Melaka strengthens energy sector to support growth in industry and data centres

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Melaka strengthens energy sector

Highlights

The Melaka government, through a collaboration between MCorp and Edra Power Holdings, is targeting an increase in energy capacity to two gigawatts to support an integrated data centre ecosystem.
The 2,242-megawatt Edra Melaka Power Plant remains one of Malaysia's major electricity contributors, while an investment worth RM6 billion is expected to create more than 3,000 jobs.
Solar farms in Ayer Keroh, Rembia, Bemban and Masjid Tanah have the potential to generate 102 gigawatt-hours a year, with a 90-megawatt hybrid solar project targeted for completion in 2027 and the 22-megawatt Sungai Udang Waste-to-Energy project in 2029.

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

Energy capacity plans and new projects

As reported by The Edge Malaysia, Melaka Chief Minister Datuk Seri Dr Ab Rauf Yusoh said the state is taking concrete steps to strengthen its energy sector by diversifying energy sources and promoting more sustainable power generation. He said electricity demand would continue to rise as more high-tech industries and data centres establish themselves in Melaka, making a reliable energy supply a priority for the state.

He said this was important to ensure energy infrastructure kept pace with Melaka's entry into the next phase of industrial growth. At the CGNEI Gas Turbine Power Committee 2026 Work Conference at EMPP, he said Melaka Corporation (MCorp) and Edra Power Holdings were working together to develop an integrated data centre ecosystem, with the goal of increasing power capacity to two gigawatts.

Ab Rauf also highlighted the contribution of the 2,242-megawatt Edra Melaka Power Plant (EMPP) to Malaysia's electricity supply. He said the gas-fired combined-cycle plant, one of the largest in Southeast Asia, plays an important role in strengthening energy security while supporting the state's industrial future.

The collaboration between MCorp and Edra also includes exploring the development of a gas storage and regasification unit in Tanjung Bidara to strengthen gas supply infrastructure and support future power generation. Edra previously announced a proposed investment of RM6 billion, which could create more than 3,000 jobs.

Impact on industry, sustainable energy and local talent

Ab Rauf said these developments would give Melaka an opportunity to further strengthen its energy sector, support high-value industries and generate economic benefits for the people. To expand sustainable power generation, he said solar farms in Ayer Keroh, Rembia, Bemban and Masjid Tanah have the potential to generate a combined total of around 102 gigawatt-hours of electricity annually.

He said Melaka is now developing its first hybrid solar project, with a planned capacity of 90 megawatts, targeted for completion by the end of 2027. In addition, the Sungai Udang Waste-to-Energy Project is expected to generate 22 megawatts of electricity when it begins operations in 2029.

According to him, these initiatives complement the important role of gas-fired power generation in ensuring a reliable electricity supply. He added that the state's aim is to support industrial growth through a reliable and sustainable energy system, while urging CGN Energy International, Edra and industry partners to continue creating more opportunities for skilled local talent, particularly young people in Melaka, through specialised training, industry placements and meaningful career pathways.

In our earlier coverage of the proposed pricing system for “user-pays” large consumers such as data centres and energy-intensive industries, we explained the government's rationale for limiting cost pressures on household bills as electricity demand continues to rise. The article also outlined the factors driving higher generation costs and the role of tariff adjustment mechanisms and incentives to use time-of-use tariffs in managing demand outside peak hours.

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