DayOne and TNB Sign MOU to Explore Up to 1.5GW of On-Site Power for New Selangor Campus

DayOne Data Centers and TNB Power Generation (TNB GenCo), the generation subsidiary of Malaysian utility Tenaga Nasional Berhad, signed a memorandum of understanding on August 7, 2026 to explore up to 1.5 gigawatts of dedicated on-site power generation for DayOne’s planned data center in Sepang, Selangor, in the Greater Kuala Lumpur region. The companies announced the deal on September 1, 2026; both sides describe the figure as an exploratory ceiling, not a committed allocation.

What is known

The MOU was signed in Kuala Lumpur by DayOne Malaysia general manager Jimmy Yan and TNB GenCo managing director Dato’ Shahrir Abdul Latiff, witnessed by DayOne CEO Jamie Khoo and TNB president and CEO Datuk Ir. Ts. Shamsul Ahmad, according to the companies’ joint press release carried by PR Newswire. The release says the two sides will assess a dedicated generation solution that could incorporate battery energy storage, with final capacity, configuration and implementation model contingent on feasibility studies, definitive agreements and regulatory approval — standard hedging language for an MOU at this stage, and DataCenterDynamics’ and Technode Global’s independent write-ups of the same announcement carry no additional capacity figure beyond that ceiling.

The Selangor site in question is almost certainly the 78.8 acres in Sepang that a DayOne subsidiary, WG Malaysia X, agreed to buy from developer Mah Sing for RM617.9 million ($152.8 million), disclosed in a Bursa Malaysia filing on August 20, 2026 and covered on Coloprice at the time. That deal was a land purchase only, with Mah Sing describing any operating partnership as preliminary and no power figure attached. The TNB MOU — signed before the land deal was even disclosed, but announced afterward — is the first concrete signal of how DayOne intends to power the site.

The release also states DayOne’s cumulative Malaysian investment is projected to exceed RM28 billion by the end of 2026, spanning its existing Nusajaya Tech Park (opened 2023) and Kempas Tech Park (2025) campuses in Johor plus the new Selangor push. TNB already supplies DayOne’s Johor campuses through Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS) and Green Electricity Tariff programs, so this MOU extends an existing utility relationship rather than starting a new one.

What this means for buyers of power

An on-site generation solution of this scale — if it materializes anywhere near 1.5GW — would put DayOne’s Selangor site in a different power category than most Malaysian colocation. Coloprice’s Colocation Price Index tracks Malaysia’s commercial grid tariff at roughly $0.135/kWh, about half Singapore’s $0.262/kWh, which is the core reason Johor and now Selangor keep attracting hyperscale capacity in the first place. On-site generation paired with storage would let a tenant bypass grid queueing entirely, which is increasingly the binding constraint in Malaysia — not the tariff. It also reinforces Greater Kuala Lumpur, alongside Johor, as a second Malaysian node competing directly with Thailand and Vietnam for the AI capacity that Malaysia’s 2026 restriction on non-AI approvals pushed elsewhere in the region.

For buyers evaluating Southeast Asian sites on Coloprice’s energy tariff comparison, the relevant signal isn’t the headline 1.5GW — it’s that a major operator is now treating dedicated generation as a prerequisite for a greenfield Malaysian campus, rather than assuming grid connection will keep pace with AI-scale demand. That mirrors what Coloprice has tracked in Johor, where energisation timelines, not construction, have been the more common source of slippage.

What we don’t know

DayOne and TNB have not disclosed a generation mix (gas, solar, or a hybrid with the mentioned battery storage), a target energisation date, or how the 1.5GW ceiling maps to disclosed and undisclosed phases of the Sepang site. No building count, IT capacity figure, or construction timeline has been published for the Selangor campus itself — as of this MOU, it remains a power-planning exercise layered on top of an already-preliminary land deal.