Johor targets 5GW of additional solar capacity by 2031 to meet data center demand

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Johor to add 5GW of solar by 2031

Highlights

The Johor government plans to add around 5GW of solar capacity by 2030/2031 to support the needs of data centers and large-scale industries.
Data centers in Johor are expected to require 30 terawatt-hours of electricity a year in 2031, equal to 18% of Peninsular Malaysia’s electricity supply, up from 6% this year.
The Energy Commission has opened a new tender to add 8GW of power capacity in Peninsular Malaysia, with much of the capacity expected to be allocated to Johor.

This article was translated from the original. Read the original version by our correspondent here.

Power capacity plan and project timeline

As reported by The Edge Malaysia, the Johor government is targeting around 5GW of additional solar power generation by 2030 or 2031 to support the needs of data centers and large-scale industries. State Investment, Trade, Consumer Affairs and Human Resources Committee chairman Lee Ting Han said the move follows concerns about a surge in electricity consumption as the data center sector grows rapidly.

BMI, a Fitch Solutions company, estimates that data centers in Johor will require around 30 terawatt-hours of electricity a year by 2031, equivalent to 18% of Peninsular Malaysia’s total electricity supply, up from 6% this year. So far, the state government has approved 65 land-based data center projects, 21 of which are already operational and are expected to consume nearly 1.1GW of electricity.

Lee said projects still under construction or in the planning stage will require an additional 4GW to 5GW. The solar initiative includes projects totaling 4GW in Kota Tinggi and Mersing, which are expected to begin phased operations from mid-2029, as well as a 1GW solar project in Segamat.

Impact on the state’s power supply and data industry

To prevent large-scale electricity consumption from affecting supply to public utilities, the state government has established the Johor State Data Center Development Coordination Committee, or JPPPDNJ. The committee is chaired by Johor Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor, with Lee serving as deputy chairman.

Lee said all proposed data center developments must first be approved by the committee before applying to the local authorities for planning permission. The committee also assesses power usage effectiveness to ensure electricity is used efficiently and in compliance with the regulations in place.

At the federal level, the Energy Commission, under the Ministry of Energy Transition and Water Transformation, has invited bids in a new tender to add 8GW of power capacity across Peninsular Malaysia, with much of the additional capacity expected to be allocated to Johor. Lee also welcomed the federal government’s policy allowing large-scale data center operators to explore alternative solutions, including off-grid systems to generate their own electricity, subject to existing regulations.

The combination of solar projects, off-grid solutions and new capacity from the national tender is expected to strengthen Johor’s electricity supply over the long term. The plan also puts the state in a better position to support the continued growth of the data center industry and other industrial development.

In our previous coverage of the proposed electricity tariff “user-pays” approach for large consumers such as data centers and energy-intensive industries, we explained the government’s efforts to curb pressure on supply costs so that increases in household bills can be kept under control. The article also discussed the factors driving up generation costs and incentives for consumers to manage demand through time-of-use tariffs, although the rates and implementation timeline for the new tariffs have yet to be specified.

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