Ensure enough water supply before approving data centre development, SPAN tells local councils

Malaysia is in an unsustainable position by using drinking water to power data centres and must explore alternative sources such as reclaimed water and rainwater harvesting.

This is the recommendation of the National Water Services Commission (SPAN) as it seeks to ensure enough water for everyone.

In a worst-case scenario, SPAN could intervene to direct states to prioritise water resources for the general population rather than for data centres.

Speaking at a press conference this morning, SPAN chairman Charles Santiago revealed that Pengurusan Air Selangor has received a request for 79 million litres per day (MLD) – equivalent to 30 Olympic-size swimming pools – through to 2032 to power data centres.

“A request for 440 MLD has been received by Ranhill SAJ Sdn Bhd until 2035 for the Johor Bahru, Iskandar Puteri, Sedenak, Kulai/Senai, Pasir Gudang, and Pontian districts,” said Santiago.

“This demand is expected to reach 614 MLD over the same period. The 440 MLD represents approximately 23 per cent of the total water demand in Johor for 2023.

“Therefore, we urge all municipal councils to assess their water supply to ensure there is enough water for the population before giving approval to data centre operators.”

The availability of water resources is undergoing substantial changes as a result of climate change.

Unpredictable weather patterns are putting pressure on the overall clean water supply operations by operators; therefore, the planning and development of data centres must consider factors such as:

• The availability of raw water resources in the development area; • Reducing reliance on treated water and the feasibility of using alternative water sources; and • The availability of water supply infrastructure and related investments.

SPAN has recommended several policies to manage water demand between domestic users and data centres, which should be implemented in cooperation with relevant agencies.

One is for the federal government to establish sustainable data centre policies, focusing on water efficiency, minimising environmental impact, protecting local catchments, creating jobs, and supporting water resource development.

Malaysia, as Asean chair this year, is initiating the ‘Asean Guide for Sustainable Data Centre Development’. Several state governments also have guidelines for the sustainable development of data centres, while Indah Water Konsortium recently announced its plans to implement water reclamation projects through strategic collaborations with private sector partners to help power data centres.

SPAN has also recommended regulations for setting water usage limits for large users, including data centres, aligning their operations with water efficiency goals.

“State governments must ensure adequate raw water resources before approving data centre projects, particularly in high-demand areas. Selangor’s zero-discharge policy, promoting sustainable water use and recycling in industries like data centres, should also be adopted by other states,” said Santiago.

“We also recommend that federal and state governments collaborate on water resource projects, such as building reservoirs or dams, to sustainably increase water supply.

“Water supply operators should develop infrastructure plans to ensure adequate supply for all users and regulate treated water consumption by data centres. Operators must review contingency plans for water disruptions and droughts, promoting water efficiency.”

He added that SPAN is giving data centre operators three to five years to transition to alternative sources such as reclaimed water or harvesting rainwater, as is practised overseas.

Asked if SPAN could intervene in a prolonged drought, Santiago said: “Yes, we have the power to instruct states to direct the resources to the population in a worst-case scenario.

“We can’t control the weather, and if there is a prolonged drought, there could be a problem.”

Currently, SPAN has a reserve margin for each state but will conduct a review as demand is rising due to development, an increase in population, and new technology.

Santiago also stated that SPAN would recommend that data centre operators conduct impact, noise, and environmental assessments before building their centres.

There are three types of data centres: standalone, large-scale, and hyperscale.

These centres have been mushrooming due to the growth of the digital economy and advanced technologies, in line with the development of 5G applications, artificial intelligence, cloud storage, Bitcoin mining, digital banking, and other commercial sectors.

Data centres typically require large amounts of water for cooling server systems and electronic equipment. In some cases, water is also used for energy generation.