Johor is rapidly becoming a key digital infrastructure hub in Southeast Asia, with data centres projected to consume 40% of the state’s electricity demand by 2035, according to a new report by Wood Mackenzie. This surge in demand is expected to significantly impact the region’s power grid, which is already facing constraints in transmission and distribution infrastructure.
The report, titled “Powering Johor’s Data Centre Boom: Supply, Demand, and Grid Constraints,” highlights that whilst power generation is currently sufficient, the availability of transmission and distribution infrastructure is becoming a critical bottleneck. Alvin Tan, a research analyst at Wood Mackenzie, noted, “The issue is increasingly about where power is available rather than whether it is available.”
Johor has attracted MYR165b (US$42b) in investments from technology companies, benefiting from its proximity to Singapore and competitive costs. The state’s data centre load more than doubled between 2024 and 2025, now accounting for 51% of Peninsular Malaysia’s total data centre demand.
Despite having 6.8 GW of installed generation capacity, localised constraints are emerging, particularly around major data centre clusters like Sedenak Tech Park. The report suggests potential solutions such as higher-voltage connections and decentralised solar generation.
Looking ahead, the retirement of 2.1 GW of coal-fired capacity in the mid-2030s and the tightening of reserve margins pose further challenges. The NewGen26 programme, aimed at adding 6 GW to 8 GW of new gas-fired capacity, is seen as crucial for maintaining long-term reliability.
Johor’s supportive policy framework continues to attract investment, but infrastructure planning must keep pace with rapid growth to avoid future limitations.
