Tenaga Nasional forecasts higher Peninsular Malaysia power demand as data centres expand

Tenaga Nasional Berhad expects electricity consumption in Peninsular Malaysia to reach 148.66 terawatt-hours in 2027 as data centres expand, according to a government economic outlook reported by Reuters on October 9, 2026. The forecast underscores the government’s call for investment in electricity generation and networks to meet growing demand while maintaining reliable supply.

The outlook, released alongside Malaysia’s 2027 budget, compares that forecast with projected consumption of 141.87 TWh in 2026. Both figures are estimates for annual electricity use in Peninsular Malaysia, rather than completed-year measurements. The difference between the published totals is 6.79 TWh.

What Malaysia’s electricity forecast shows

Reuters describes the outlook as representing average annual growth of about 4.9%. Calculating the increase between the two annual totals gives approximately 4.79%. The report does not explain the difference, so the quoted growth rate cannot be precisely reconciled with those totals.

The government report places data-centre investment among the reasons electricity requirements are rising. “Data centres are one of the clearest examples of why Malaysia needs more electricity as Malaysia has attracted large amounts of investment in this sector,” it says, according to Reuters’ report published by CNA.

Data-centre demand figures need different units

The outlook puts actual electricity use by data centres at 710 megawatts in 2025, compared with 405 MW in 2024, Reuters reports. That is an increase of 305 MW, or about 75%, calculated from the published figures. These historical figures are separate from the utility’s annual consumption forecasts.

Megawatts measure power, while terawatt-hours measure energy consumed over time. Reuters does not specify the measurement interval or load methodology behind the data-centre figures. They therefore cannot establish annual data-centre energy consumption or be compared directly with the Peninsular Malaysia totals expressed in TWh.

Looking further ahead, the outlook cites the Energy Transition and Water Transformation Ministry as projecting that data-centre electricity demand could reach 12.9 gigawatts by 2030 and 20.9 GW by 2040. These are projections, not capacity already delivered. The report does not detail their methodology or establish that their geographical coverage matches the Peninsular Malaysia consumption forecast.

Why grid construction matters for data centres

The government says continued investment in generation, transmission networks and grid infrastructure is necessary to meet growing domestic demand and maintain secure supply. “To manage this growth, Malaysia needs to expand its electricity grid while increasing the availability of renewable energy,” the report says, as quoted by Reuters.

Independent research by the International Energy Agency explains the timing challenge. Its April 2025 Energy and AI analysis says a data centre can become operational in two to three years, while energy infrastructure generally requires longer planning and construction periods, as well as substantial upfront investment.

The IEA projected that Southeast Asian data-centre electricity demand would more than double by 2030, partly reflecting the regional hub in Singapore and southern Malaysia. That earlier analysis provides regional context for the Malaysian outlook; it is a separate forecast, rather than a confirmation of Tenaga Nasional’s newly reported annual totals.

Electricity requirements also extend beyond computing equipment. The IEA says servers account for around 60% of demand in modern data centres on average. Cooling accounts for about 7% in efficient hyperscale facilities and more than 30% in less-efficient enterprise facilities. Those are general benchmarks, not measurements of Malaysian sites.

Renewable targets and unresolved supply questions

Malaysia is targeting renewable-energy capacity shares of 40% by 2035 and 70% by 2050, according to Reuters. Those targets concern installed capacity, not the share of electricity actually generated from renewable sources. They do not establish that the additional supply needed for data-centre growth is already available.

The October 9 report identifies an infrastructure requirement but does not establish a specific investment budget or timetable for individual projects. It also provides no confirmed effect on household tariffs or evidence of an electricity shortage. The forecast sets out expected demand; how and when particular supply projects will meet it remains unresolved in the report.