Data centres could be fined for inflated water, power demand

KUALA LUMPUR: Data centre operators may be fined if they ask for more water or power than they need, deputy prime minister Fadillah Yusof told the Dewan Rakyat today.

Fadillah said the federal government wanted to prevent “phantom demand”, where companies reserve large amounts of water or electricity but do not fully utilise them.

“Previously, they would say they needed a certain amount. But now, if they say they need that amount, they must commit to it.

“If they do not use it later, they will be fined,” he said during Ministers’ Question Time.

He was responding to Suhaizan Kaiat (PH-Pulai), who had asked about the frequent water cuts in Johor Bahru, Pulai, Iskandar Puteri, and Larkin.

Suhaizan said 17 data centres were located in greater Johor Bahru, where current water demand stands at 1,274.1 million litres per day and could rise to 1,600 million litres per day by 2030.

Fadillah, the energy transition and water transformation minister, said the government was taking such an approach to ensure that these companies provide accurate data when applying for water and electricity supply.

He said the government’s priority was to ensure sufficient water supply for the people first.

Fadillah said a federal Data Centre Task Force, chaired by the investment, trade and industry ministry, would assess the water and power needs of proposed data centres before they are referred to state governments.

He said the government also wanted data centres to use recycled water and newer cooling systems that require less water and power.

On the situation in Johor, Fadillah said the state had a water reserve margin of about 14.4%, and that some disruptions were due to technical issues or maintenance works.

He said Johor’s raw water use stood at 2,052 million litres per day, and that Putrajaya was working on new dams, riverbank storage schemes, barrages, raw water transfer projects, and four water treatment plant projects.

He also said reclaimed water was now part of Johor’s long-term water plan, especially for high-use industries such as data centres.

Fadillah said Indah Water Konsortium and Johor Special Water Sdn Bhd were supplying 12 million litres per day of high-quality reclaimed water for data centre cooling in Johor, the first such initiative in the country.