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Malaysia Boosts Data Center Industry with Large-Scale Solar and Battery Storage
Malaysia is developing a significant 500 MWac solar energy project paired with a 1 GWh battery energy storage system in Negeri Sembilan. This collaborative effort by IOI Corporation Berhad and Tenaga Nasional Berhad aims to supply renewable energy to DayOne Data Centres Limited. The initiative operates under the Corporate Renewable Energy Supply Scheme (CRESS), which has been recently revised to encourage sustainable energy investments. This development supports the increasing energy demand from Malaysia's data center industry.
Malaysia has commenced the development of a substantial 500 MWac solar photovoltaic project, coupled with a battery energy storage system (BESS) boasting a capacity of 250 MW and 1,000 MWh. This project is slated for construction on approximately 1,300 acres of land in Bahau, Negeri Sembilan.
The development is a collaborative effort between IOI Corporation Berhad, a leading Malaysian palm oil producer, and Tenaga Nasional Berhad (TNB), the country's largest electricity utility, alongside a consortium of unspecified small and medium-sized enterprises. The project is designed to supply renewable energy to DayOne Data Centres Limited, a global digital infrastructure platform headquartered in Singapore. DayOne has entered into a long-term agreement to procure up to 500 MWac of renewable energy over a 21-year period to support its data center operations in Malaysia.
This initiative marks IOI's inaugural large-scale renewable energy investment under Malaysia's Corporate Renewable Energy Supply Scheme (CRESS). This scheme enables corporate electricity consumers to directly procure renewable power from independent developers via the national grid. The primary objective of CRESS is to encourage private investment in renewable energy infrastructure while supporting the decarbonization of energy-intensive industries.
The rapid expansion of Malaysia's data center industry has led to an escalating demand for electricity. To address this, Malaysia is expanding its utility-scale solar and energy storage capacity. In September 2026, Malaysia revised the CRESS framework to enhance project bankability and stimulate investment. The updated regulations specify a fixed system access charge of MYR 0.14 ($0.03) per kWh for firm renewable electricity supply projects that meet the criteria, and they also mandate a contract term of at least 10 years for agreements between developers and corporate consumers. To be eligible for this reduced charge, projects must commence commercial operations no later than the end of 2028. According to pv magazine, at that time, eleven renewable energy developers and eight corporate consumers had registered projects totaling approximately 3.15 GW under the scheme.
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Talk to Oranje-Eco →This article is an Oranje-Eco summary of a report by pv magazine. Read the original: pv magazine.
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