Why energy management is critical for data centers

Abhinav Harikumar, Vice President of ABB’s Energy Industries division, Southeast Asia shares how ABB is working with the government and private sector to deal with the energy problem as well as the emerging technologies available to enhance energy management.

As data centers continue to be built in Southeast Asia, one of the biggest obstacles to the industry is energy. Given that data centers require high amounts of energy to operate efficiently, having sufficient access to energy is imperative.

Most modern data centers that are being built today use emerging technologies that are capable of being more energy efficient. However, there is still a need to ensure that the energy supply to these data centers is sufficient.

CRN Asia speaks to Abhinav Harikumar, Vice President of ABB’s Energy Industries division, Southeast Asia to understand more about the challenges in the energy industry, especially when it comes to powering data centers.

Looking specifically at Malaysia’s data center industry, which is also one of the fastest growing data center markets in the world, Harikumar explains how ABB is working with the government and private sector to deal with the energy problem as well as the emerging technologies available to enhance energy management.

What is the biggest challenge in Malaysia right now when it comes to energy?

Malaysia’s economy is still growing, and with that comes a natural increase in energy demand. Rapid economic growth, rising electrification, and increasing demand for reliability are placing greater pressure on the grid. At the same time, national decarbonization ambitions are accelerating, with renewables expected to play a role in the country’s future energy mix.

Like its neighbors across Southeast Asia, Malaysia’s energy systems will need to transform to ensure that rising demand is met reliably and affordably, while also advancing its long-term sustainability goals of reaching net-zero by 2050. This means the energy system will need to evolve on these three fronts at the same time, where the country will need to consider how it will continue to power economic progress, find a balance between modernizing existing infrastructure and integrating more renewable energy into the grid, and do so in a way that remains cost-efficient for consumers and businesses.

How is the government dealing with this and how is ABB working with the government or the private sector to deal with the energy problem?

Malaysia has set out clear direction for its energy future through initiatives such as the National Energy Transition Roadmap (NETR) and the Energy Efficiency and Conservation Act (EECA). These provide a strong foundation for scaling renewable energy, modernizing the grid, and encouraging greater efficiency across industries. They also give the private sector confidence to invest, which is crucial as new infrastructure and technologies come online. The focus now is on turning this strategic ambition into sustained, on-the-ground progress.

In 2023, ABB joined other key industry stakeholders in signing a Memorandum of Understanding (MoU) with the Malaysian Green Technology and Climate Change Corporation (MGTC) to initiate the National Energy Efficiency Collaboration (NEEC). This initiative is in alignment with Malaysia’s energy transition goals under both NETR and the National Energy Policy 2022–2040 by promoting stronger efficiency standards, faster retrofitting of public assets, and deeper collaboration between regulators, utilities, and energy-intensive industries. This year’s NEEC discussions focused on AI’s role in accelerating energy efficiency progress across industries. This will be enabled as more organizations adopt automation, AI, and intelligent cooling systems to deliver emissions reductions alongside productivity gains.

What new technologies and energy can organizations look to have better energy management and usage?

As Malaysia’s energy transition progresses, automation, digitalization and AI are becoming essential enablers of smarter, more efficient energy use. These technologies improve visibility across operations, reduce waste, and enhance reliability by allowing systems to respond to changes in demand or grid conditions in real time.

In fact, Malaysian organizations clearly recognize the impact that technology can deliver. ABB Energy Industries’ Asia Pacific Energy Transition Readiness Index 2025 shows that digitalization is the number one investment priority for Malaysian businesses (42%), followed by automation (33%) and electrification (26%). This reflects strong confidence in the role of advanced technologies to modernize existing systems for greater efficiency, sustainability, and resilience.

Among the tech-enabled solutions, predictive analytics and real-time monitoring solutions are seeing strong adoption, with widespread scaling that reflects their proven value in optimizing performance and reducing downtime. In Malaysia, 33.5% of organizations report predictive analytics and maintenance are either fully optimized or embedded in daily operations, with a further 27% currently scaling up these capabilities. Similarly, 32% have real-time monitoring either fully optimized or in daily use, while another 27% are in the process of scaling up.

Digital control systems, grid automation, and energy management solutions are already helping operators optimize performance and reduce losses. These technologies are essential to support the integration of renewables and distributed energy resources. In addition , ABB’s extended domain expertise will accelerate the adoption of these solutions, guiding projects from pilot stage to full-scale implementation, and translating innovation into measurable outcomes.

Alongside this, organizations are also focusing on cleaner energy sources to reduce carbon intensity while ensuring a steady energy supply. According to the same survey, 78 percent anticipate increasing renewable energy consumption by over 20 percent in the next five years, signalling a clear willingness to shift toward a low-carbon energy mix.

Solar is already leading the way, with 70 percent of organizations having adopted it as part of their energy strategy. Beyond solar, hydropower (54%), green hydrogen (45%) and wind (44%) are gaining strong traction as emerging solutions that support Malaysia’s broader diversification goals.

This balanced approach of optimizing the efficiency of existing assets while expanding access to renewables will be crucial to strengthening energy security and accelerating decarbonization. In doing so, organizations will not only drive sustainability but also unlock new value, create resilient supply chains, and reinforce competitiveness in Malaysia’s evolving economy.

Given the increased demand and investments in AI infrastructure, how can Malaysia cope with the energy demand?

Malaysia is fast becoming a regional hub for technological development and with that comes the rise in data centers, driven by increased demand for cloud infrastructure, growing AI workloads, and digital services. Naturally, this growth significantly increases electricity consumption and requires the right strategies to ensure the national grid can continue to operate reliably and efficiently.

To remain sustainable, this growing energy demand must be supported with a shift towards more energy-efficient operations and low-carbon power. These include grid digitalization through automation and AI to monitor and manage demand in real time, hybrid energy systems that combine renewables with storage and backup capacity to maintain stability, integrated energy management that optimizes industrial loads alongside renewable inputs, and resilience-led infrastructure design incorporating redundancy, demand-side management and direct renewable procurement.

ABB supports the growing demand for AI in Malaysia by working alongside the industrial ecosystem with digitalization, automation, and end-to-end electrification solutions, strengthening resilience, energy efficiency, and sustainability. Through intelligent power management and real-time monitoring, we can enable Malaysia to optimize consumption and improve power usage, while ensuring uptime and reliability even under peak demand.

Scalable hybrid solutions, such as ABB Ability Energy Management and Optimization OPTIMAX, combine monitoring and reporting, predictive optimization and forecasting modules, and real-time control and optimization features. This enables organizations to manage energy demand more intelligently by having coordinated control across multiple energy assets, ultimately improving energy efficiency and decarbonization.

What's your predictions for the future of energy usage, not only in Malaysia but also the ASEAN region?

ASEAN economies, including Malaysia, are on a growth trajectory, driven by manufacturing, advanced technologies, data-led services, and stronger foreign investment. This will lead to rising energy demand, which is an opportunity to modernize energy systems and consider emerging energy sources to supplement growing demand. According to the research, 63% surveyed have a sustainability plan or an energy management and transition plan in place, with more than half reporting high alignment among global, regional and local teams.

In addition, we are seeing governments and businesses accelerating investments in renewable energy, grid upgrades, and digital technologies that make energy systems more efficient, flexible, and interconnected. The Asia Pacific Energy Transition Readiness Index 2025 survey shows that 71 percent of organizations are already committing more than 10 percent of CAPEX towards energy transition initiatives, a sign that sustainability is now seen as a key driver of competitiveness, not just compliance.

Looking ahead, three shifts are set to define Malaysia’s and the broader ASEAN energy landscape:

As these converge, the region will likely move toward a cleaner, more innovative energy system that enables sustainable growth while supporting the rapidly expanding digital economy. In Malaysia for instance, progress in adopting digital technologies and integrating renewables is promising; 78% of organizations anticipate increasing renewable energy consumption by over 20% in the next 5 years. This shows the optimism and eagerness leaders have in shifting towards cleaner, more resilient power to meet clean energy targets.