Sahabat Alam Malaysia expresses its concerns about the rapid boom of data centres in the country, particularly in Johor, which has the largest data centre market in the country.
The exponential growth and the increasing reliance the world has put on technology – particularly the internet and the services it provides such as social media applications, cloud computing, ecommerce and the recent artificial intelligence (AI) craze – has collectively driven the demand for bigger and complex data centres.
The combination of Malaysia’s strategic location in Southeast Asia, robust infrastructure, cheap electricity and water tariffs, affordability and availability of land, government subsidies and tax incentives and the recent moratorium on data centres in Singapore has seen companies rushing to build data centres in Malaysia.
These centres promise billions of dollars of investments in the country while purportedly creating high-value job opportunities for the local populace.
Big tech and its proponents always boast about the economic benefits of data centres.
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But the federal and state governments must be aware of the environmental impacts these data centres pose. They must provide the required safeguards whilst ensuring the claimed economic upsides actually reach and benefit the country.
Data centres guzzle vast amounts of electricity to power servers and cooling systems. If left unchecked, this additional electricity demand can strain the local power grid.
In Ireland, data centres consume almost one fifth of the country’s energy production straining the national power grid as the nation reported eight electricity supply alerts in 2022 alone. This compares to just 13 alerts from 2010 to 2019, the period before the data centre boom in the country.
In Malaysia, Tenaga Nasional Bhd expects that potential electricity demand from data centres to hit over 5,000 megawatts by 2035. TNB has received applications for new data centres exceeding 11,000MW, which represents just over 40% of the peninsula’s existing installed power-generation capacity of about 27,000MW.
If profits are prioritised over energy sustainability and security, the electricity demands of these data centres can outpace supply, causing critical energy shortages to the country.
Moreover, as the nation’s supply is mostly powered by fossil fuels, and renewable energy in the grid is estimated to max out at only 22% by 2050 [see the national energy transition roadmap], powering these data centres can be a large source of carbon emissions for the country.
In addition, data centres consume enormous amounts of water which can constrain the local water supply. It is estimated that a 100MW data centre consumes about 4.2 million litres of water every day, which is equivalent to the daily water usage for a city of 10,000 people [see national energy transition roadmap].
In Chile, after protests and legal action brought in court against the establishment of data centres in the country due to environmental and water concerns, it was revealed that the cooling towers of the data centre that Google plans to build in the country’s southern region would consume 7.6 million litres of potable water a day. This in a country that is ranked 16th highest in terms of suffering from extremely high water stress.
Malaysia’s main water regulator, the National Water Services Commission, has warned that we could face widespread water shortages in just five years due to a combination of climate change, wastage and ageing infrastructure.
With legitimate concerns of widespread water shortage in the country and the enormous water demands of data centres, it can be a point of conflict in the coming years if the water needs of the local population and of big tech are not properly balanced.
Lastly, is the questionability of claims that data centres can be catalysts of job creation when in reality, the bulk of the job creation is transitory, taking place during the construction phase – which is why construction companies are rushing into the data centre frenzy.
Further, according to a US-based report, while a typical data company headquarters can have between 200 and 1,000 jobs on site, the number of jobs at an average data centre is usually capped at 30.
The Virginia Electrical Workers Union stated that when Microsoft established a large data centre in Virginia in 2012, the company chose to hire outsourced technicians to do most of the work while about 25 local residents got jobs, primarily as administrative assistants or janitorial staff.
With the recent rapid advancements of AI and its ability to automate operations in data centres, there would be a lesser need for local labour to run day-to-day operations. This raises a concern about whether the establishment of these data centres would actually benefit the country, especially from the quality and quantity of employment standpoint.
SAM calls upon the government to be cognisant in light of the data centre boom, of the potential impacts data centres pose to energy and water security in the country, along with the rise in carbon emissions that they generate.
More comprehensive assessments of the costs and benefits of such data centres must be undertaken and made public, factoring in these environmental and social impacts.
The federal and the Johor state governments must make clear what safeguards are being put in place to ensure that the environmental impacts, especially on energy and water consumption, have been properly taken into account.
We should learn from the moratorium that Singapore has imposed on data centres due to energy and water concerns. We should not be blindsided by investments from big data centres to our detriment and peril in the long term. – SAM
Meenakshi Raman is president of Sahabat Alam Malaysia.
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