Data Centres Boom: National Water Services Commission Shares 5 Long Term Mesaures to Ensure Continuous and Sustainable Water Supply

The National Water Services Commission (SPAN) has shared a guide on how to ensure sustainable water supply amidst the data centre boom in the country.

“Data centres, including large-scale data centres, also known as hyperscale data centres, have begun to be developed rapidly due to the development of the digital economy and high technology in line with the development of 5G, AI, cloud storage, Bitcoin mining, digital banking or commercial applications and so on,” said a statement dated 21st January 2025.

Data centres usually require a large supply of water for the purpose of cooling server systems and data centre electronic equipment. In some situations, water is also used for the purpose of generating energy by some data centres.

Future economic growth and national well-being can be guaranteed by the orderly and sustainable development of data centres while accounting for the decarbonisation component of reaching the nation’s net zero goal.

Scale of water supply demand

Data centres generally use several types of cooling systems, most of which use treated water supplies in Malaysia. The demand by data centres received by state water operators is as follows:

A total of 79 million litres per day (MLD) has been applied for to Pengurusan Air Selangor until 2032. This amount is equivalent to around 30 Olympic-sized swimming pools; and ii. An application of 440 MLD has been received by Ranhill SAJ Sdn Bhd until 2035 in the districts of Johor Bahru, Iskandar Puteri, Sedenak, Kulai/Senai, Pasir Gudang, and Pontian. According to Ranhill SAJ, the estimated water demand is expected to reach 614 MLD in the same period. The 440 MLD is approximately 23% of the water demand when compared to the water demand in the state of Johor in 2023.

The trend of water resource availability is experiencing significant changes due to climate change.

Operators of the entire clean water supply system are under pressure from unpredictable weather, so pertinent factors like these must be considered in the planning and development of the entire data centre.

• Availability of raw water resources in the development area;
• Reduced dependence on treated water supply and feasibility of alternative water sources; and
• Availability of water supply system infrastructure and related investments.

Interim policies to ensure continuous and sustainable water supply

To manage water supply demand between domestic users and data centres, SPAN recommends that several policies should be implemented in collaboration with various agencies as follows:

1. The Federal Government should set a policy for operating data centres sustainably, taking into account efficient water use, reducing impacts on the environment and local water catchment areas and resources, and implementing water resource development projects.
2. Set water consumption limit regulations for industries or large users, including data centres, and coordinate the development of water efficiency plans in their enterprises.
3. State governments should ensure the adequacy of raw water resources before a data centre development approval is granted, especially in areas with high demand.
4. The State of Selangor, through the Selangor Water Management Board (LUAS), has implemented a zero discharge policy and this should be emulated and implemented in other states because this policy encourages prudent water use, such as recycling water sustainably for industries such as data centres.
5. The Federal Government and the State Government must continue to cooperate in implementing water resource development projects such as the construction of TAPS (Takung Air Pinggiran Sungai) or barrages to increase the supply of raw water resources sustainably.
6. Water supply operators must make water infrastructure development plans to ensure adequate water supply to all users as well as setting limits on the rate of intake of treated water supply by data centres that need to be controlled.
7. Water supply operators must review existing contingency plans during water supply disruptions and droughts and foster the development of water efficiency plans.

“The development of data centres is still new in this country but it is growing quite rapidly”. Therefore, in addition to the interim policies and measures proposed above, SPAN also proposes several long-term measures or initiatives to improve water efficiency among data centre developers in the next 3 to 5 years, namely:”

1. Use of Reclaimed Water: Using reclaimed water, such as treated effluent from sewage treatment plants, for non-food/beverage purposes such as cooling. This can reduce the burden of treated water use.
2. Efficient Cooling Technology: Using more efficient cooling technology to reduce water consumption in the cooling process.
3. Rainwater Harvesting System: Applying a rainwater harvesting system for use in data centre operations. The collected rainwater can be used for various needs other than food and beverage purposes.
4. Recirculating Water Use: Using a cycles of concentration (COC) system that processes and repeats the use of water in the data centre to reduce new water consumption. In Singapore, COC is one of the benchmarks used to regulate data centres.
5. Monitoring and Measurement: Using a monitoring and measurement system to monitor water consumption in real-time data and identify locations that can be improved for greater efficiency.

With these measures, data centres can reduce water consumption and improve the effectiveness of their operations. SPAN is examining all aspects and is in the process of developing mechanisms and setting relevant regulations that will be shared once finalised.