Growing Demand for Electricity in Data Centers: What’s Next?

While data center stocks may not be as hot as they once were, the construction of data centers continues unabated. Recently, $OCK / 0172 (OCK GROUP BERHAD) secured contracts for data center projects, and it's anticipated that more companies will soon follow suit, winning similar contracts in the near future.

In June 2024, CGS conducted a study on the data center capacity in Malaysia, referencing data from DC Bytes. A recent RHB report, also citing DC Bytes, indicates that the electricity demand for data centers is expected to rise significantly in the coming years.

According to the CGS report and DC Bytes data, by 2028, the electricity required for data centers in Malaysia is projected to reach 3,221 MW. Delving deeper into DC Bytes' data, we find that 280 MW are already operational, 159 MW are under construction, 766 MW are committed, and 2,016 MW are still in the early stages, where their future is uncertain.

The latest RHB report, also based on DC Bytes data, shows an increase in these figures: 344.4 MW are currently operational, 240.7 MW are under construction, 766.9 MW are committed, and 2,828.6 MW are in the early stages. The total electricity required had increase to 4,180.6 MW! This indicates a rising demand for electricity within just a month. Additionally, Johor has emerged as the prime location for data centers, with electricity requirements surpassing those of Kuala Lumpur.