Malaysia plans to add 6 to 8 gigawatts of gas-fired power by 2030 to meet surging electricity demand, largely driven by a boom in data centers, a state utility official said last week.

This expansion represents a significant 40% to 54% increase from the current 15 GW of gas-fired capacity, which is not enough to support the rapidly growing number of power-hungry data centers in the Asian country. 

Megat Jalaluddin, CEO of state utility Tenaga Nasional Berhad, stated that new plants will be built and existing ones will have their lifespans extended as the nation aims to responsibly reduce its reliance on coal. 

"We want to phase out coal responsibly. Then the next best option that can basically take the place of coal is gas," Jalaluddin told Reuters at the Energy Asia conference last week.

Malaysia, currently the world's fifth-largest exporter of liquefied natural gas (LNG), could become an importer of the super-chilled fuel within four to five years due to rising domestic demand, according to the head of state energy firm Petronas.

The country is experiencing the fastest growth in data center power demand in Southeast Asia, according to a May report by Bain & Co, Google, and Temasek.  The report projected that Malaysia's share of regional electricity consumed by data centers would triple to 21% by 2027, up from 7% in 2022, pushing the government to seek more gas-fired electricity generation. 

Deputy Prime Minister Fadillah Yusof noted that data centers are expected to require 19.5 GW of power by 2035, accounting for 52% of Peninsular Malaysia's electricity use, a sharp increase from about 2% currently.

To address this escalating demand, total power consumption in Malaysia is forecast to rise by 30% by 2030, with the nation already seeking industry proposals for supply. In addition to gas, Malaysia aims to more than double its renewable energy capacity to as much as 10 GW by 2030, driven by data centers seeking cleaner power sources.