Starting July 1, 2025, new electricity tariffs will come into effect in Malaysia, leading to increased operational costs for data centers. This tariff increase will significantly impact the industry's economics.
Changes in Electricity Tariffs
The electricity tariff for major consumers, including data centers, will rise from 39.96 sen per kWh to 45.62 sen per kWh. It is expected that these new rates will increase electricity costs by 10% to 14% before additional surcharges.
Impact Analysis on Data Centers
Gary Goh, founder of Sprint DC Consulting, notes that unprepared investors may face significant financial consequences. For example, a 100-megawatt data center could incur additional costs ranging from $15 million to $20 million annually. Furthermore, the trend of rushing to sign Power Purchase Agreements (PPAs) with Tenaga Nasional Berhad (TNB) is increasing rapidly.
Industry Prospects
Mahadhir Aziz, president of the Data Centre Association of Malaysia, expressed concerns about losing foreign investments to favorable conditions in neighboring countries like Vietnam and Thailand. Despite low energy and land prices, the new tariffs may discourage investors.
Experts predict that the new tariffs will have a significant impact on the data center sector in Malaysia, potentially leading to a reassessment of investment strategies and losses for the industry as a whole.
