Singapore and Malaysia AI data centres: power, water and Johor

Singapore has little land and a tightly managed grid, so it releases data centre capacity in small, competitive batches: 200 megawatts allocated to four operators in August 2026. Next door, Johor in Malaysia holds a much larger pipeline, and Malaysia is now adding tariff, approval and utilisation rules to keep power and water in check.

This post covers the two markets side by side because they are physically and commercially linked. A short drive across the causeway separates a city-state that limits supply from a state that is building for scale. It is one of several posts on Asia Pacific. For the regional picture, see the Asia Pacific overview. Each country also has its own deeper explainer: Singapore's capacity rules from the 2019 pause to DC-CFA2 and Malaysia's power, water and approval rules. This post keeps to the summary and to how the two markets affect each other.

Terms used below. A megawatt (MW) is a measure of power at a moment in time; 1,000 MW is one gigawatt (GW). A terawatt hour (TWh) is energy over time. PUE, power usage effectiveness, is the ratio of a data centre's total energy use to the energy used by the computing equipment alone, so a lower number is better and 1.0 is the theoretical floor. A call for application is a government process where operators compete for permission to build a fixed amount of capacity.

Key numbers at a glance

• Singapore total data centre capacity: more than 1.4 GW (IMDA Green Data Centre Roadmap, published 2024).
• Singapore near term goal: at least 300 MW of additional capacity (IMDA Green Data Centre Roadmap, 2024).
• Singapore second call (DC-CFA2): launched 1 December 2025 with at least 200 MW on offer (EDB and IMDA fact sheet).
• DC-CFA2 result: 200 MW provisionally allocated on 21 August 2026, 50 MW each to Digital Realty, Equinix, Keppel Data Centres and ST Telemedia Global Data Centres (EDB and IMDA fact sheet).
• DC-CFA2 interest: more than 20 proposals received (EDB and IMDA, 21 August 2026).
• DC-CFA2 rules: PUE of 1.25 or better at full IT load, Green Mark Platinum, at least 50 percent of power from eligible green pathways (EDB and IMDA, 1 December 2025).
• Malaysia data centre share of national electricity: 9.28 percent per the Energy Commission chief executive, versus 7 percent given to Parliament in July by the Deputy Prime Minister (The Edge Malaysia, September 2026 report).
• Malaysia projection: around one third of electricity supply by 2035, per the Deputy Prime Minister as reported by The Edge Malaysia.
• Johor live capacity: 1,110 MW, with 8,542 MW incoming (Knight Frank Data Centre Atlas 2026, July, as reported by The Edge Malaysia). An investment bank note reports 8.5 GW incoming and 1.1 GW live (HLIB, via New Straits Times, 18 September 2026).
• Tenaga Nasional signed supply agreements: 8.35 GW, with a large share in Johor and another 5 GW expected, per HLIB reading of company guidance (New Straits Times, 18 September 2026).
• Malaysia base tariff, Peninsular Malaysia: 39.96 sen per kWh to 45.62 sen per kWh from 1 July 2025 (TNB and Energy Commission figures as reported by W.Media, 26 June 2025).
• Malaysia utilisation rule: data centres must use 85 percent of declared maximum demand in the first four years, with a penalty of RM8.50 per kW of shortfall, announced by the investment ministry (reported December 2025 and January 2026).

Singapore: a hub that rations capacity

Singapore is one of the region's most connected data centre locations. The Infocomm Media Development Authority (IMDA) described the sector in 2024 as a hub with total capacity above 1.4 GW and noted that Singapore's operational data centre capacity per person exceeds that of Australia, China, Japan, Korea and the United Kingdom, along with major cities such as Beijing, Hong Kong, Seoul, Sydney and Tokyo. That is the government's own comparison in its roadmap.

The capacity did not simply keep growing. The Economic Development Board (EDB) and IMDA state that the government told industry of a temporary pause in data centre growth in 2019 and began a review. In July 2022 they launched a pilot call for application as the way to bring back new capacity under conditions. Capacity is therefore a decision made by government, not only by the market.

The 2024 Green Data Centre Roadmap set the direction. It aims for at least 300 MW of additional capacity in the near term, with more through green energy deployments. It also aims to bring all data centres in Singapore to a PUE of 1.3 or better at full IT load over ten years. The roadmap points out that PUE alone is not enough, because it does not show how efficiently the computing equipment turns power into useful work.

The second call and its results

The second call, DC-CFA2, opened on 1 December 2025 with at least 200 MW on offer. In short, winners had to hit a PUE of 1.25 or better at full IT load, hold Green Mark Platinum certification and draw at least half their power from eligible green pathways, according to the EDB and IMDA fact sheet. The full list of conditions, including the equipment efficiency standard and the named green pathways, is set out in the Singapore capacity rules explainer.

On 21 August 2026 the agencies announced the outcome. They provisionally allocated 200 MW to four operators, 50 MW each, listed alphabetically as Digital Realty, Equinix, Keppel Data Centres and ST Telemedia Global Data Centres. More than 20 proposals were received. The operators committed to exceed the minimum sustainability requirements, to power more than 50 percent of capacity from green energy, and to use liquid cooling and fully energy efficient IT equipment. The fact sheet states that liquid cooling can cut energy use at data centre level by more than 30 percent compared with traditional air cooling. That figure is the agencies' own statement.

Two details matter for customers and planners. First, the awarded data centres will be located on Jurong Island, where the government land agency JTC is developing a low carbon data centre park. Second, the agencies said they will review the need for another call in 18 to 24 months. That is a review, not a promise of a third call.

The word "provisionally" matters. Allocation is a step, not a switched on facility. Build time, equipment supply and the green power arrangements still have to happen. No official source has stated when the capacity will be live, so no date is given here.

Why 50 MW at a time is significant

Fifty megawatts is modest next to the multi hundred megawatt campuses elsewhere in Asia Pacific. But Singapore's choice is deliberate. It trades volume for conditions: very efficient buildings, green power pathways and economic commitments such as research partnerships. What the government says is that the call is the primary mechanism for capacity allocation, with a separate route called the Strategic Digital Infrastructure Scheme for companies with uniquely differentiated value propositions.

For an AI customer, the practical effect is that high density racks in Singapore are likely to be served by liquid cooled halls from a small group of operators, while larger training clusters look elsewhere in the region. That is an inference from the allocation size and conditions, not a statement from any government document.

Malaysia and Johor: the spillover market

Johor sits directly north of Singapore, and the connection is more than geography. The Edge Malaysia reported in July 2024 that Malaysia's data centre investment rose in the years around Singapore's 2019 to 2022 pause. Between 2021 and 2023 the investment ministry approved RM114.7 billion of data centre investment, which was 79 percent of approved digital investment in that period, according to that report. The same article said Johor attracted 50 data centre investments in the two years before 2024, and that one early signal came in 2021 when YTL Power agreed a 500 MW data centre deal with Sea Ltd.

The Edge cited an industry index that ranked Johor as Southeast Asia's fastest growing market with more than 1.6 GW of total supply in 2024. Compare that with the 2026 figures: Knight Frank's Data Centre Atlas, released in July 2026, shows 1,110 MW live and 8,542 MW incoming in Johor, and the HLIB bank note reports almost identical numbers (1.1 GW live, 8.5 GW incoming). The two figures are not a contradiction. The 2024 figure counts total supply in an index with its own method, while the 2026 figures separate live capacity from the pipeline. The key point is the gap: the pipeline is about eight times the live capacity.

A pipeline is not a forecast. Many announced projects will be delayed, resized or cancelled. Malaysia's own government has said so, as the next section shows.

Malaysia's power problem is as much about promises as about supply

Several numbers describe how much of Malaysia's electricity data centres use. The Edge Malaysia reported in September 2026 that the Energy Commission chief executive put the share at 9.28 percent, while the Deputy Prime Minister told Parliament in July that it was 7 percent at that time. The Deputy Prime Minister also said data centres are expected to use around one third of Malaysia's electricity supply by 2035. The two present day figures differ by date and by who is speaking, so both are shown here. The same report gave the Energy Commission's installed generation capacity of 27,333 MW as of 2025 and a peak demand of 21,049 MW on 28 May 2025.

Tenaga Nasional Berhad (TNB), the main utility, has signed electricity supply agreements totalling 8.35 GW, with a large share in Johor and another 5 GW expected, according to the HLIB note. These are commitments to supply, not electricity being used today. When 8.35 GW of commitments is set against 21 GW of peak national demand, it is clear why the government has become cautious.

The "phantom demand" rules

In late December 2025 the Ministry of Investment, Trade and Industry (MITI) announced a package, reported by The Edge Malaysia and W.Media. Its stated aim was to remove what it called phantom demand, meaning power that developers request but do not use, which risks stranded assets, that is grid investment built for load that never arrives. The headline rule is that data centres must use 85 percent of their declared maximum demand during the first four years or pay RM8.50 per kilowatt of shortfall each month, a rate MITI said is subject to change. New projects also need sign off from a ministerial Data Centre Task Force, and applicants must show evidence such as offtake agreements and financial closure (W.Media, 15 January 2026). The later step down to 75 percent, the connected load charge and the full task force membership are covered in the Malaysia rules explainer.

MITI said the penalty is financial and will not disrupt service. TNB said low current utilisation is consistent with global practice, where capacity is built ahead of demand. That is a real difference of view between an investment ministry and a utility, and it is worth keeping in mind when reading headlines.

Tariffs

TNB introduced a new tariff structure on 1 July 2025, running through the regulatory period that ends 31 December 2026. The base tariff for Peninsular Malaysia rose from 39.96 sen per kWh to 45.62 sen per kWh (W.Media, 26 June 2025). One property consultant quoted by W.Media expected high voltage users such as data centres to face higher operating costs, which is an individual's view rather than an official statement. A further tariff period begins after December 2026, so rates beyond that date should be checked.

Operators can also buy renewable power directly under the Corporate Renewable Energy Supply Scheme (CRESS). W.Media reported that Bridge Data Centres signed a 400 MW deal and DayOne a 500 MW deal with TNB under this scheme, which requires an access fee. TNB also runs a Green Lane pathway to fast track connections for critical digital infrastructure, per The Edge Malaysia.

Water: the quieter constraint

Water is less visible than power but just as binding in Johor. The 2024 Edge Malaysia report quoted SPAN's chairman saying normal annual water demand growth in Johor is 2.5 percent, about 50 million litres per day (MLD), while data centre requests add an average 26 MLD a year until 2036. Johor's total water use was 1,407 MLD in 2022 in the same article, which also gave the Johor reserve margin (spare capacity as a share of demand) as 16.9 percent at that time, with the water operator Ranhill SAJ aiming for 25 percent by 2029.

Ranhill SAJ data cited then showed data centre applications for 439.67 MLD for 2024 to 2035, of which 316.38 MLD had been supported. A September 2026 bank note reports an estimate of about 400 MLD for total data centre water needs. The two numbers use different periods and methods, and the 2024 figure is a stack of applications, not actual use. HLIB also reports that Ranhill expects RM3.5 billion of water treatment plant spending. Johor raised its water tariff in August 2025, according to the same note.

No official source cited here confirms a Johor moratorium. The Edge Malaysia reported in 2024 that a state coordination committee reviews data centre applications with a focus on renewable energy and on saving power and water. Claims about a formal pause on water cooled projects have not been confirmed by the state or the water regulator, so they are left out.

Chips, trade and a controlled supply chain

Malaysia also sits in the AI chip supply conversation. On 14 July 2025 MITI announced that exports, transshipments and transits of high performance AI chips of US origin are subject to a Strategic Trade Permit under Section 12 of the Strategic Trade Act 2010. The statement says this closes regulatory gaps while Malaysia reviews whether to add such chips to its strategic items list. For operators, this means moving certain hardware through Malaysia involves a permit step.

MITI's wider direction, per The Edge Malaysia in December 2025, is to prioritise high density AI computing clusters and to link operators with local suppliers through programmes for areas such as precision cooling and chip design.

What is firm and what is uncertain

Firm, from official documents:

• Singapore allocated 200 MW across four named operators on 21 August 2026, with sustainability conditions and Jurong Island siting.
• Singapore's roadmap targets and the PUE conditions in the call documents.
• Malaysia's 14 July 2025 chip permit statement.
• Malaysia's 85 percent utilisation rule and penalty as announced by MITI, with the caveat that the rate may change.

Uncertain:

• Johor's 8.5 GW pipeline. It comes from a property consultancy and a bank, not a regulator, and projects can change.
• The share of Malaysian electricity used by data centres, where two official figures differ.
• Water figures, which mix applications with actual use and come from 2024 and 2026 sources.
• When Singapore's 200 MW will be live and whether a third call follows.
• Singapore's data centre share of national electricity, for which no official current figure is cited here.

For readers linking this to AI demand more broadly, the explainers on OpenAI compute commitments and Anthropic compute commitments explain how large buyers sign for capacity, which is the demand behind pipelines like Johor's.

What to watch next

• Any DC-CFA3 review within 18 to 24 months of August 2026.
• Delivery of the Jurong Island low carbon data centre park and the first awarded halls.
• The next Malaysian electricity tariff period after 31 December 2026.
• How the 85 percent utilisation rule works in practice and whether the penalty rate changes.
• Task Force approvals and any reallocation of reserved capacity from underused projects.
• Johor water treatment spending and reserve margin updates.
• Whether Malaysia adds US origin AI chips to its strategic items list.

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Quick check

Sources

• EDB and IMDA fact sheet, Four data centre proposals selected as part of DC-CFA2, 21 August 2026: https://www.edb.gov.sg/content/dam/edb-en/about-edb/media-releases/news/four-data-centre-proposals-selected-as-part-of-second-data-centre/Fact%20Sheet%20-Four%20data%20centre%20proposals%20selected%20as%20part%20of%20second%20data%20centre.pdf
• EDB, Four data centre proposals selected (press page): https://www.edb.gov.sg/en/about-edb/media-releases-publications/four-data-centre-proposals-selected-as-part-of-second-data-centre.html
• EDB and IMDA fact sheet, Launch of second data centre call for application, 1 December 2025: https://www.edb.gov.sg/content/dam/edb-en/about-edb/media-releases/news/launch-of-second-data-centre-call-for-application/Launch%20of%20second%20data%20centre-call%20for%20application.pdf
• EDB, Pilot data centre call for application, 20 July 2022: https://www.edb.gov.sg/en/about-edb/media-releases-publications/edb-and-imda-launch-pilot-data-centre-call-for-application-to-support-sustainable-growth-of-data-centres.html
• IMDA, Green Data Centre Roadmap (2024): https://www.imda.gov.sg/-/media/imda/files/how-we-can-help/green-dc-roadmap/green-dc-roadmap.pdf
• W.Media, Singapore DC-CFA2 winners announced: https://w.media/singapores-dc-cfa2-winners-announced-third-cfa-possible/
• MITI Malaysia, press statement on US origin AI chips, 14 July 2025: https://www.miti.gov.my/miti/resources/Media%20Release/[FINAL]%5FMITI%5FPress%5FStmt%5FMalaysia%5FRegulates%5FTrade%5Fof%5FUS%5FAI%5FChips%5F2025-07-14.pdf
• The Edge Malaysia, data centres and electricity, September 2026: https://theedgemalaysia.com/node/817208
• The Edge Malaysia, data centre approvals and tariffs, December 2025 to January 2026: https://theedgemalaysia.com/node/786977
• The Edge Malaysia, water investment and data centres, July 2024: https://theedgemalaysia.com/node/718243
• New Straits Times, Ranhill and Johor data centres, 18 September 2026: https://www.nst.com.my/amp/business/corporate/2026/09/1535264/ranhill-set-ride-johors-data-centre-industrial-boom
• W.Media, Malaysia tightens rules on phantom power demand, 15 January 2026: https://w.media/malaysia-tightens-rules-to-prevent-phantom-power-demand-by-data-centers/
• W.Media, Malaysian data centres and higher electricity bills, 26 June 2025: https://w.media/data-centers-in-malaysia-brace-for-higher-electricity-bills/

Last reviewed: 19 October 2026.