Can Selangor Handle the Data Centre Boom?

By: Sakina Mohamed & Shaza Al Muzayen
Editor: Sakina Mohamed
Data Visualisation: Shaza Al Muzayen
Designer: Ummul Syuhaida Othman
Drone Footage: Hafzi Mohamed

KUALA LUMPUR, Aug 26 (Bernama)  -- Data centres have a colossal thirst for water, that much is well-known.

What’s less obvious is the pressure they exert on the local water supply, particularly in states like Selangor, where reserve margins in some districts are already stretched thin.

This raises the question: how will new large-scale facilities draw from the same limited resources?

One example is taking shape on a 51-hectare site at Selangor’s Elmina Business Park. This is where Google’s first data centre in Malaysia is currently under construction and slated for completion in early 2026. Yet public details on its water and power use remain scarce.

‍Garasi Bernama uncovered more through an investment bank’s research note. Phase 1 of the project is designed for 100 MW, while Phase 2 could add another 200-250 MW – indicating that both facilities would be hyperscale data centres.

Once both phases are operational, the combined capacity will reach an estimated 300 to 350 MW - enough to

power Kuantan city.

The average per capita electricity use in  Peninsular Malaysia is ~4,800 kWh/year. Kuantan's population as of 2025 is 559,000

While the energy demand sounds massive, hyperscale data centres require this level of power to run tens of thousands of servers.

Why Are Data Centres So Thirsty?

Most of the energy consumed by a data centre goes into cooling – a critical yet resource-intensive process. As processor functions generate heat, temperatures in server rooms can rise quickly. This can put equipment at risk of slowdown or even shutdown. 

This makes cooling one of the biggest energy drains in data centres, often accounting for around 45 percent of total power use.  

To maintain optimal performance, data centres often use water-based cooling systems that draw heat from servers, then expel the warmed water as liquid or vapour to carry the heat out of the building.

Fresh water must constantly be added to replace what's lost, resulting in large-scale daily water use.

Hyperscale data centres, operating at much higher capacities, are typically the most water-intensive of all.

While there are cooling methods that require no water – such as air-based cooling – many data centres still resort to water cooling due to performance advantage.
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C.K. Tang, Head of the Green Building Index Data Centre Tool Development Committee (Credit: C.K. Tang)

“It’s crucial to acknowledge that water-based cooling solutions generally offer superior energy efficiency due to their ability to achieve lower temperatures,” says C.K. Tang, who heads the Green Building Index Data Centre Tool Development Committee. 

“For data centres, energy cost is a major operational expense, so even marginal improvements in energy efficiency can save a lot on operating costs.”

But how much water would a hyperscale facility – like the one being built in Elmina Business Park – need for cooling purposes?

We reached out to the state water operator, Pengurusan Air Selangor Sdn Bhd (Air Selangor) to find out if Google had submitted a water supply allocation request for the facility.
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Its CEO Adam Saffian Ghazali confirmed that they had, but could not disclose the volume.

Adam Saffian Ghazali, CEO of Air Selangor (Credit: Air Selangor)

“While the specific daily volume remains confidential, it represents a substantial demand,” he tells Bernama.

But how much is “substantial?"

A 2025 report by the International Energy Agency (IEA) revealed that an average 100 MW data centre in the US consumes around 2 million litres per day (MLD).

This means that a hyperscale facility that operates with a combined capacity of 350 MW could require around 7 MLD.

That’s the equivalent to the average daily water use of around

31,111 Malaysians.

Based on the consumption per capita per day of the 2024 population of Pensinsular Malaysia & Labuan FT.

Source: SPAN Water and Sewerage Factbook 2024

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But over a year, this would mean the upcoming Google data centre in Selangor could consume an estimated 2.56 billion litres of water.

Can Selangor Handle This?

In the Ministry of Investment, Trade and Industry (MITI)’s “Sustainable Development of Data Centres” guidelines, operators are encouraged to avoid water-stressed regions by selecting sites with a Water Stress Index (WSI) below 0.8.

The WSI compares how much water is being used to how much is naturally available. A WSI above 0.5 signals high water stress, meaning water demand is approaching or exceeding what the environment can sustainably provide.

To better understand how the rapid expansion of the data centre industry might affect the water stress level in Selangor, Bernama consulted the National Water Research Institute of Malaysia (NAHRIM).

NAHRIM uses projections based on global climate scenarios outlined by the Fourth Assessment Report of the Intergovernmental Panel on Climate Change to predict how water stress levels shift over time.

These scenarios account for different rates of economic growth, population change and environmental pressures – including those from high-resource industries like data centres.

Using these projections, NAHRIM mapped future water demand and supply across Peninsular Malaysia for the years 2015, 2020, 2030, 2040 and 2050.

Given the wide range of uncertainties in climate modelling, Bernama’s report refers to one of NAHRIM’s composite scenarios. This scenario, known as AVG 14, reflects a mid-range outlook drawn from multiple possible futures.

According to the AVG 14 scenario, several Selangor districts are already grappling with severe water stress, and are expected to remain under the same pressure through 2050.

Among these districts is Gombak, the site of Google’s upcoming hyperscale data centre. Its WSI is projected to remain at extreme levels – 0.99 by 2030 and 0.96 in both 2040 and 2050 – well above MITI’s recommended threshold of 0.8.

This raises a critical question: Can Selangor's water resources sustainably support hyperscale data centres given these stress levels?

Air Selangor believes that it can.

“Air Selangor's current infrastructure comprises 34 water treatment plants with a combined design capacity of 6,300 MLD, of which about 5,300 MLD is currently utilised,” says CEO Adam Saffian. “This leaves a buffer of 1,000 MLD, which is more than sufficient to meet the projected demands of data centres.”

However, relying on reserves can be risky as it is usually meant for contingencies like unplanned water treatment plant shutdown or major pipeline failures.

Malaysia currently hosts 108 data centre sites – some operational, others under construction, and the rest still in the pipeline.

Fifty of them are in Selangor.

Their projected water needs are about 250 MLD, says Adam Saffian, adding that the estimate also factored in the requirements of Google’s upcoming facility.

“The goal would be to enhance the state’s water reserve margin to 20 percent by 2030 to meet public and industrial demands, including those by data centres,” he says.

Air Selangor data shows that Selangor’s overall water reserve margin displayed a trend of improvement over the past several years.

In 2018, the margin stood at just 5.87 percent, but by Dec 2024 it had risen to 18.60 percent, reflecting expanded treatment capacity and more structured water planning across the state.

They Need High Quality Water

In January 2025, Selangor Menteri Besar Datuk Seri Amirudin Shari told a press conference that data centres often required water of higher purity than regular drinking water.

Adam Saffian confirms this, adding that this was because the effectiveness and reliability of a data centre’s cooling system depend heavily on the quality of its water supply.

“To ensure optimal performance, the water used must meet specific quality parameters –
primarily low mineral content to avoid scaling, minimal microbial presence to prevent biofouling, and chemical stability to protect equipment from corrosion,” he explains.

The upcoming Google hyperscale data centre, however, has requested treated potable water for their operations.

Despite the slightly lower quality requirement, the National Water Services Commission (SPAN) is still concerned.

“Potable water is primarily intended for human consumption.

“Diverting significant amounts of treated water to industrial facilities such as data centres may compromise water security for other consumers, particularly in high-demand areas,” its CEO Datuk Ahmad Faizal Abdul Rahman tells Bernama.

Sharing his concern is Mohd Faris Mohd Razali, a resident of Elmina Green 4 & 5 – a neighbourhood close to the upcoming Google hyperscale facility.

“I know that data centres consume large amounts of water for their cooling systems.

“From my experience, Selangor is one of the states that often experience water shortages. I’m worried that the needs of this mega project may be prioritised as they may have been promised uninterrupted water and electricity supply,” says the 38-year-old business owner.

His concerns are well-founded. Records from the then Ministry of Water, Land and Natural Resources (now known as the Ministry Of Natural Resources and Environmental Sustainability) show that from 2014 to 2017, Selangor experienced the highest number of unscheduled water cuts in the country.

Across those years, Malaysia recorded 558,188 unscheduled interruptions, with Selangor accounting for 265,951.

Datuk Ahmad Faizal Abdul Rahman, CEO of SPAN (Credit: Hafiz Sohaimi/BERNAMA)

“Addressing the issue of past water shortages in the state, Ahmad Faizal said: ‘A major cause of supply disruptions is pollution from illegal factories along rivers, which eventually causes the shutdown of water treatment plants.’

He notes that another reason for water cuts stems from incidents with aging pipes, which Air Selangor has been gradually replacing.

While the government has amended the law to criminalise the act of polluting watercourse and supply systems, a key concern remains: will the needs of data centres be prioritised over that of the public?

Ahmad Faizal acknowledges the economic benefits these facilities bring in supporting Malaysia’s ambition to become a regional digital hub, but says operators should also explore alternative cooling technologies to reduce their reliance on treated water.

“These could include implementing closed-loop systems or adopting air-based cooling methods.

“Moving forward, SPAN will require high-demand industries such as data centres to prioritise non-potable water sources wherever possible, including treated effluent from sewage treatment plants or harvested rainwater,” he says.

SPAN is currently in the process of formulating policies and guidelines aimed at reducing data centres' reliance on potable water.

“These upcoming policies and guidelines will become a guidance on how such data centre projects are evaluated and approved by the water operators,” says Ahmad Faizal.

He notes that SPAN does not directly approve the water needs of data centres. Rather, developments requiring treated water must obtain clearance through the state water operator, which SPAN has authorised to serve as Certifying Agencies.

“For Air Selangor to approve the development of that data centre, it would mean that there is enough water. They will not simply approve,” he says.

Countermeasures

Air Selangor confirms that it has outlined plans to support the escalating water demands of Malaysia’s burgeoning data centre industry.

CEO Adam Saffian says that main, compact and potable water treatment plants (WTP) will be built in strategic locations to improve distribution efficiency and serve as backup during maintenance or emergencies.

The state water operator is also looking at other water supply sources in the meantime, such as from:

Central Water currently produces 4 million litres of non-potable treated water per day. Adam Saffian says the plant production capacity would be increased to 7.5 MLD for data centre use.

“Air Selangor also supports the state’s Zero Discharge Policy (ZDP), which promotes sustainable water use through recycling and reuse, particularly in industries like data centres,” he says.

The ZDP is a state regulation, enforced by LUAS, that encourages industries to reuse and recycle wastewater to reduce effluent discharge into rivers and drains.

Where discharge is unavoidable, it is strictly licensed, with fees imposed under the Polluter Pays Principle for all water or effluent released.

Gazetted on June 20, 2024, the ZDP replaced the state’s 2012 discharge rules.

Responding to concerns that data centres rely on treated potable water, Adam Saffian says Air Selangor acknowledges these technical needs but supports reclaimed water – treated to industrial reuse standards – as a viable option for non-potable uses such as cooling, particularly near wastewater treatment or reclamation facilities.

“This approach aligns with both operational efficiency and sustainability goals,” he says. “Ultimately, selecting the right water source depends on balancing technical requirements, environmental considerations, and the availability of supporting infrastructure.”

What Google Says

Bernama also contacted Google for comment. While many questions went unanswered, the corporation outlined measures aimed at ensuring its data centres do not strain community water resources.

In an email response, Giorgio Fortunato, Head of Clean Energy and Power for Google Asia-Pacific, says the firm evaluates cooling options for each data centre based on local conditions, using what it calls a “multidimensional methodology.”

“Google applies its data centre water risk framework, a data-driven tool we use globally to evaluate the specific risks of water scarcity and depletion in the watersheds where we plan to operate, guiding our technology choices before construction begins.

“We don’t take a one-size-fits-all approach; instead, we use data to understand the local environmental context,” he says.

Where water is used, he adds, the company looks at alternatives to freshwater, such as wastewater, industrial water, or seawater, to reduce local demand.

“We utilise reclaimed or non-potable water at more than 25 percent of our data centre campuses.”

Are Guidelines in the Works?

Since 2021, tech giants like Google have poured over RM144 billion into Malaysia alone to fuel the expansion of the data centre industry.

While the economic benefits are clear, Malaysia must also examine how it can welcome this valuable investment without letting it drain the resources local communities and businesses rely on.

Ideally, guidelines for managing these facilities should keep pace with their rapid growth. While data centres multiply, existing rules have yet to fully address the sustainable use of essential resources like electricity and water.

These issues, identified by the Ministry of Housing and Local Government (KPKT) after multiple engagement sessions with stakeholders, are mentioned in its planning guideline for data centres. The document that was released back in Oct 2024 through its agency PLANMalaysia highlighted some key concerns including:

All these issues will hopefully be addressed in October with the launch of a framework for sustainable data centres.

For Elmina Green 4 & 5 resident Mohd Faris, sustainable development of mega projects is extremely important.

“This is our home. Most of us bought property for long-term living and retirement.

“I hope the government and developer have taken all the necessary steps in managing a project of this magnitude in our neighbourhood.”

– BERNAMA

This story is part of the Macaranga Environmental Reporting Mentorship supported by a grant from the Youth Environmental Living Labs (YELL) administered by Justice for Wildlife Malaysia.