Data Centre Electricity Supply Application

Key Takeaways

This article explains data centre electricity supply application in Malaysia, including technical assessment, connection requirements and payments before a data centre can be connected and energised.

Large data centres require detailed technical assessment by TNB, including consideration of demand, supply voltage, network capacity, system security and the location of the proposed connection.

A data-centre connection may involve new connection infrastructure, existing network assets and reinforcement of the wider electricity system.

Connection charges and electricity tariffs are different: connection charges relate to establishing or upgrading supply infrastructure, while tariffs apply to electricity consumed after the connection is energised.

The connection process may also involve land, substations, cables, transmission infrastructure, metering, protection systems, testing and commissioning.

Understanding what is required to connect a data centre provides the foundation for the next questions: how electricity is priced, how infrastructure costs are recovered, and ultimately who bears the costs of the wider electricity system.

From Electricity System to Electricity Connection

In →E07 The Electricity System Supplying Malaysia’s Data Centres, we followed electricity backwards from a data centre to the wider electricity system.

We examined how electricity moves from generation through high-voltage transmission networks, substations and lower-voltage distribution networks before reaching consumers. We also explained why very large electricity users may require connections at 132 kV or 275 kV rather than the lower voltages normally associated with ordinary consumers.

But understanding the physical electricity system raises another question:

What actually happens when a large data-centre developer asks to connect a new facility to that system?

A data centre does not simply request a certain number of megawatts and connect to the nearest electricity line.

For a large project, the electricity supply application is an infrastructure-planning exercise involving the prospective customer, electrical consultants, TNB and, depending on the project, other authorities and stakeholders.

The process involves determining the expected electricity demand, assessing the capability of the surrounding network, establishing an appropriate supply scheme, identifying the infrastructure required to make the connection, coordinating land and development requirements, agreeing technical arrangements and eventually completing construction, testing and energisation.

TNB’s Electricity Supply Application Handbook (ESAH) provides the public framework for supply applications, connection planning and related requirements. TNB’s current ESAH is organised into sections covering supply applications, connection guidelines, metering guidelines, definitions and appendices.

This article therefore moves from the question “What is the electricity system?” to the more practical question “How does a major customer become connected to it?”

The distinction is important because the physical connection of a data centre can involve infrastructure extending beyond the boundary of the development itself.

→E01 explained what a data centre is.

→E03 explained why data centres require substantial mechanical and electrical infrastructure to operate continuously.

→E07 then followed one of the most fundamental inputs identified in →E02 — electricity backwards from the data centre to the wider electricity system.

This article takes the next step by examining how that electricity supply is actually planned and connected.

MDCO Insight： A large electricity connection is not simply a commercial request for power; it is a technical and infrastructure-planning process involving both the customer and the wider electricity system.

Who Initiates the Application?

The electricity supply application begins with the proposed consumer or developer identifying the electricity requirement for the development.

For a data centre, this is particularly significant because the anticipated electricity demand can be very large and may increase substantially as additional phases are developed.

The applicant therefore needs to provide TNB with sufficient information to understand what is being proposed.

The developer or prospective customer

The developer is responsible for establishing the requirements of the proposed facility.

Depending on the project and stage of development, this may include information such as:

the development location;
the proposed development programme;
the anticipated maximum demand;
connected load;
proposed phasing;
expected energisation requirements;
and other information necessary for electricity-supply planning.

The important point is that the electricity application has to be based on an identifiable development requirement rather than simply an informal request for “large power”.

The electrical consultant

For larger developments, the technical information supporting the application is normally prepared with the involvement of an electrical consultant or other appropriately qualified professional.

This becomes increasingly important as the size of the proposed connection increases.

TNB’s connection guidance states that declared maximum demand should be supported by connected-load and design calculations. Its ESAH also provides a specific checklist for electricity supply applications exceeding 100A and documentation relating to consultant engineer.

The role of the consultant is therefore not merely administrative.

The consultant helps translate the proposed development into an electrical requirement that can be assessed by the utility.

TNB

TNB then evaluates the proposed requirement against the electricity system.

Among the questions are:

What voltage level is appropriate?
Is sufficient network capacity available?
Where should the connection be made?
What infrastructure is required?
What level of supply security is appropriate?
Will reinforcement be necessary?
Can the proposed supply be accommodated without compromising system performance?

TNB’s connection guidelines state that supply schemes are designed based on the consumer’s declared demand and required security level.

This creates an important distinction:

The developer identifies the electricity requirement; TNB determines how that requirement can be accommodated within the electricity system.

Establishing the Maximum Demand

One of the most important pieces of information in an electricity-supply application is the maximum demand.

Maximum demand should not be confused with the total amount of electrical equipment installed at a site.

A data centre may contain:

servers and other IT equipment;
cooling equipment;
pumps and fans;
lighting;
security systems;
building services;
auxiliary equipment;
and redundant equipment.

The total connected load can therefore be substantially different from the maximum electrical demand expected to occur simultaneously.

For electricity-system planning, however, the utility needs to understand the demand that the network may actually have to accommodate.

Connected load

Connected load broadly represents the aggregate electrical capacity of equipment connected to the customer’s electrical installation.

Maximum demand

Maximum demand represents the highest level of electrical demand expected to be imposed on the supply system under the relevant operating conditions.

The distinction matters because infrastructure has to be designed around the demand that the network may have to serve, rather than simply the sum of every piece of equipment installed.

TNB’s connection guidelines emphasise the importance of accurate demand estimation for dimensioning network facilities and accommodating both initial and future demand. For development areas, TNB states that total demand influences the supply voltage and target network configuration.

For a large data centre, demand forecasting can become particularly important because:

the facility may operate continuously;
IT load can be substantial;
cooling systems operate alongside the IT load;
redundancy may increase installed equipment;
additional data halls may be constructed later;
and the electricity requirement may increase substantially during subsequent development phases.

This means that electricity-system planning needs to consider not only the first stage of a project, but potentially its planned development trajectory.

kW and kVA

Electricity demand can also be expressed using different electrical quantities.

kW represents real power — the portion of electrical power converted into useful work or heat.

kVA represents apparent power and takes account of both real and reactive components of an AC electrical system.

This distinction becomes particularly relevant because TNB’s published supply schemes for large consumers are expressed in terms of maximum demand in kVA. TNB’s connection information also specifies power-factor requirements, including a minimum power factor of 0.90 for consumers supplied at 132 kV and above.

For the purposes of this article, the important point is simply that the utility must understand the electrical characteristics of the proposed load, not merely its headline energy consumption.

MDCO Insight: The size of a data centre’s electricity connection is determined not simply by how much equipment it contains, but by the electrical demand and characteristics that the network must be capable of supplying.

Determining the Supply Voltage

Once the anticipated demand is established, the next question is:

At what voltage should the data centre be supplied?

As explained in →E07, Malaysia’s electricity system operates through a hierarchy of voltage levels.

TNB’s published information identifies:

500 kV, 275 kV and 132 kV transmission networks;
33 kV and 11 kV distribution networks;
400/230 V low-voltage supply;
and 22 kV and 6.6 kV distribution voltages in certain parts of Johor and Perak.

The supply voltage provided to an individual customer depends substantially on the magnitude of the customer’s maximum demand.

TNB’s public supply information identifies, as general supply options:

11 kV for maximum demand of approximately 1,000–5,000 kVA;
22 kV for approximately 1,000–10,000 kVA in applicable areas;
33 kV for approximately 5,000–25,000 kVA;
132 kV and 275 kV for exceptional high-load customers above 25,000 kVA.

TNB’s more detailed connection guidelines establish minimum supply schemes for individual consumers. For maximum demand between 25,000 kVA and below 100,000 kVA, the published minimum scheme is direct supply through a TNB 132 kV or 275 kV substation, while 100,000 kVA and above is specified at 275 kV. TNB also states that it retains the right to provide alternative arrangements based on factors including location, economic considerations and system security.

This distinction is important.

A 132 kV or 275 kV connection should not be understood as a special privilege created specifically for data centres.

Rather, it reflects the scale of the electrical demand and the characteristics of the network required to serve it.

The same principle applies to other exceptionally large electricity consumers.

In other words:

The electricity system responds to the magnitude and characteristics of the load, not simply the industry label of the customer.

For data centres, however, this becomes particularly significant because individual facilities can reach demand levels that place them within the high-voltage connection categories.

TNB’s System Capability Study

Knowing the size of the proposed load and the nominal supply voltage does not by itself establish whether a connection can be provided.

The next question is whether the surrounding electricity system is capable of supplying the proposed load safely and reliably.

This is where system planning and capability assessment become important.

TNB’s connection guidelines state that supply schemes are based on the customer’s declared demand and required security level. The guidelines also state that if TNB’s system analysis and study determine that a higher supply scheme is necessary to provide quality supply, that higher requirement prevails.

The practical implication is that the published supply-voltage categories should be understood as a planning framework, rather than a guarantee that every project within a particular demand range will receive an identical connection.

Network capacity

The first question is whether sufficient capacity is available.

An existing transmission line or substation may already be serving other customers. The question is therefore not simply whether electricity exists somewhere nearby, but whether sufficient additional capacity is available at the relevant point of connection.

Substation capacity

The available capacity of the relevant substation and transformers must also be considered.

A site may be physically close to a major substation but that does not necessarily mean that the substation has sufficient spare capacity to accommodate a very large new load.

Transmission constraints

The wider transmission network may also influence the connection.

A new large load can change the pattern of electricity flows through the network. The relevant assessment therefore cannot always stop at the nearest substation.

Voltage performance

Large loads can affect voltage conditions on the network.

TNB’s published connection criteria specify voltage-performance requirements under both normal and contingency conditions. For 132 kV and 275 kV systems, for example, the published planning criteria specify ±5% under normal conditions and ±10% under contingency conditions.

Thermal loading

Transmission lines, cables, transformers and other network components have physical operating limits.

The network therefore needs to be capable of carrying the additional demand without unacceptable thermal loading.

Fault levels and protection

The electrical system must also be capable of safely managing faults.

TNB publishes short-circuit ratings for different voltage levels, and equipment connected to its supply must comply with the applicable requirements.

This is particularly relevant at high-voltage connection points because the electrical characteristics of the network become increasingly significant.

System security and contingency

Electricity networks are not normally designed on the assumption that every component will operate perfectly at all times.

Equipment can fail, circuits can be taken out for maintenance and other contingencies can occur.

TNB’s connection guidelines therefore include supply-security considerations in determining appropriate supply schemes.

A major new load has to be considered within this broader security framework.

Future demand

Finally, the assessment cannot necessarily be limited to the proposed data centre alone.

Other developments may also be connecting to the same area.

TNB’s guidelines emphasise the importance of accurate demand estimates for both initial and future demand and state that network facilities for development areas are developed in phases in accordance with physical development.

This introduces an important systems perspective:

A large electricity connection is assessed within the network that exists today, but electricity infrastructure must also anticipate the network that will be required tomorrow.

MDCO Insight: The electricity connection assessment asks not only whether power can reach the site today, but whether the wider network can accommodate the new load safely, reliably and sustainably as demand evolves.

Determining the Supply Scheme

Once the electricity demand and system requirements have been assessed, an appropriate supply scheme can be established.

The supply scheme describes, in physical and technical terms, how the customer will be connected to TNB’s electricity system.

It can involve decisions concerning:

supply voltage;
number of circuits;
connection point;
substations;
transformers;
switching arrangements;
protection systems;
metering;
network configuration;
and the level of supply security required.

For large consumers, the relationship between maximum demand and supply scheme becomes particularly important.

TNB’s current connection guidelines identify minimum supply schemes for different demand levels. For individual consumers with maximum demand between 25,000 kVA and below 100,000 kVA, the published scheme is direct supply through a TNB 132 kV or 275 kV substation. For 100,000 kVA and above, the published minimum scheme is direct supply through a TNB 275 kV substation.

But these should not be interpreted as rigid one-size-fits-all arrangements.

TNB explicitly states that it may provide alternative arrangements after considering location, economic and system-security factors. It also states that a higher supply scheme may prevail if required following system analysis and study.

This means that two data centres with apparently similar maximum demand could potentially have different connection arrangements if they are located in different parts of the network.

The physical electricity system matters.

Minimum scheme versus actual arrangement

This distinction is worth emphasising.

A published supply category tells the developer what level of supply arrangement should generally be expected based on demand.

The actual connection, however, is determined through the technical assessment of the particular project and its relationship with the surrounding network.

This may depend on:

the available network;
the proposed connection location;
existing and future loads;
system security requirements;
infrastructure constraints;
and other technical and economic considerations.

The supply scheme therefore represents the point where the proposed development begins to become a specific electricity-infrastructure project.

Planning the Physical Connection

A supply scheme eventually has to become physical infrastructure.

The electricity does not simply arrive at the boundary of the data centre because the application has been approved.

Depending on the project, the connection may require infrastructure such as:

transmission lines;
underground high-voltage cables;
transmission substations;
Transmission Main Intake (PMU) facilities;
transformers;
switchgear;
protection systems;
metering;
control and communication systems;
and other connection facilities.

The exact combination depends on the approved supply arrangement and the characteristics of the site.

The importance of the connection point

A major question is where the data centre will physically connect to the electricity network.

The nearest transmission facility is not necessarily the appropriate connection point.

The technically appropriate location depends on:

available capacity;
voltage level;
network configuration;
security requirements;
route feasibility;
and other system-planning considerations.

This is one reason why the location of a data centre matters to its electricity supply.

A development located close to an appropriate transmission facility may have a very different physical connection requirement from an otherwise identical development located further away or in an area with limited available capacity.

Land is part of electricity infrastructure planning

Electricity infrastructure also requires physical space.

TNB’s connection guidelines state that adequate land areas for transmission main intakes, major distribution stations, substations, feeder pillars and cable or overhead-line routes need to be allocated at appropriate development-planning stages.

For large development areas, TNB states that developers may be required to allocate land for substations and wayleaves or rights of way for 132 kV and 275 kV lines, with requirements specified by TNB following submission of tentative layouts and load estimates during the pre-consultation stage.

This means that electricity infrastructure can influence the physical planning of a development before the data centre itself is operational.

The relationship therefore runs in both directions:

Development planning influences electricity infrastructure planning.

But:

Electricity infrastructure requirements can also influence development planning.

The connection is more than a cable

This is an important point to carry forward into the later MDCO analysis.

When a large data centre connects to the electricity system, the resulting infrastructure may involve a combination of:

existing network infrastructure + dedicated connection infrastructure + network infrastructure that may need to be reinforced or expanded.

At this stage, however, this article deliberately does not answer the financial question of who pays for each category.

That question requires a separate examination of TNB’s connection-charge mechanisms, tariff structure and the regulatory treatment of network assets.

It is the subject of the articles that follow.

MDCO Insight: Connecting a major data centre to the electricity system is a physical infrastructure project involving not only the customer’s site, but potentially substations, transmission routes, connection facilities and the wider network surrounding it.

The Electricity Supply Application Process

For a major development, the electricity-supply application is not a single form submitted immediately before the facility requires power.

It is a process that develops alongside the project.

TNB’s current Electricity Supply Application Handbook (ESAH) provides separate guidance for applications exceeding 100A and sets out a process involving the applicant, electrical consultant, TNB and the wider development-approval process. TNB states that its ESAH digital platform provides the requirements, regulations and timelines for electricity supply applications, connections and metering.

For a large data centre, the process can broadly be understood through several stages.

Initial planning and pre-consultation

The process begins with the developer and its electrical consultant establishing the proposed development and its electricity requirements.

This includes determining:

the location of the development;
proposed maximum demand;
development phases;
anticipated energisation dates;
proposed site layout;
substation requirements;
and other information needed for TNB to assess the proposed supply.

For large developments, early engagement is particularly important because the electricity connection may influence the physical planning of the development itself.

TNB’s ESAH provides for the submission and review of development information, including the location and size of substations and associated infrastructure.

Technical assessment

TNB then assesses the proposed demand against the electricity network.

This is where the general supply principles described in E07 become specific to an individual project.

The assessment may consider:

available network capacity;
proposed supply voltage;
connection point;
supply security;
network configuration;
substation requirements;
cable or overhead-line routes;
protection;
metering;
and other technical requirements.

TNB’s connection guidelines state that its planning and design criteria are developed with reference to the Grid Code for Peninsular Malaysia and Distribution Code for Peninsular Malaysia, Sabah and the Federal Territory of Labuan.

Agreement of technical requirements

For applications exceeding 100A, TNB describes a joint meeting involving TNB, the electrical consultant engineer and the applicant.

The purpose is to review and agree the technical requirements, including matters such as:

substation details;
cable or overhead-line routes;
metering arrangements;
meter location;
and other connection requirements.

Following this process, TNB issues its final proposal and the electrical consultant confirms acceptance on behalf of the applicant.

This is an important stage because the proposed electricity connection moves from a general development requirement to a defined engineering arrangement.

From Technical Proposal to Connection Charges

Once the technical requirements have been established, the process reaches an important financial stage.

TNB issues a Notice of Connection Charges based on the accepted final proposal.

The applicant or its electrical consultant then makes the required payment before the connection infrastructure proceeds under the applicable process. TNB’s ESAH expressly identifies Connection Charges as a stage following acceptance of the final technical proposal.

This introduces an important distinction between two concepts that are sometimes treated as if they were the same:

Connection charges are associated with establishing or upgrading the electricity infrastructure required to provide the requested supply.

Electricity tariffs are the charges subsequently applied to electricity consumption and other applicable billing components once the customer begins taking supply.

They perform different functions.

The connection charge is therefore associated with getting connected.

The tariff is associated with using electricity after connection.

This distinction will become particularly important in the next article, →E07.02 — Understanding Electricity Tariffs in Malaysia, and later in the A10 series.

What Are Connection Charges?

TNB defines a Connection Charge as an upfront payment made by consumers requiring new electricity-supply infrastructure or an upgrade of existing infrastructure to accommodate additional power supply. TNB describes the charge as part of the cost of building the infrastructure required for the electricity connection.

The current TNB Connection Charges Book classifies consumers according to voltage level, including:

low voltage;
medium voltage;
high voltage; and
extra-high voltage.

The 2025 Connection Charges Book identifies 132 kV as high voltage and 275 kV as extra-high voltage for the purpose of connection-charge classification.

This is relevant to data centres because large facilities are commonly associated with the high-voltage connection arrangements discussed in →E07.

However, the existence of a connection charge should not be interpreted as meaning that every item of electricity infrastructure used by a customer is necessarily individually charged to that customer.

That is a much more complicated question.

A connection can involve:

new infrastructure + existing infrastructure + infrastructure upgrades or reinforcement.

The rules governing how those costs are treated depend on the applicable connection-charge framework, voltage level, distance, infrastructure requirements and other circumstances.

TNB’s published Connection Charge information, for example, distinguishes between consumer categories and sets out different charging mechanisms according to voltage level.

This is precisely why the financial analysis needs to be separated from the technical explanation.

Connection Charges Are Not the Same as the Cost of the Entire Electricity Network

This distinction is central to the MDCO series.

A data centre may pay a connection charge when establishing its electricity supply.

But the electricity it subsequently receives may travel through an extensive network containing infrastructure that existed long before the data centre was proposed.

For example, the wider system may contain:

existing transmission lines;
existing substations;
existing transformers;
existing distribution networks;
control and protection systems;
land and rights of way;
and other assets forming part of the electricity system.

The data centre does not necessarily construct all of these assets simply because it uses them.

At the same time, a new data centre may require:

a new connection circuit;
a new substation;
additional transformers;
new cables;
network reinforcement;
or other infrastructure.

The important question is therefore not simply:

“Does the data centre pay a connection charge?”

The more useful question is:

“What infrastructure does the connection charge cover, and how does that infrastructure relate to the wider electricity network?”

That distinction will form an important part of the further research series.

For this article, however, it is sufficient to establish that a connection charge is part of the process of establishing or upgrading supply infrastructure. TNB’s published materials separately provide information on tariffs and other charges.

MDCO Insight: Paying a connection charge establishes a financial obligation associated with providing electricity supply, but it does not by itself answer the broader question of who ultimately bears the cost of the electricity system as a whole.

Other Payments and Financial Requirements

Connection charges are not necessarily the only financial matters associated with an electricity supply application.

TNB’s supply-application information identifies other potential payments and requirements depending on the nature of the application.

For ordinary applications, these can include items such as:

connection charges;
security deposits;
stamp duty;
and charges associated with special requirements.

For applications exceeding 100A, TNB states that the applicant settles the Connection Charges after the relevant approval and completion of TNB’s work plan.

TNB also states that applicants requesting additional requirements or special features may be required to bear the full cost of those requirements.

These distinctions matter because the total financial commitment associated with establishing a supply should not automatically be described as one single “connection cost”.

Different payments can arise from different requirements and serve different purposes.

Land, Substations and Development Responsibilities

Electricity infrastructure requires land as well as electrical equipment.

This can become particularly significant for large developments.

TNB’s ESAH states that applicants may need to provide substation land and buildings to TNB, including arrangements involving transfer or lease at a nominal value under the applicable requirements.

For larger development areas, TNB’s connection guidelines also address the allocation of land and routes for electricity infrastructure.

This means that part of the infrastructure needed to supply a development can become integrated into the development-planning process itself.

The relationship can therefore involve several different contributions:

TNB

electricity network planning;
network infrastructure;
technical assessment;
installation of specified electrical equipment;
commissioning and operation of TNB assets.

Developer / applicant

development information;
electrical consultant;
required site facilities;
applicable connection charges;
and, where required, land or buildings for electricity infrastructure.

The precise division depends on the supply arrangement and applicable requirements.

This is another reason why the simple statement that “the developer pays for the electricity infrastructure” can be misleading.

There may be infrastructure that the developer provides, infrastructure that TNB provides, infrastructure transferred to TNB, and infrastructure that forms part of a much wider network.

Construction and Installation

After the technical requirements and financial arrangements have been established, the physical infrastructure can be constructed.

For large applications, TNB’s ESAH provides for a pre-start work discussion following payment of the Connection Charges.

The actual construction arrangements depend on the approved supply scheme.

They may involve:

construction of substations;
installation of cables;
construction of overhead lines;
civil works;
installation of switchgear;
protection and control systems;
metering facilities;
and other associated infrastructure.

TNB also provides for a turnkey concept in certain circumstances, under which an applicant may undertake the planning and installation of specified electrical systems according to TNB’s requirements and subsequently hand the completed system over to TNB. TNB retains discretion over whether a turnkey arrangement is permitted.

This illustrates another important feature of the electricity-supply process:

The person paying for, constructing, owning and operating a particular piece of infrastructure are not necessarily always the same party.

The precise arrangement depends on the asset and the approved connection scheme.

This distinction will become increasingly important when MDCO examines infrastructure cost allocation in the A10 series.

Testing, Metering and Energisation

Construction does not mean that electricity can immediately be switched on.

Before energisation, the relevant infrastructure has to be completed, inspected, tested and accepted in accordance with the applicable technical requirements.

For supply applications exceeding 100A, TNB’s published process includes:

completion of the substation site and building where applicable;
handover according to TNB requirements;
installation of electrical equipment and associated systems;
commissioning;
meter application;
and finally energisation of the supply.

For high-voltage and medium-voltage supplies, TNB states that energisation is carried out in the presence of an Electrical Testing Engineer.

This final stage illustrates why the electricity connection process can extend over a substantial period for a major project.

The physical facility may be substantially complete, but the electricity infrastructure must also be ready.

For a data centre, this is particularly important because the availability of a reliable electrical supply is fundamental to the facility’s ability to commence or expand operations.

The Connection Process as a System

Viewed as a whole, the electricity-supply process can be simplified into the following sequence:

Development requirement
↓
Electricity demand assessment
↓
Application through electrical consultant
↓
TNB technical assessment
↓
Supply voltage and connection scheme
↓
Agreement of technical requirements
↓
Connection Charge assessment
↓
Payment and, where applicable, infrastructure agreement
↓
Construction and installation
↓
Testing and commissioning
↓
Metering
↓
Energisation

This sequence should not be interpreted as a universal project schedule. Actual requirements and timing depend on the development, its supply arrangement, approvals, infrastructure requirements and TNB’s assessment.

Nevertheless, it provides a useful conceptual framework.

The key point is that electricity supply to a major data centre is a planned infrastructure process, rather than simply a commercial purchase of electricity.

What This Process Tells Us About Large Data Centres

Several observations emerge from the process described above.

First, electricity demand becomes an infrastructure question

For an ordinary consumer, the electricity connection may appear almost invisible.

For a very large data centre, the magnitude of demand can require dedicated infrastructure and detailed network assessment.

The customer’s electricity requirement therefore becomes a matter of electricity-system planning.

Second, location matters

The supply arrangement depends not only on the size of the proposed load but also on where that load is located.

Two facilities with similar demand can present different connection requirements because their relationships with the existing electricity network are different.

Third, the connection can involve infrastructure beyond the site

A major electricity connection can involve transmission lines, substations, cables, transformers, protection systems and other assets outside the data-centre boundary.

Fourth, the electricity network is both an existing system and a developing system

The customer connects to infrastructure that may have existed for many years, while simultaneously creating requirements for new or upgraded infrastructure.

This creates the central issue that the subsequent MDCO research will examine.

From Connection to Consumption

Once the data centre has been connected and energised, another financial relationship begins.

The customer starts consuming electricity.

That electricity is billed according to the applicable tariff and other applicable charges.

The tariff system is therefore distinct from the connection process described in this article.

A simplified distinction is:

Stage	Principal question
Connection	What infrastructure is required to provide the electricity supply?
Connection charges	What charges apply in establishing or upgrading that supply?
Electricity tariff	How is electricity consumption subsequently charged?
Network cost allocation	How are wider electricity-system costs ultimately recovered?

The first three questions can be examined using TNB’s published supply, connection and tariff information.

The fourth question is more complex.

It involves the regulatory framework governing electricity tariffs, the Incentive-Based Regulation framework, tariff categories, network costs, generation costs and the way costs are allocated across different classes of consumers.

That is why MDCO will treat it as a separate research question rather than attempting to answer it within an introductory article on the connection process.

The Questions That Remain

E07.01 has followed the process from a developer’s electricity requirement to an energised connection.

We have established that a large data centre:

declares a substantial electricity demand;
engages an electrical consultant;
submits an electricity-supply application;
undergoes technical assessment;
receives an appropriate supply arrangement;
may require substantial physical connection infrastructure;
is subject to applicable connection charges and other requirements;
and eventually receives an energised electricity supply.

But the process raises several questions that cannot be answered simply by looking at the connection application.

For example:

How are electricity tariffs structured in Malaysia?
What is the tariff applicable to large high-voltage customers?
How are generation, transmission and distribution costs reflected in the tariff framework?
What is the relationship between connection charges and electricity tariffs?
How are network costs allocated between different categories of consumers?

These questions become increasingly important as the size and concentration of data-centre demand increase.

They are also important beyond the data-centre industry.

A large new electricity load does not exist in isolation. It becomes part of an electricity system that also serves factories, commercial buildings, offices, households and other consumers.

Understanding how the costs and benefits of that system are allocated therefore requires moving beyond the physical connection process.

That is the subject of the next articles.

The Observatory Perspective

The purpose of this article is not to determine how much data centres are paying for their electricity infrastructure.

That would require a much deeper examination of the applicable charging mechanisms, regulatory framework, tariff structure and treatment of network assets.

Instead, this article establishes the physical and administrative pathway through which a large electricity customer becomes connected to Malaysia’s electricity system.

The process demonstrates that a major data centre is not simply a building that happens to consume a large quantity of electricity.

Its electricity requirement can influence:

the required voltage level;
the connection point;
substation requirements;
transmission or cable routes;
network studies;
system-security considerations;
land requirements;
construction requirements;
and the timing of infrastructure delivery.

At the same time, the data centre ultimately becomes one customer within a much larger electricity system.

This creates an important distinction between the infrastructure required to connect a customer and the wider infrastructure that enables the electricity system to function.

That distinction will be central to MDCO’s forthcoming analysis.

→E07.02 — Understanding Electricity Tariffs in Malaysia will next examine how electricity consumption is priced, including the structure of tariffs applicable to different customer categories and the relationship between tariff components and the wider electricity system.

A separate new series will then move from explanation to analysis.

It will examine more directly:

Who pays for the electricity infrastructure that supplies Malaysia’s data centres?

That question cannot be answered simply by identifying the connection charge paid before energisation.

It requires the wider system to be considered — including infrastructure already in place, infrastructure built specifically for new connections, network reinforcement, generation assets and the mechanisms through which electricity-system costs are ultimately recovered.

MDCO Insight: Understanding how a data centre connects to the electricity system is only the beginning; the more difficult question is how the costs of that system are ultimately distributed among the many stakeholders.

Selected References

Electricity System and Connection Infrastructure

Tenaga Nasional Berhad (TNB) – Electricity System and Supply Application: Official information on Malaysia’s electricity system, including transmission and distribution voltage levels, system characteristics and the Electricity Supply Application Handbook (ESAH). https://www.tnb.com.my/esah/supply-application
Tenaga Nasional Berhad (TNB) – Electricity Supply Application Handbook (ESAH): Technical guidance on electricity supply applications, planning criteria, supply schemes, connection arrangements and requirements for different customer demand levels. https://www.tnb.com.my/esah/
Tenaga Nasional Berhad (TNB) – Connection Guidelines: Guidance on planning and design criteria, demand estimation, supply schemes and the development of connection infrastructure. https://www.tnb.com.my/esah/connection-guidelines

Electricity Grid and Distribution Regulation

Suruhanjaya Tenaga – Grid Code for Peninsular Malaysia: The principal technical framework governing the planning, development and operation of the Peninsular Malaysia electricity grid, including the current 2025 Main Code and Additional Code. https://www.st.gov.my/resources/grid-code-peninsular-malaysia-main-code-2025
Suruhanjaya Tenaga – Distribution Code: Technical requirements governing the planning, development and operation of distribution systems and the interface between distribution-system operators and users, including large power consumers. https://www.st.gov.my/resources/distribution-code-peninsular-malaysia-sabah-ft-labuan-amendments-2017
Suruhanjaya Tenaga – Electricity Supply Industry and Regulatory Framework: Official information on the statutory and regulatory framework governing electricity generation, transmission, distribution and supply in Malaysia. https://www.st.gov.my/about-us

Electricity Infrastructure and System Planning

Suruhanjaya Tenaga – Grid System Operation: Official information on grid-system operation, including supply-demand adequacy, transmission-network constraints, generation and system performance. https://www.st.gov.my/security/grid-system-operation
Suruhanjaya Tenaga – Electricity Supply Industry Regulatory Documents: Official repository of legislation, regulations, codes, standards, guidelines and other regulatory instruments governing Malaysia’s electricity sector. https://www.st.gov.my/ms/tentang-kami/perundangan

Citation

Malaysia Data Centre Observatory (MDCO). E07.01 Applying for Electricity Supply to a Data Centre in Malaysia. MDCO Explain Series.

MDCO Note

This article forms part of the Malaysia Data Centre Observatory (MDCO) Explain Series, which aims to improve public understanding of data centre development through evidence-based, accessible and balanced analysis. It is intended for educational and informational purposes only and does not constitute legal, engineering, planning, environmental or professional advice.

Malaysia’s rapidly evolving data centre ecosystem includes facilities developed, owned or operated by organisations such as AirTrunk, Amazon Web Services (AWS), Bridge Data Centres, DayOne, EdgeConneX, Google, K2 Data Centres, Microsoft, NTT Global Data Centers, Princeton Digital Group (PDG), ST Telemedia Global Data Centres (STT GDC), STACK Infrastructure, Vantage Data Centers, YTL Data Centre Park and many others. MDCO is independent of these organisations, as well as governments, regulators, utilities and advocacy groups. Its role is to facilitate transparency, structured understanding and equal access to information by presenting publicly verifiable evidence, relevant context and multiple stakeholder perspectives. MDCO does not endorse, oppose or advocate for any particular organisation, project or policy position.