Data centres: 30% green power rule, one-year grid pledge

The government has approved a rule that data centres must use at least 30% renewable energy, Deputy Prime Minister Datuk Seri Fadillah Yusof, who is also Energy Transition and Water Transformation Minister, told the Dewan Rakyat on 27 October 2026. The share is measured against a data centre's total capacity or energy consumption. The Energy Commission (Suruhanjaya Tenaga) is writing the framework and guidelines, including rules on self-generation. No start date has been given.

With what TNB, the Energy Commission and the trade minister said around it, these are the rules a data centre project now faces.

Getting approved

• Power check: every electricity application gets a technical assessment of whether the system can meet the demand projected by the National Energy Council, and of transmission and distribution capacity and the investment needed, Fadillah said. Operators are also urged to generate their own solar power
• Water check: the state must confirm water is available before a project can be considered. "If a state does not have sufficient water, we cannot approve even if land is available," Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said on 28 October
• On hold: 24 new applications are waiting while the government checks, with TNB, whether supply and reserve margins can cover the 117 data centres already approved. If not, it will look at off-grid options such as solar with battery storage
• No subsidy: power for data centres will not be subsidised, and their supply is being kept separate from that of other industries. Johari also said every development must meet at least 30% local content

Of the 117 approved, 55 are running and 19 are being built, Johari said; if all were finished, demand could reach 23,000MW to 23,500MW.

Getting connected

• One year: once a data centre has been approved by the ministry-chaired committee, TNB pledges to connect it to the grid within a year, its chief distribution network officer, Ahmad Sazree Abd Aziz, said in Singapore on 27 October
• Before that: TNB's Green Lane Pathway had already cut connection times from 36 months to as little as 12, with 33 projects delivered under it by March 2026

Buying green power through CRESS

The Corporate Renewable Energy Supply Scheme (CRESS) lets a renewable energy developer sell power directly to a company through TNB's grid. The developer pays a system access charge.

• Who gets 14 sen: projects that start operating by 31 December 2028, on contracts of at least 10 years. The rate is fixed for 10 years from the start date, the Energy Commission said on 15 October. About 3GW of projects are in the pipeline
• The buyer's 4 sen: it is charged on the buyer's electricity use and follows the regulated tariff. Fadillah said it was already in place and should not be added to the developer's charge and reported as an "18 sen" fee
• Coming next: updated CRESS guidelines are due this month