VIENTIANE: Malaysia has sufficient energy resources to meet the growing demand for electricity driven by the development of data centres, said a panellist at the Asean Media Forum.
Dr Mirza Sadaqat Huda, Lead Researcher in the Climate Change in Southeast Asia Programme at the ISEAS - Yusof Ishak Institute, said that while data centres have placed significant pressure on energy supplies across Southeast Asia, Malaysia's energy resources remain a strong asset.
"The development of data centres, not just in Malaysia but across the region, alongside industries like Bitcoin mining, has put considerable pressure on energy supplies.
"But given the enormous resources Malaysia has, I do not think this will impede its ability to export energy, particularly with the Asean Power Grid in place," he said during a panel discussion on Monday.
Mirza said Asean as a region has renewable energy potential sufficient to meet two-thirds of its collective energy needs.
Regional cooperation, he added, could be a crucial solution to balancing energy demand and supply.
"If Malaysia does have a lot of pressure on its energy supplies due to the development of data centres or other industries, it makes sense to involve regional cooperation.
"Malaysia doesn't always need to export electricity—it can also import electricity," he said,
Mirza also called for bi-directional power grids within the Asean Power Grid framework to enhance energy security and manage the variability of renewable energy sources.
He said solar, wind, and hydropower have different peak periods of generation and times when they are less productive, hence, bi-directional grids are essential to balance these fluctuations, regardless of whether energy demand is driven by data centres or other industries.
The Asean Power Grid aims to integrate electricity networks across member states, enabling the efficient sharing of energy resources and advancing sustainability and economic growth in the region.
Bi-directional power grids allow electricity to flow both from power plants to consumers and back from consumers to the grid, enabling better integration of renewable energy and efficient energy management.
Malaysia is emerging as a data center powerhouse in Southeast Asia as demand surges for cloud computing and artificial intelligence.
Over the past few years, the country has attracted billions of dollars in data centre investments, including from tech giants such as Google (RM9.4 billion, approximately US$2 billion), Nvidia (RM20.24 billion, approximately US$4.3 billion), Microsoft (RM10.37 billion, approximately US$2.2 billion) and Amazon Web Services (AWS) (RM29.22 billion, approximately US$6.2 billion).
Mirza was one of the four panelists in a discussion entitled 'Asean Connectivity – Achievements and Prospects'. He was joined by Asean Secretariat Connectivity Division director Lim Chze Cheen, European Union Ambassador to Laos Mark Gallagher and Mekong Institute executive director Suriyan Vichitlekarn.
Meanwhile, on connectivity, Mirza said Asean faces several challenges related to the Asean Power Grid, first conceptualised in the 1990s and set to be renewed or advanced in 2025.
This includes financial constraints, as the region requires approximately US$ 230 billion by 2050 to upgrade its energy infrastructure, including power plants and cross-border grids.
He added that other challenges include the existing energy grids in Asean, which are not sufficiently flexible or responsive to accommodate higher levels of renewable energy integration, as well as regulatory gaps and differing technological standards among member states.
"There's also the broader challenge of ensuring a just transition, because the Asean Power Grid or any kind of energy connectivity is not an end in itself, but a tool for sustainable development and higher levels of regional cooperation.
"We must ensure that the benefits and costs of the Asean Power Grid are equitably distributed in a just and fair manner.
"The current memorandum of understanding expires in 2025, so we can look forward to some of these challenges being addressed and opportunities being utilised," he said.
He also acknowledged that some of the challenges are currently being addressed.
On another matter, Lim said Malaysia who would assume its Asean chairmanship next year has lined up a number of activities, particularly on issues related to inclusivity, sustainability, connectivity, and resilience.
He said the Asean Connectivity Division has been closely working with the Economy and Housing and Local Government ministries but refused to divulge further.
Laos is this year's Asean chair, while Malaysia is set to lead the annual summit next year, scheduled in May.
Malaysia has held the Asean chairmanship in 1977, 1997, 2005, and 2015, with each tenure seeing Malaysia play a crucial role in strengthening regional cooperation and enhancing Asean's economic integration.
Prime Minister Datuk Seri Anwar Ibrahim when officially receiving the handover of the Asean chairmanship last month revealed that Malaysia has selected the theme "Inclusivity and Sustainability" to steer its leadership as it takes on the Asean chairmanship next year.