Resource-constrained capacity expansion planning under rapid data centre growth in Peninsular Malaysia

Malaysia has committed to achieving net-zero emissions and targeted to achieve 70% renewable energy capacity by 2050, driven primarily by large-scale solar development. At the same time, the country is also experiencing increasing electricity demand due to growing data centre development in Peninsular Malaysia. However, rapid solar expansion demonstrates significant land use and requires a more stable and reliable grid infrastructure. To tackle these issues, this study presents a novel multiperiod, multi-node capacity expansion planning model to identify least-cost energy transition pathways for Peninsular Malaysia from 2025 to 2050 under varying resource constraints scenarios. Results indicate that cumulative installed capacity needs are expected to increase by approximately 1.9 times over the planning horizon. Under the least-cost pathway, solar power dominates the generation mix, accounting for more than 59% of total installed capacity by 2050. However, the results indicate that large-scale solar deployment can occupy up to 81.4% of available empty land. As such, this study also explored three land-use reductions strategies. On top of this, achieving such high solar penetration requires adequate grid infrastructure to maintain system reliability. Without timely grid enhancement, the system becomes more reliant on natural gas generation, resulting in higher system costs and leads to lower emissions reduction. Overall, this study presents a resource-constrained energy planning framework that integrates demand growth, grid readiness, and land-use considerations within a single framework, providing insights to support coordinated energy transition and rising electricity demand driven by the rise in digital economy in Peninsular Malaysia.