Malaysia's data centers are consuming record levels of electricity as temperatures climb, compounding the country's challenge of filing a huge demand gap with gas-fired power as it phases out coal, Reuters reported.

The share of data centers in overall power consumption surged to a record 9.3% in the second week of August, compared with an average of 7% this year, said Siti Safinah Salleh, CEO of state energy regulatory Energy Commission. 

Data centers could account for up to 31% of Malaysia's power demand by 2035, according to Zaharin Zulkifli, deputy director for economic statistics and research at the Energy Commission.

To meet the surging power demand, Malaysia must add 9 GW of gas-fired capacity by 2032 as it gradually retires coal plants. The country plans to shut its last coal-fired power plant by 2044.

Malaysia is attracting billions in investment from global tech firms including Amazon and Microsoft, leveraging domestic gas reserves to meet rising power demand and bucking a regional decline in gas-fired generation as the Iran war disrupts LNG imports.

With no additional gas-fired power expected online this year or next, Malaysia will optimize its current fleet to address demand through end-2027, Siti said. Hot weather has also left hydro dams at very low levels, though she said the commission did not anticipate extreme heat persisting beyond early September.

Despite the pressures, Sprint DC Consulting senior manager Gary Goh said Malaysia does not face near-term power shortages from data center growth, with demand remaining within grid planning parameters.