Google signs solar PPA with Shizen Energy to power Malaysia data centers carbon-free

AI is driving rapid growth in the semiconductor market and impacting the industry’s sustainability progress. (Image: Pixabay)

Japanese renewable energy developer Shizen Energy announced on Dec. 15 that it has signed a power purchase agreement (PPA) with U.S. technology giant Google to develop a 29.9 MW solar photovoltaic project in Malaysia. The project marks Shizen Energy’s first utility-scale solar development in the country, paving the way for a broader expansion of its renewable energy footprint across Southeast Asia.

The rapid growth of artificial intelligence (AI) data centers is accelerating Malaysia’s semiconductor industry into a new phase of expansion. Experts note that reducing Scope 2 emissions from purchased electricity is becoming a top priority for corporates, particularly in markets where national grids remain heavily reliant on fossil fuels. 

In such environments, lowering energy consumption from cooling systems and water infrastructure, as well as reducing grid emission factors, are seen as the most effective pathways to industrial decarbonization.

Google expands clean power supply through solar PPA with Shizen Energy

According to Shizen Energy, the two companies are deepening their partnership under Malaysia’s Corporate Green Power Programme (CGPP). The solar project will support Google’s goal of achieving carbon-free operations by supplying real-time, hour-by-hour clean electricity to meet the growing power demand of its data centers.

Kenji Kawado, CEO of Shizen International, said the company’s entry into Malaysia’s utility-scale solar market represents a key milestone in its regional strategy, with the potential to significantly scale up renewable capacity across Southeast Asia.

Demand for low-carbon energy from the technology sector continues to rise. Microsoft Vice President of Energy Bobby Hollis recently told The Business Times that Singapore, Kuala Lumpur, Johor Bahru, and Jakarta are critical hubs for the company’s data center expansion. Microsoft is actively exploring cross-border energy solutions to rapidly address clean power gaps across different markets.

Driven by data center demand, Malaysia’s semiconductor industry is also setting ambitious targets. The government aims to increase semiconductor exports to 1.2 trillion ringgit (about USD 293.9 billion) by 2030, doubling the country’s global market share from 7% to 14%.

The International Energy Agency (IEA) estimates that global semiconductor electricity consumption reached 149 TWh in 2021, nearly equivalent to Malaysia’s total annual power usage. In 2023, emissions from purchased electricity accounted for around 77% of the industry’s total greenhouse gas emissions, equivalent to approximately 37 million tonnes of CO₂e.

Solar and other renewables are emerging as key low-carbon power sources for AI data centers. (Photo: iStock)

Major chipmakers see 8% to 9% surge in power use in five years

Yub Shin, Partner at Belgium-based consulting firm Arthur D. Little, said global semiconductor growth is being driven primarily by AI, cloud computing, and the Internet of Things, with sustainability considerations increasingly embedded in chip manufacturing processes, technology development, and fab location decisions.

He noted that the power consumption of major chipmakers—including Samsung Electronics, SK Hynix, Micron, TSMC, and Intel—has risen by 8% to 9% in five years. TSMC alone is projected to account for one-quarter of Taiwan’s total electricity consumption by 2030.

According to Yub Shin, reducing electricity consumption remains the most immediate and controllable lever to cut Scope 2 emissions, especially in markets like Malaysia, where fossil fuels dominate the power mix and clean energy procurement options remain limited. Another key lever is lowering the emission factor, or the amount of greenhouse gases emitted per unit of activity.

Energy use from water systems, an essential component of semiconductor manufacturing, is also significant. Yub Shin pointed out that water-related systems account for around 30% of a wafer fab’s total energy consumption, with pumps alone representing roughly 15%. Improving water efficiency and reducing its associated power demand could therefore deliver meaningful emissions reductions.

Source: Shizen Energy, Eco-business