말레이시아는 향후 데이터센터 수요를 지원하기 위해 차세대 원전인 SMR을 국가 에너지 믹스에 통합하기 위한 규제 및 인프라 기반을 마련하고 있다.

Kuala Lumpur: Malaysia is actively laying the groundwork to integrate nuclear power into its national energy mix, though commercial deployment remains unlikely in the near term.

The central question remains whether private enterprises or state-linked energy giants such as Petroliam Nasional Berhad (Petronas) and Tenaga Nasional Berhad (TNB)—both reportedly eager to lead the initiative—will drive the project forward.

With the conflict between the United States and Iran continuing to disrupt West Asia and global markets, Malaysia has seriously evaluated alternative energy strategies. The country has studied international energy frameworks, including the deployment of civilian nuclear technology for industrial and municipal applications.

Last week, the International Atomic Energy Agency (IAEA) presented at a national workshop focused on human resource development modelling—a workforce planning strategy that projects future staffing requirements—as Malaysia builds institutional capacity to support both current and future nuclear applications.

In March, Deputy Prime Minister Datuk Seri Fadillah Yusof stated that Malaysia has conducted a comprehensive assessment of its potential nuclear energy programme, encompassing policy development, regulatory frameworks, project feasibility, industry participation, stakeholder engagement, and human capital development.

Fadillah, who also serves as Minister of Energy Transition and Water Transformation (PETRA), emphasized that exploring nuclear power for electricity generation is a strategic move to bolster long-term energy security while advancing the nation’s clean energy transition.

Earlier, Science, Technology and Innovation (MOSTI) Minister Datuk Chang Lih Kang confirmed that Malaysia is actively exploring nuclear energy for future power generation under a structured framework coordinated with PETRA, with MOSTI leading key nuclear initiatives.

Under Chang’s leadership, the ministry launched the National Nuclear Technology Policy (DTNN) 2030 to advance the peaceful applications of nuclear technology. He noted that a government-commissioned pre-feasibility study identified strong potential for nuclear energy as a clean, stable, and reliable source to secure Malaysia’s long-term energy needs.

Juwai IQI Global Chief Economist Shan Saeed described Malaysia’s evaluation of civilian nuclear energy as strategically sound and economically timely. He noted that under the 13th Malaysia Plan (13MP), nuclear power is being positioned as a low-carbon pillar of the nation’s future electricity grid, with MyPOWER Corporation coordinating a feasibility process aligned with the IAEA’s Milestones Approach.

“The 13MP sets an initial operational ambition of 2031, although deployment must remain conditional on safety, regulatory readiness and commercial viability,” he told Bernama recently.

AI and Data Centre Expansion Drive Energy Demand

The rapid expansion of data centres across ASEAN, with Malaysia leading regional growth, strengthens the economic rationale for nuclear investment. Concurrently, Malaysia is aggressively pursuing its artificial intelligence (AI) roadmap to achieve “AI Nation” status by 2030.

The Malaysian Investment Development Authority (MIDA) approved RM144.4 billion in data centre and cloud computing investments between 2021 and mid-2025. By mid-August 2025, TNB had secured power supply agreements for 47 data centre projects, representing a peak demand of 6.7 gigawatts (GW).

MIDA projects that data centre power demand could surpass 5 GW by 2035, accounting for approximately 18 percent of Peninsular Malaysia’s total installed capacity in 2025.

Shan emphasized that reliable electricity is shifting from a basic infrastructure requirement to a core driver of national competitiveness.

“The gains would extend beyond data centres to semiconductor fabrication, electrical and electronics manufacturing, chemicals, advanced materials and green hydrogen. Nuclear could complement Malaysia's renewable-energy base with firm generation when solar output fluctuates, while diversifying the power mix and reducing exposure to imported-fuel volatility,” said the economist.

McKinsey estimates U.S. data centre demand could surge from 25 GW in 2024 to over 80 GW by 2030, while ExxonMobil projects global electricity demand will grow by approximately 70 percent by 2050.

“The competitive frontier is shifting from land, tax incentives and connectivity towards dependable, scalable power. Technological prudence remains essential,” Shan added.

Leveraging Petronas and TNB’s Capabilities

With the government establishing the foundational framework, Petronas and TNB are expected to spearhead commercial nuclear initiatives given their scale and operational capacity.

Shan recommended an ideal model that is government-led yet commercially disciplined. He advised that MyPOWER should retain its role as programme coordinator, supported by the Energy Commission, the Department of Atomic Energy Malaysia (Atom Malaysia), and the Malaysian Nuclear Agency.

“TNB is the natural domestic anchor for system planning and grid integration; Petronas could contribute expertise in complex-project delivery, safety management, international procurement and capital deployment. Experienced international vendors would initially provide reactor technology and operating expertise, while hyperscalers could strengthen project bankability through long-term power-purchase agreements,” he added.

Identifying the Optimal Nuclear Solution for Malaysia

Beyond capacity building, the critical next step is identifying a nuclear technology that aligns with Malaysia’s specific energy requirements.

On July 10, 2025, Malaysia signed a memorandum of understanding (MoU) on Strategic Civil Nuclear Cooperation with the United States, reinforcing the nation’s broader clean energy objectives and long-term energy security. Malaysia has also cultivated partnership networks with China and Russia to strengthen its preparedness for a future nuclear programme built on safety, robust regulation, and strategic planning.

Both Petronas and TNB are reportedly evaluating several civilian nuclear options, including third-generation nuclear fission reactors.

“Insofar as the kind of technologies that we (Malaysia) are considering, whether it is from Korean or Russian or American or British or French, we kind of have to be a little bit more agnostic because we need to find the one that is fit for purpose in this region. Now, people have been saying the Americans and the Russians have got a bit of a lead because, think about it, aircraft carriers carry nuclear reactors at risk. So it's already a floating solution.”

“I think we need to consider all the attributes of what makes it secure. This is another one where you have to make sure you can take on the cost of delivering nuclear energy because it's super expensive to build. Once built, the ongoing operating expenditure (opex) is very low,” said a source close to the deal.

Among other candidates, Malaysia is also examining Canada’s progress with small modular reactors (SMRs), which are widely regarded as particularly suitable for data centre applications. Through its SMR Action Plan, Canada is accelerating nuclear deployment and generating broad economic and industrial benefits.

The source also highlighted floating power units (FPUs) as a viable option, noting their suitability for coastal nations. This assessment aligns with insights from Rosatom, the Russian state corporation specializing in nuclear energy, non-energy nuclear products, and high-tech manufacturing.

Whether Malaysia ultimately selects SMRs, FPUs, or third-generation fission reactors, multiple technical, economic, and regulatory factors must be weighed as the country targets nuclear integration into its generation mix by 2031.

Defining the Optimal Deployment Timeline

Shan suggested that a credible timeline would see the first nuclear plant coming online between 2038 and 2042. “The strategy is about turning ambition into architecture. Compute capacity ultimately depends upon energy capacity. Build institutions first, contracts second and concrete last,” he added.

Citing Wood Mackenzie, which models Malaysian SMR deployment beginning in 2035 and scaling to 1.2 GW by 2050, Shan outlined a phased approach. “The 2026–2030 period should prioritise legislation, workforce development, site evaluation, independent regulation, financing, waste management and ring-fenced decommissioning provisions,” he said.

Meanwhile, an industry specialist emphasized that given Malaysia’s current growth trajectory and the rapid proliferation of regional data centres, nuclear energy is increasingly unavoidable. To maintain economic competitiveness and harness AI—which requires sovereign control over data infrastructure to ride the next industrial wave—the country must secure baseload power. “Six industrial waves have been driven by AI. And you can't have that without nuclear,” the specialist concluded.