Malaysia’s data center industry gets 500 MW solar, 1 GWh battery storage boost
Malaysia’s IOI Corporation, TNB, and partners will build a 500 MWac solar plant with 250 MW/1 GWh battery storage in Bahau to supply renewable power to DayOne Data Centres under a 21-year agreement.
IOI Corporation Berhad, Malaysia’s integrated palm oil producer, will develop a 500 MWac solar photovoltaic project paired with a 250 MW/1,000 MWh battery energy storage system (BESS) on 1,300 acres in Bahau, Negeri Sembilan. The project is a joint venture with Tenaga Nasional Berhad (TNB), the national utility, and a consortium of small and medium-sized enterprises. The initiative follows a long-term renewable energy offtake agreement between TNB and DayOne Data Centres Limited, a Singapore-based digital infrastructure platform, to supply up to 500 MWac of clean power over 21 years for DayOne’s Malaysian data centers.
The project represents IOI’s first large-scale renewable energy investment under Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS), which enables corporate consumers to source renewable electricity directly from independent developers via the national grid. CRESS aims to accelerate private investment in renewables while supporting decarbonization of energy-intensive industries such as data centers. The scheme has gained traction as Malaysia expands utility-scale solar and storage capacity to meet surging electricity demand from the sector.
Malaysia’s push to supply data centers with renewable energy has prompted additional large-scale initiatives, including a 1.5 GW solar and storage project announced in August 2025 by Gentari and Gamuda to serve hyperscale data centers under CRESS. However, rapid growth has raised concerns over grid capacity, supply reliability, and water availability, prompting a March 2026 analysis to assess challenges in balancing demand with grid stability and dispatchable generation.
In response to these challenges, Malaysia revised the CRESS framework in September 2026 to enhance project bankability. The updated rules introduced a fixed system access charge of MYR 0.14 ($0.03)/kWh for qualifying firm renewable supply projects and mandated a minimum 10-year contract term between developers and corporate buyers, with commercial operations required by the end of 2028. By the time of the revision, 11 renewable developers and eight corporate consumers had registered projects totaling about 3.15 GW under CRESS.