Data centres push electricity demand to new high
The country recorded a peak power demand of 21,049 megawatts (MW) on May 28, 2025, a 10.4 per cent increase from a year earlier.
HLIB attributed the jump to organic growth and higher load requirements, particularly from data centres, where utilisation reached 485MW in March compared with 148MW a year ago.
"In response to the sharp rise in demand, the Energy Commission has called for tenders for new and existing gas-fired power capacities, scheduled for rollout between 2025 and 2029 to ensure a healthy reserve margin," it said in a note.
At the same time, HLIB said renewable energy (RE) deployment remains a key policy focus, with national targets set at 31 per cent RE capacity by 2025 and 40 per cent by 2035.
"Amid this backdrop of rising demand and a strong pipeline of new power supply, we see a compelling multi-year investment opportunity in the domestic power infrastructure space," it said.
Over the current Regulatory Period 4 (RP4), HLIB estimates Tenaga Nasional Bhd will channel RM3 billion to RM3.5 billion annually from its base capital expenditure into grid infrastructure.
It said this is expected to generate RM6.7 billion to RM7.8 billion worth of job opportunities in the transmission substation segment, benefiting mechanical and electrical (M&E) engineering players.
"Looking ahead, Tenaga's RM90 billion grid investment plan implies another RM47 billion could be deployed under RP5 (2028-2030), exceeding RP4's RM42.8 billion and this points toward sustained momentum in power infrastructure rollout.
"We reckon listed power infrastructure players who have access to capital and economies of scale are prime beneficiaries," it said.
Overall, given the robust project pipeline and rising infrastructure requirements, HLIB believes the sector has not yet reached its cyclical peak.
"As such, we are Overweight on the power infrastructure sector. Our top picks are MN Holdings Bhd and Southern Cable Group Bhd, both key beneficiaries of grid expansion.
"We also favour SMRT Holdings Bhd for its strategic involvement in the digitalisation of Malaysia's distribution substation," it added.
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