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Data centres in Johor now draw about 3.8 GW at maximum demand, according to Wood Mackenzie. That is roughly one and a half times the whole state's current electricity demand. Johor now accounts for around 51% of all data-centre maximum demand in Peninsular Malaysia.
The load more than doubled between 2024 and 2025. Johor has drawn £31.6bn ($42bn, €36.9bn) in cumulative investment from hyperscalers and technology firms.
The obvious explanation is cheap land next to Singapore. The engineering explanation is different. Capacity went where the grid had room, and it stopped where the grid did not.
Singapore's cap was Johor's opening. The state now draws 3.8 GW
Singapore is not short of demand. It is short of headroom. The island hosts about 1.4 GW across more than 70 data centres. Its Green Data Centre Roadmap offers at least 300 MW more, plus 200 MW for operators using green energy.
That is a deliberate ration. The latest call for applications offered at least 200 MW and closed on 31 March 2026. Operators had to prove best-in-class efficiency. Demand that could not win a slot did not evaporate. It crossed the strait.
Data centres hit 31% of Malaysia's power by 2035. The regulatory screen decides who connects
Malaysia is not accepting that demand unconditionally. On 1 July 2026 the energy ministry put that projection to parliament. It reaches 73,274 GWh a year, up from 7% of supply this year.
The screening rule is the important part. Approval for new applications is granted only where they align with local grid capacity planning. Peninsular peak demand is projected to rise from 21.3 GW to 33.5 GW by 2035. The state is now rationing by network, not by appetite.
The problem is not generation. Johor has 6.8 GW and uses 2.6 GW
Johor's supply position looks comfortable. Installed generation sits near 6.8 GW against demand of about 2.6 GW. Transmission and distribution utilisation runs at roughly 30%.
Those system-wide numbers hide the problem. Demand is concentrated around a few clusters, notably Sedenak Tech Park and Nusajaya Tech Park. A healthy average means nothing on a constrained node.
Engineering reality: 132 kV substations, not power stations, decide the build
Wood Mackenzie names the binding constraint precisely. Shortages of 132 kV main intake substations and limited nodal injection points are the most immediate infrastructure challenges.
The proposed fixes are equally physical. Higher-voltage 275 kV connections with on-site substations. Decentralised solar for self-consumption. Wood Mackenzie's Alvin Tan put it plainly. The issue is increasingly about where power is available, not whether it is available.
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The strategic disconnect: TNB connects in 12 months, US investment waits four to five years
Speed of connection is now a competitive instrument. Tenaga Nasional's Green Lane Pathway has cut data-centre grid connection from 36 months to as little as 12. It delivered 33 projects by March 2026. It sits inside a RM43 billion grid modernisation programme, about £8.1bn ($10.8bn, €9.5bn).
Compare that with the United States. Interconnection there commonly takes four to five years, and up to ten in some areas. The five largest operators plan up to £526bn ($700bn, €616bn) of US data-centre investment in 2026 alone. Capital is abundant. Connection dates are not.
On 13 July, Meta expanded its Louisiana Hyperion campus to 5 GW, carrying more than £37.6bn ($50bn, €44bn). Entergy told regulators a bespoke power deal was necessary to win it. As one analyst put it, you can multisource chips, but not a transmission queue slot.
Ireland's path: 22% of national power, and a regulator that can reject sites
Europe reached the same conclusion and wrote it into law. Ireland's Commission for Regulation of Utilities has published its final decision on large energy user connections. Operators must source 80% of annual demand from renewables, on a six-year glide path.
The siting power matters more. EirGrid and ESB Networks can now reject proposed sites, with constraints flagged around Dublin and Cork. Irish data centres drew just 5% of national electricity in 2015. Two regulators, two continents, one rule: build where the network has room.
Traditional siting logic fails. RP4 fixed the tariff at 45.40 sen and moved nothing
Tariffs are the wrong variable to watch. Malaysia's Regulatory Period 4 runs to December 2027. The base tariff was revised to 45.40 sen per kWh, down from the 45.62 sen approved in December 2024.
Price shapes operating cost. It does not create a connection point. Johor's real advantage is a utility that can energise a site in a year. Projects like the £4.5bn ($6bn, €5.3bn) Southern Johor Renewable Energy Corridor back that up. Roughly 2.1 GW of Johor coal retires in the mid-2030s, so that headroom must be rebuilt, not assumed.
The bottom line
Singapore capped, Malaysia screened, Ireland codified, and the United States queued. In every case the same variable decided the outcome. Not demand, not land, not tariff. Network headroom at a specific node, on a specific date.
Siting is now an engineering question answered with grid data, and the planner still makes the call. Public reference maps such as atlas.vistergy.com exist to make that data legible. The next gigawatt lands wherever a substation can take it.
Next week: Microsoft calls the electrician shortage AI's number one problem.
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