Green ambitions, diesel reality

THE announcement that Kawan Renergy Bhd has secured a RM70.37mil contract to supply diesel generator systems for a data centre (DC) operator in Malaysia is a timely reminder of the energy realities underpinning the country’s digital ambitions.

It has long been understood that DCs have been striving to increase their use of renewable energy (RE) to meet the commitments of their offtakers, typically major global technology companies.

This is part of the reason Malaysia is expanding its pipeline of large-scale solar projects, as well as developing new gas-fired power plants and extending existing ones.

Gas is widely regarded as a transition fuel in the country’s energy mix and is expected to continue playing a key stabilising role as renewable capacity scales up.

However, it is indeed an eye-opener that DC operators typically still rely on diesel-powered backup systems to guarantee uninterrupted operations in the event of grid disruptions.

This is to ensure the near-zero downtime requirements that define the sector.

Diesel generators are ­expensive, noisy, and highly polluting.

In Texas, United States, for example, diesel generators used as backup power are permitted as long as the hours they run don’t exceed 10% of the annual runtime of the primary power source.

It is unclear whether Malaysia imposes similar conditions on the many hyperscale DCs being built.

A recent report by non-profit news organisation Inside Climate News highlights growing scrutiny of diesel reliance in the DC industry.

Microsoft, for instance, reported a rise in emissions between fiscal years 2020 and 2024.

That said, the tech giant reiterated its target of becoming carbon negative by 2030 and plans to phase out petroleum-based diesel generators as backup power at its DC by then, partly by adopting “renewable diesel variations and procuring hydrogenated vegetable oils”.

This has also prompted growing interest in alternative backup solutions such as battery energy storage systems (Bess), which companies including Microsoft are exploring and piloting in selected DC setups.

Bess is beginning to feature in Malaysia, alongside the expansion of RE and DC investments, although deployment remains at an early stage.