Malaysia's gas plants are running harder, but who is ensuring they can keep pace?

The country is experiencing a data-centre boom that is creating unprecedented demand.

Malaysia's gas-fired power fleet is being asked to deliver two things simultaneously: replace coal as the grid's stabilising force, and power the fastest-growing data centre market in Southeast Asia.

Gas-fired power generation in Peninsular Malaysia rose 28.4% in December annually, as coal-fired output fell 4.3%, according to Malaysia's Grid System Operator.  This, of course, is led by the policy direction of the National Energy Transition Roadmap, which designates natural gas as the transition fuel for baseload power whilst the country phases coal out entirely by 2045.

At the same time, Malaysia is experiencing a data-centre boom that is creating unprecedented demand. Data centres are projected to account for 52% of Peninsular Malaysia's electricity use by 2035, up from roughly 2% as of mid-2025.  Meanwhile, Tenaga Nasional Berhad’s (TNB) own investor reporting shows data centre consumption already tripling its share of total grid demand in the first nine months of 2025, driving overall commercial electricity demand up 7.7% year-on-year.

This combined effect means that Malaysia's gas-fired generation fleet must carry considerably more than it was designed to. With new combined-cycle gas capacity only ready within four to five years, the existing fleet must shoulder the near-term load. TNB's CEO has indicated that the utility plans to add 6 to 8GW of gas-fired capacity by 2030 through new builds and life extensions of existing plants, but until that capacity arrives, the existing plants will be under strain.

The OEM gap
When coal carried a larger share of baseload generation, a gas plant failure was often a manageable and localised disruption. Today, with gas accounting for a significant portion of Malaysia’s power mix and playing an increasingly important role in balancing renewable energy generation and supporting growing demand from industries and data centres, an unplanned outage can have broad implications for grid stability.

Due to global disruptions and heightened demand, lead times for critical rotating equipment components have been extended significantly, in some cases to a year or more. Meanwhile, OEM service capacity is focused on new equipment production, leaving the in-service fleet with less support at a time when operators need faster turnaround. Whilst operators are aware of asset ageing, their responses are conservative, and this delivers slower and costlier outcomes.

The targeted engineering response
Whilst new capacity gradually comes online, the most immediate lever is extracting better performance from existing infrastructure.

Advanced diagnostics, instead of periodic maintenance, allows teams to detect mechanical decline before a fault becomes a forced outage. Precision interventions before failures occur can restore performance, extend asset life and reduce outage risk.

Interventions have already seen success in the region. For a case in Malaysia, an in-depth inspection on a gas turbine uncovered hidden cracking and fatigue damage that could have led to prolonged downtime. By combining advanced diagnostics with reverse engineering and targeted repairs, engineers restored the unit within three months, avoiding significant production losses.

Therefore, the difference between catching failure on a proactive basis and a quick response, is the difference between scheduled maintenance and an emergency.

Creeping degradation can also cause equipment to lose their original output. Efficiency retrofits can recover the capacity it was meant to produce. At a 400MW plant in Indonesia, a corroded cooling pump was replaced with a custom-engineered unit in under three months. Redesigned hydraulics and corrosion-resistant materials improved throughput, cut energy losses, and lowered lifecycle costs against full system replacement.

Even single-digit efficiency gains of this kind can compound across a fleet. Within Malaysia's gas-fired generation base, recovering modest availability improvements can translate into meaningful megawatt-hours that can relieve system pressure during peak demand periods.

For assets approaching key lifecycle milestones, a timely in-depth equipment assessment is often the most effective way to determine the right course of action to protect reliability, optimise investment, and identify opportunities for life extension. Rather than defaulting to replacement, operators can make informed decisions based on the asset’s actual condition and performance potential.

We worked on a major steam turbine restoration recently in Vietnam where the operator achieved cost savings of 45% against full replacement, and the unit was reset to a new lifetime of up to 20 years, returning to peak performance in a fraction of the new-build timeline. This demonstrates what is achievable when engineering precision is applied at the right point in the asset lifecycle.

Speed also matters much more today than, say, five years ago. When a gas plant is running at elevated levels to fill gaps between intermittent solar and meeting data centre demand, the tolerance for extended outages has effectively reached zero.

Reliability of ageing assets is an immediate lever
TNB is entering what it describes as a major infrastructure investment cycle, with regulated capital expenditure rising from RM20.6b ($6.4b) in the previous regulatory period to RM26.6b ($8.4b), plus a further RM16.3b ($5.2b) in pre-approved contingent capex for the 2025 to 2027 period alone. 

The focus has rightly been on expanding generation capacity and modernising transmission, but that investment only holds its value if the rotating equipment at the heart of the system is performing to meet today’s specifications at higher outputs.

Furthermore, cloud providers and hyperscale operators consider infrastructure reliability when deciding on the base of their data centres, whilst investors make choices by scrutinising uptime records. Regulators are also driving emissions and efficiency improvements, increasing demand for upgrades, and retrofit solutions that help operators improve performance, reduce emissions, and extend asset life.

Malaysia’s data centre ambitions hinge on uptime, so does coal transition. Both require reliability and the enhanced performance of existing power plants. New capacity may arrive eventually, but the assets carrying the load in the meantime cannot afford to fail.