[KUALA LUMPUR] The operators of energy-hungry data centres in Malaysia are scrambling to reassess costs after steeper-than-expected power tariffs kicked in on Tuesday (Jul 1), industry players said, clouding prospects for the South-east Asian hub of digital investments.
Competitive rates for electricity, which forms the bulk of operating costs, make Malaysia a magnet for data centres compared to land-scarce neighbour Singapore, luring billions of US dollars in investment from companies like Microsoft and Google.
The tariff hike unveiled in December, with details fleshed out last month, could boost electricity costs by 10 to 14 per cent before surcharges for major consumers such as data centres, an industry official and a government official said.
A key element of the uncertainty stems from the bands used to calculate power bills in the tiered pricing system, with industry players saying most major centres are expected to fall in the ultra-high voltage category with the highest tariffs.
With many in the industry unprepared for the scale of increases, some investors may now adopt a wait-and-watch approach, said Gary Goh, founder and director of data centre advisory firm Sprint DC Consulting.
“For a 100-megawatt (MW) facility, this could translate to an additional US$15 million to US$20 million per year without considering fuel surcharge,” he added.
Source: https://www.businesstimes.com.sg/international/asean/malaysia-data-centres-battle-higher-power-costs-unclear-pricing