risk. Therefore, this situation is making current RE operation not truly fossil fuel free.
Below are steps that federal and state governments and their agencies must consider in improving WERII operation to be more sustainable and give positive economic impact:
☻ Legally binding and voluntary approaches to increase energy efficiency for this sector must be developed. This includes keeping sustainability comparison data at the same level of international peers;
☻ Develop future proofing sustainable policies and guidelines tailor-made to address the need of different WERII sectors;
☻ Water efficiency can be mandated using Water Services Industry Act 2006. This can include water reuse, recycling and optimisation of water use for cooling. These approaches can be tailor-made for specific WERII. A local water services company is already offering water recycling solution for wastewater treatment in-situ for manufacturing facilities and such models must be further improved and expanded nationally;
☻ Waste to resource approaches for WERII and creating matching demand as well as operational ecosystem will further improve sustainability standard in Malaysia; and
☻ Improving alternative sustainable and durable cooling and coolant technology is another important area of research and development that may have cross cutting sectoral benefits for energy efficiency and peak demand shaving.
It is utmost important that approaches derived and undertaken by the government to encourage WERII must not include any attempt to socialise the cost of getting new investors to the economy and the people. Cost socialisation is not a sustainable trend as it is smothering of inefficiency to the public.
This article is contributed by Piarapakaran S, president of Awer, a non-government organisation involved in research and development in the fields of water, energy and environment.
