Johor and Singapore: the plug, not the chip, decides who gets to build
On their utility’s count, Malaysia’s data centres have booked more than four times the grid power they actually draw. Across the causeway, Singapore received more than 20 bids for its latest batch of data centre capacity and provisionally chose four.
One side has power booked and sitting idle. The other turns builders away. They look like opposite problems.
They are the same one. In Johor and Singapore, a connection to the grid, not a supply of chips, decides who gets to build. Singapore rations it. Johor hands it out years before the halls fill, so booked power is a poor guide to computing at work.
Explain it like I don't work in finance
Two blocks of flats face each other. The old block has no spare sockets, so the landlord gives the few he has to tenants with efficient fridges.
In the new block, every flat is wired before anyone moves in, and lights come on only as furniture arrives. Counting sockets tells you who may move in. Counting lit windows tells you who has.
A data centre needs more than electricity made somewhere. It needs a connection: a substation, where high voltage power is stepped down, a transformer feeding it, and a signed place in the utility’s plans.
Every new campus passes three clocks. The first is permission: studies, approvals and a supply contract. The second is plant, the heavy gear built to order in factories that already have years of orders waiting. The third is filling the hall, which runs on the tenant’s chips and, for a tenant based in China, an American export licence.
Only the first clock answers to a government, and Malaysia squeezed it hard. Its utility, Tenaga Nasional, cut the time to connect a data centre from up to four years to one. Campuses connected quickly, and their bookings ran far ahead of use. In June 2026 the data centres in Tenaga’s system had booked 5.65 gigawatts and drew 1.26, a little over a fifth.
Singapore cannot do that. It is short of land and of green power, so it hands out capacity in small batches to operators that pass strict efficiency and clean energy tests. A new law, expected in force in 2027, will license the megawatts of every large hall, old ones included.
American AI labs have found a way round their own grid queues: they build gas power on site. Singapore allows that too, but it buys nothing, because what Singapore rations is the computing load a hall may run, not the electricity. Malaysia gives data centres grid power only from Tenaga’s spare margin, and beyond that lets them build their own only with a permit.
So chips decide how fast a finished Johor hall fills. Whether a hall may be built at all is settled at the plug. A booked megawatt is a place in line, not a computer at work.
For investors
Only the first clock answers to a government
The three clocks run in order, and each answers to a different master. Permission answers to the utility and the government, so policy can shorten it by decision. Plant answers to the makers’ factories, and fill answers to tenants, chip supply and American export licences, which neither Malaysia nor Singapore controls.
Only the first of the three clocks answers to a government
What every new campus in Johor or Singapore passes, in order, and who sets each pace
Malaysia showed how far the first clock can move. Tenaga launched its Green Lane Pathway on 8 August 2023 for data centres taking supply at 132 or 275 kilovolts. It promised connection “three times faster than the normal delivery time”, cutting the implementation period from 36 to 48 months to 12.
The plant clock does bind in the order books of makers such as Hitachi Energy and Siemens Energy, whose factories also serve Johor. But Tenaga’s cut covered the whole period, plant included. Malaysia has shown the queue can be shortened. It has not yet had to show the factories can keep up.
Johor connected faster than its halls could fill
Tenaga publishes the clearest measure of the gap every quarter: the share of booked power that data centres actually draw. In the year to June 2026, the load drawn by Malaysia’s data centres roughly doubled, to 1,256 megawatts. Their booked maximum demand, the most a site may draw at once, grew by about 60%. The share drawn crept up from about 17% to about 22%.
Malaysia's halls draw more each quarter, and still under a quarter of what they booked
Data centre load drawn against maximum demand booked by projects in Tenaga's system, Malaysia, gigawatts
The pipeline behind those bookings is larger still. Beyond the projects already in Tenaga’s system sat 2.21 gigawatts under construction and 0.49 gigawatts signed. Johor holds two thirds of Malaysia’s secured data centre capacity, though Tenaga publishes no Johor-only draw.
Part of the gap is ordinary, because a campus books for its finished size and fills in phases. Part is overbooking: ministers told Parliament in October 2026 that data centres book more than they use. Nothing primary splits the gap between ramp, overbooking and chips.
A Johor hall can be let and earning while it draws little
A Johor operator is paid for the plug, not for the power, which is why bookings can run so far ahead. DayOne, one of Johor’s largest operators, says in its US listing filing of 5 October 2026 that it provides “space, power and cooling” for customers’ IT equipment. Its long take-or-pay contracts pay for capacity, while power is passed through at what customers actually consume. So a hall can be energised, let and earning its capacity fees while drawing little.
What fills the hall is the tenant’s business. DayOne’s largest customer, a global technology company with a leading short-form video platform, provided 69.2% of its revenue in the first half of 2026. SemiAnalysis names that customer as ByteDance, and DayOne warns that restrictions on it could cut future demand.
That is where the chip clock bites. The US Bureau of Industry and Security confirmed on 31 May 2026 that advanced computing items need a licence for any entity headquartered in China, or whose ultimate parent is, wherever the entity sits. The licence follows the tenant’s headquarters, not the hall’s address. Once a Johor campus is plugged in, its tenants’ chips set much of the pace.
Idle wires have a price, and Malaysia is deciding who pays
When campuses book far more than they draw, someone pays for wires that sit idle. Tenaga’s terms put part of that on the campus. A new high voltage customer drawing well below the demand it declared pays a charge on the shortfall in its first four years, and its own connection is costed against the tariff margin it is expected to bring.
The shared network behind the campus stays in the regulated tariff that every customer pays. That includes up to RM16.27 billion of contingent spending for 2025 to 2027, “activated upon trigger events”. One listed trigger is new data centre demand with signed supply agreements.
The split may change. The regulator will study a user-pays basis for the next tariff period, 2028 to 2032, the energy minister told Parliament in October 2026, naming data centres.
Singapore rations what Malaysia builds
Singapore is the mirror image: it has demand to spare but little land or green power, so it chooses who may plug in. Its second Data Centre Call for Application, opened on 1 December 2025, offered at least 200 megawatts. Bidders needed a PUE of 1.25 or better, the ratio of power entering a building to power reaching its computers, and at least half their power green.
On 21 August 2026, EDB and IMDA provisionally allocated 50 megawatts each to Digital Realty, Equinix, Keppel Data Centres and STT GDC, all on Jurong Island, from more than 20 proposals. Singapore already has more than 1.6 gigawatts of data centre capacity, and the ministry sets no fixed ceiling, only growth “within the envelope of our resource constraints”.
Green power is the tighter limit, and the cable that could ease it cannot come in time. Singapore aims to import about 6 gigawatts of low-carbon power by 2035, and every one of its 13 import projects is still conditional. Each needs subsea cable and converter stations built to order, on the slow plant clock. The data centre call did not wait for them: its green pathways named clean fuels and building solar and did not mention imports. That reading is mine.
The ration now reaches the halls already running
Singapore is about to turn every large hall’s megawatts into a licensed quantity. The Digital Infrastructure Bill, debated on 6 and 7 October 2026, requires a licence for any hall with 3 megawatts or more of critical IT load, the power its servers may draw, own-use halls included. Each licence states that load, and the regulator can enforce by a fine or by cutting it.
About 70 data centres are in scope, Senior Minister of State Tan Kiat How said on 7 October. The minimum efficiency and its date await IMDA’s regulations, to be paced with “investment and depreciation cycles”, and the Act is expected in force in 2027. For an investor the lever is plain: once the Act is in force, the regulator can cut a hall’s megawatts.
Building your own power gets round a queue, not a ration
America’s AI labs escape their grid queues by building gas power on site, and in Singapore that is legal. Under the Energy Market Authority’s guide to embedded generation, power made on site mainly for the owner’s use, a unit of 1 megawatt to under 10 needs a Wholesaler (Generation) Licence. One of 10 megawatts or more needs a Generation Licence, and its station is dispatched by the grid operator. New fossil units holding generation licences must be at least 30% hydrogen-ready, or burn low-carbon fuels from the start.
Fuel is not the cap either. The Energy Market Authority will lift Singapore’s LNG regasification capacity from 10 to 15 million tonnes a year by 2030. By my arithmetic, a 100 megawatt campus running all year on its own plant would burn 1 to 2% of today’s capacity.
One campus burning its own gas would use 1 to 2% of Singapore's LNG terminal
Liquefied natural gas, million tonnes a year
The gas risk belongs to the system, not the campus. Pipelines carry about half of Singapore’s gas for power. On 26 October 2026 Indonesia said it had cut about 8% of the gas it pipes to its neighbours, citing well maintenance and its own users first.
What a campus cannot build for itself is permission. Under the Bill, a hall’s licence will state the critical IT load it may run, and new capacity comes only through a call. A turbine in the yard adds megawatts of electricity, not one megawatt of licensed computing.
Malaysia narrows the route from the other side. On 28 October 2026 its Deputy Prime Minister told Parliament that data centres are encouraged to generate their own power through solar for their own use, exporting nothing to the grid, and that the Energy Commission is still drafting the framework. The grid’s own gas is spoken for: Tenaga is retiring 6.6 gigawatts of its own plant by 2030, and new gas plants, tendered as NEWGEN26, are due from 2029 to 2031.
Later that day, the investment minister said the grid now answers first. A data centre gets grid power only if Tenaga’s reserve margin has room to spare after other industry. If not, it must build its own power off the grid, approved by the energy ministry through its regulator. Of the 117 data centres Malaysia has approved, 27 will take their power that way. Asked about a moratorium, he said there is no plan for one “at this moment”: “our moratorium is the way we process”. Meanwhile 24 new applications wait for an answer until the 117 settle.
So the American escape travels only halfway. In Singapore, own power does not get round a licensed megawatt. In Malaysia, it is the route left once Tenaga’s spare margin runs out, and the permit still decides.
What could loosen the plug’s hold
The strongest case against comes from Malaysia’s own Parliament. On 28 October 2026 the Deputy Prime Minister said data centres had contracted 2,346 megawatts by August 2026 and used about 1,374, or 58.5%. Read alone, that looks like halls filling nearly as fast as they connect.
Counted against what they contracted, halls use more than half; against what they booked, under a quarter
Data centre load drawn as a share of three different bookings, Malaysia
It is the same draw counted against a smaller booking. Against the 6 gigawatts booked at 45 operating sites, which ministers gave on 13 October, the same draw is about 23%. Against the maximum demand in Tenaga’s system, which my test reads, it was about 22% in June. Every count still leaves a large share of booked power idle.
The concession is real, though. Once a Johor campus is connected, its tenants’ chips and licences set how fast it fills, so the plug binds in Singapore and for campuses still waiting, not for halls already plugged in. Malaysia’s grid spending is also less about data centres than it looks: only 13% of its base allowance for 2025 to 2027 is labelled demand growth. And Singapore can make more power, with five new gas power stations by 2031, yet it still rations data centres by call.
Water is not the hidden gate. Johor’s reserve margin of treatment capacity, 14.3% in 2025, sits inside the regulator’s target band of 10 to 15%.
The scarcity stays on the plug. Malaysia’s idle bookings and Singapore’s turned-away bidders were never opposite problems. In the old block there are no spare sockets, so the landlord chooses his tenants. In the new block every flat was wired before anyone moved in, and the lights come on as the furniture arrives. In both, the socket decided who got a flat.
Malaysia has more power booked and idle than Singapore has data centres
Put both sides of the causeway on one scale and the two problems become one picture. In June 2026 Malaysia’s data centres had booked 5.65 gigawatts and drew 1.26, leaving about 4.4 gigawatts booked and unused. Singapore’s whole fleet is more than 1.6 gigawatts, and its latest call handed out 200 megawatts.
Malaysia's idle bookings are about 22 times Singapore's latest call
Data centre power in gigawatts: Singapore's capacity against Malaysia's bookings and draw
So the power Singapore hands out in batches sits booked and idle next door, about 22 times its latest call. It cannot cross. A booked megawatt belongs to its site and its supply agreement, and only a tenant with chips lights it. At DayOne, one of Johor’s largest operators, the biggest customer is the one SemiAnalysis names as ByteDance. The licence for that tenant’s chips follows its headquarters, so part of Johor’s idle power waits on Washington, not on Tenaga.
That shapes who pays for the wait. The operator collects its capacity fees on take-or-pay contracts, whether the hall draws much or little. The campus pays a shortfall charge in its first four years only. The shared network behind it sits in the tariff every Malaysian customer pays, unless the regulator’s study of a user-pays basis changes that for 2028 to 2032. PJM’s households carry a similar bill in America rations the plug.
The picture holds for as long as bookings outrun the draw. Tenaga’s briefing for June 2027, due around August 2027, gives the share my test reads; Singapore reviews its next call 18 to 24 months from August 2026; and IMDA’s first efficiency rules will show how hard the ration reaches the old halls. Contracted, energised, running follows the same gap between a lit hall and a working one, and Hong Kong is the mirror: there the chip licence turns on the hall’s address as much as on the tenant’s.
A causeway apart, Singapore hands out power 50 MW at a time, while Malaysia sits on about 22 times Singapore’s latest call, booked and unused.
What would prove me wrong
The first limb is Tenaga’s briefing for June 2027. If Malaysia’s data centres then draw 40% or more of the maximum demand in its system, halls are filling about as fast as they connect. The test reads Tenaga’s “in system” series, not the minister’s 58.5%, which uses another denominator. If load doubles again to about 2.5 gigawatts while most of the 2.21 gigawatts under construction enters the system, the share is roughly a third. Under 40% would not by itself show chips are the cause; ramp and overbooking fit it too.
The second limb is Singapore. If it allocates new data centre capacity before 2028 outside a call with efficiency and green power conditions, it is no longer rationing the plug.
Research notes
No initiation note rests on these claims yet. The plant clock in this piece is the subject of the notes on Hitachi and Siemens Energy, which rest on their own claims. Whether any of this is already in share prices is a question for these notes, not for the journal.
The claims on record, word for word
The test this piece stands behind, quoted word for word from the claims page:
Johor and Singapore, the plug, not the chip (30 October 2026)
Claim: “In Johor and Singapore the grid connection, not the chip, decides who gets to build: Malaysia’s data centres, two thirds of whose secured capacity is in Johor, will draw less than 40% of the maximum demand of the data centre projects in Tenaga’s system at June 2027, and Singapore will add data centre capacity only through calls for applications with efficiency and green energy conditions.”
Breaks if: “Tenaga’s figures for June 2027 show Malaysia’s data centre load at 40% or more of the maximum demand of the data centre projects in its system, or, before 1 January 2028, Singapore allocates capacity to a new data centre, or new capacity to an existing one, other than through a call for applications carrying efficiency and green energy conditions. Capacity regained by redeveloping or replacing an existing hall within its current allocation, and capacity allocated before 30 October 2026, do not count.”
Three earlier claims on this market:
The queue, not the chip, is what’s holding AI back (27 July 2026)
Claim: “In Johor and Singapore, a finished grid connection, not chip supply, is the scarce thing holding the AI buildout back.”
Breaks if: “Connection waits keep shrinking the way Malaysia’s Green Lane cut them from 36 months to 12, or transformer and cable lead times normalise faster than utilities commit capital.”
Where later evidence bears on it: Malaysia’s connected data centres, two thirds of whose secured capacity is in Johor, draw less than a quarter of what they booked. The claim holds for Singapore and for campuses still waiting to connect, not for those already connected. I found no published cut below 12 months.
The one part of the grid that money cannot hurry (22 September 2026)
Claim: “A grid connection queue is really two queues. Governments can shorten the paperwork one, but the equipment one sets the pace.”
Breaks if: “Connection timelines keep compressing across the board, or equipment lead times normalise faster than utility spending is committed. Also if building power on site removes the constraint rather than moving it.”
Where later evidence bears on it: against the equipment limb so far. Tenaga’s 2023 release says the Green Lane cut the whole implementation period, plant included, so the equipment clock has not been shown to set the pace of Malaysia’s own connections. No Singapore campus has yet used on-site power to get round the ration.
Two governments did the opposite thing and confessed the same problem (22 September 2026)
Claim: “Malaysia building more grid and Singapore rationing who may connect are opposite answers to the same shortage of connection capacity.”
Breaks if: “Malaysia’s spending turns out to be ordinary renewal weighted towards generation rather than connection, or Singapore’s efficiency ceiling moves on a fixed schedule rather than with scarcity, or a third constrained market does neither.”
Where later evidence bears on it: the allowance is grid, not generation, but only 13% of it is labelled demand growth, and most of the rest is closer to renewal, with data centre spending in a contingent allowance released on triggers. That weakens the Malaysian half. Singapore is building five gas power stations by 2031, but still rations data centres.
The figures behind the charts
Tenaga publishes the fill quarterly. Every draw figure is Malaysia-wide; Tenaga publishes no Johor-only draw. The December 2025 row counts capacity “in operation”, not “in system”, so it is not strictly comparable.
| As at | Load drawn | Booked maximum demand | Share drawn | Source |
|---|---|---|---|---|
| June 2025 | 603 MW | 3.5 GW in system, 24 projects | about 17% | Tenaga briefing, 2QFY2025 |
| September 2025 | 710 MW | not given | Tenaga briefing, 28 August 2026 | |
| December 2025 | 850 MW | about 4.5 GW in operation | about 19% | Tenaga briefing, 4QFY2025 |
| March 2026 | 1,054 MW | about 4.5 GW in system | about 23% | Tenaga briefing, 1QFY2026 |
| June 2026 | 1,256 MW | 5.65 GW in system, 42 projects | about 22% | Tenaga briefing, 28 August 2026 |
| August 2026 | about 1.37 GW | 6 GW at 45 operating sites; 8.771 GW signed by 62 projects | about 23% | Dewan Rakyat Hansard, 13 October 2026 |
| August 2026 | about 1,374 MW | 2,346 MW contracted | 58.5% | Dewan Rakyat Hansard, 28 October 2026 |
At June 2026, 2.21 GW was under construction and 0.49 GW signed, 8.35 GW across 61 projects in all. The 13 October Hansard share, 1.37 GW of 6 GW, is my arithmetic; the 58.5% is the minister’s.
The three clocks, with the evidence for each:
| Clock | What it is | Who sets the pace | Evidence, dated |
|---|---|---|---|
| Permission and position | Studies, approvals, the supply agreement, who pays | The utility and the government | Tenaga’s Green Lane Pathway (9 August 2023) |
| Plant | Transformers, switchgear, subsea cable, converter stations | The makers’ factories | Hitachi Energy’s unfilled orders, about three years of sales (June 2026); Siemens Energy’s transformer demand above capacity to fiscal 2030 (20 November 2025) |
| Fill | Tenants’ chips bought, shipped, racked and tested | Tenants, chip supply, US export licences | Tenaga’s quarterly series, above |
The licence rule: BIS guidance of 31 May 2026 covers any entity headquartered, or whose ultimate parent is headquartered, in Country Group D:5, which includes China, or in Macau, wherever the entity sits; operators need not stop ongoing use “until further notice”. Malaysia’s own permit of 14 July 2025 covers exports, transhipments and transits of US-origin AI chips, not chips running in Johor.
Who pays for the plug in Malaysia:
| Charge | Data centres against ordinary high voltage users | Source |
|---|---|---|
| Energy, per unit used | 55.18 and 51.09 sen per kWh, peak and off-peak, about a quarter higher | Energy Commission schedule, from 1 July 2025 |
| Capacity and network, per kW of maximum demand | RM21.76 and RM23.06 per kW, the same | Energy Commission schedule, from 1 July 2025 |
| Connected load charge | RM8.50 per kW of shortfall below 85% of phased declared demand, years one to four, for new medium and high voltage customers | Tenaga charges terms |
| The campus’s own connection | Project cost less 15 years of the customer’s own tariff margin at 7.3%, or a refundable 25% deposit forfeited below 75% of final demand within six years | Tenaga Connection Charge Book 2025 |
The higher energy rate is the ultra high voltage class, for data centres connected above 50 kilovolts (Dewan Negara, 8 December 2025). The contingent allowance is in Tenaga’s investor deck of October 2026. Of the RM26.55 billion base grid allowance for 2025 to 2027, RM3.49 billion, 13%, is labelled demand growth, data centres included; the rest is energy transition and security of supply. The user-pays study was announced in the Dewan Rakyat on 15 October 2026.
Johor’s water reserve margin, spare treatment capacity above demand in SPAN’s Water and Sewerage Fact Book 2025, jumps when a plant opens and is eaten back within a couple of years. SPAN’s target band is 10 to 15% (water ministry, November 2019).
| Year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Johor reserve margin | 14.3% | 11.5% | 16.8% | 15.7% | 14.3% |
Singapore’s Digital Infrastructure Bill, Bill No. 20 of 2026:
| Provision | What it does | Clause |
|---|---|---|
| Licence | Needed for any hall of 3 MW or more of critical IT load, own-use halls included | 2, 23 |
| Stated capacity | Each licence states the critical IT load the hall may run | 26(2) |
| Efficiency duty | Minimum efficiency “as may be prescribed”, measured by PUE | 35 |
| Enforcement | A fine, or a cut to licensed critical IT load | 39(2)(b), 40 |
The Bill holds no PUE level and no date. The minister’s closing speech refers to “the approved Act”. Singapore’s import goal is from EMA (30 May 2025); its 13 conditional projects, with developers’ dates from 2028 to 2035, are as at 7 August 2026. The five gas power stations by 2031 and the regasification expansion are from EMA’s five-year plan (26 October 2026).
Own power in Singapore: EMA’s Information Guide for Embedded Generation (February 2014) sets the licence tiers; the 30% hydrogen-ready rule is EMA’s emission standards determination (26 October 2023). The gas arithmetic is mine: 100 MW run all year at about 50% combined-cycle efficiency burns about 0.13 Mt of LNG, and at about 35% on simple-cycle turbines about 0.18 Mt, at about 50 GJ a tonne, against SLNG’s 10 Mtpa. SLNG says its terminal supplies about half of the gas for power. Indonesia’s energy ministry gave the cut as 31 of the 409.55 billion British thermal units a day it pipes to neighbours. Malaysia’s solar steer is from the Dewan Rakyat Hansard of 28 October 2026; Tenaga’s retirements and NEWGEN26 dates are from its briefing of 28 August 2026.
Who is exposed if the plug, not the chip, decides who builds in Johor and Singapore
This maps who operates in each layer. It is not a recommendation, and naming a company is not a view on its shares. Figures in the piece are disclosures used as evidence for the mechanism.
- The utilities
- Tenaga Nasional and SP Group run the Malaysian and Singapore grids.
- Campus operators
- DayOne, YTL Power, AirTrunk, Princeton Digital Group, Equinix, Digital Realty, Keppel Data Centres and STT GDC run data centres.
- Plant on the slow clock
- Hitachi Energy and Siemens Energy make transformers. Prysmian, Nexans and NKT make subsea cable.
- What fills the halls
- Nvidia makes AI chips.
- On the other side
- Anyone reading booked megawatts as computing at work, and campuses resting on one tenant's licence.
Sources: Tenaga's Green Lane release (9 August 2023), briefings to 28 August 2026, October 2026 deck, Connection Charge Book 2025 and charges terms; Energy Commission tariffs from 1 July 2025; Dewan Rakyat Hansard of 13, 15 and 28 October 2026, Dewan Negara Hansard of 8 December 2025 and a water ministry answer (12 November 2019); SPAN's Fact Book 2025; DayOne's Form F-1 (5 October 2026); US Commerce Department guidance (31 May 2026) and Malaysia's trade ministry (14 July 2025); EDB and IMDA fact sheets (1 December 2025, 21 August 2026); Energy Market Authority releases (5 September 2024, 30 May 2025, 7 August 2026, 26 October 2026), embedded generation guide (2014) and emission standards (26 October 2023); SLNG; Indonesia's energy ministry (26 October 2026); the Digital Infrastructure Bill and MDDI statements (3 March, 8 September, 6 and 7 October 2026); Hitachi (10 June 2026) and Siemens Energy (20 November 2025) disclosures. The power-gated and chip-gated framing, "the grid is sold out" (March 2024, repeated 30 December 2025), the on-site gas lead and the ByteDance identification are SemiAnalysis's, from its free articles of 13 March 2024, 30 June 2025, 30 December 2025 and 25 September 2026. Personal research, not investment advice.