Johor State halts development of water-based data centres until 2027
In southern Malaysia, expansion of water-based cooling systems for data centres has been halted for 18 months. Among the causes are drought and the distribution of water resources, which are lacking in the south, where investments are concentrated. With 48 data centres, Johor would become a regional hub by 2030.
Rome (AsiaNews/Agencies) – Southeast Asia has been shaping up to become a global hub for data centres, the large infrastructure required by IT systems, like servers, data storage, and networking equipment.
Starting in 2024, demand was expected to grow by 20 per cent annually for at least five years, with (positive) impacts on the region's economies.
Water resources, which are often limited, are expected to be impacted as well. Because of this, Malaysia’s Johor State has asked companies to suspend the expansion of water-cooling systems in their energy-intensive data centres for at least 18 months.
The authorities are grappling with drought and have stressed the need to reduce water use “until mid-2027”.
Malaysia, like Singapore, Thailand, Indonesia, and Vietnam, has become a data centre hub. These countries have attracted investors due to their low costs, energy availability, and relative geopolitical stability.
Although the curb on water resource exploitation in Johor represents a blow to the developing facilities, it is certainly not a setback. For the authorities in fact, the temporary postponement applies only to facilities that use water to cool servers that operate 24/7.
By contrast, residents and environmentalists are increasingly critical, as the gains in jobs and economic benefits brought by the investments in this technology clash with basic water needs.
Johor, which is in southern Malaysia, on the border with Singapore, currently hosts 15 data centres with 11 under construction and 22 in the approval phase, the South China Morning Post reports.
Essential for all IT needs, from AI to e-commerce services, the data centres require about 675 million cubic metres of water per day for cooling, according to government estimates.
However, officials say the main problem is not water supply, which is deemed sufficient for demand, but distribution since water is not evenly distributed.
At the same time, drought and pollution are having an effect, with residents complaining of worsening supplies, and disruptions in recent months.
The South China Morning Post notes that in early November, a sand mining accident forced the closure of four facilities, cutting off access to water for more than half of Johor's 1.7 million residents, sometimes for up to 12 hours.
Resources are reportedly concentrated in the central and eastern regions, while the greatest demand is in the south, near Singapore, where foreign investment is highest. The local government has therefore launched projects to carry water south, to be completed by mid-2027.
Lee Ting Han, who chairs the Johor State Investment, Trade and Consumer Affairs Committee, told investors in Kuala Lumpur that water cooling cannot be provided before 2027.
Still, data centres will be able to operate if alternative solutions are considered, such as air cooling or other technologies.
Some of the largest investments in Johor include the US$ 4.3 billion partnership between YTL Utilities and Nvidia for AI infrastructure, and the US$ 2 billion project by Google to build its first data centre in Malaysia.
By 2030, Johor is expected to have 48 data centres, making it the largest hub in the region.
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