IOI plans 500 MWac solar and 1 GWh battery project in Bahau with TNB

IOI Corporation Berhad plans to develop a 500 MWac solar project with a 250 MW/1,000 MWh battery energy storage system on about 1,300 acres in Bahau, Negeri Sembilan, pv magazine reported on 4 November 2026. The palm oil producer is developing the project with Tenaga Nasional Berhad, Malaysia's largest electricity utility, and a consortium of unspecified small and medium-sized enterprises.

The project is IOI's first large-scale renewable energy investment under Malaysia's Corporate Renewable Energy Supply Scheme, or CRESS, IOI said. CRESS lets corporate electricity consumers buy renewable power directly from independent developers through the national grid. pv magazine reported that the scheme is intended to encourage private investment in renewable energy infrastructure and to support decarbonization of energy-intensive industries.

DayOne offtake

The project will be supported by TNB's long-term renewable energy offtake agreement with DayOne Data Centres Limited, a global digital infrastructure platform headquartered in Singapore, IOI said. DayOne is expected to procure up to 500 MWac of renewable energy over 21 years to support its data centre operations in Malaysia. The parties announced the agreement on 11 June 2025.

CRESS revision

Malaysia revised the CRESS framework in September 2026 to improve project bankability and stimulate investment, pv magazine reported. The changes set a fixed system access charge of MYR 0.14 ($0.03) per kWh for qualifying firm renewable electricity supply projects and a minimum 10-year contract term between developers and corporate consumers. Projects must begin commercial operations by the end of 2028 to qualify for the reduced charge.

At the time, pv magazine reported, 11 renewable energy developers and eight corporate consumers had registered projects totaling about 3.15 GW under the scheme. The Bahau project's 500 MWac capacity is equivalent to about 16% of that total. Its 21-year DayOne offtake also exceeds the new 10-year minimum contract term.

Market context

Malaysia is expanding utility-scale solar and energy storage capacity to meet rising electricity demand from data centres. pv magazine reported that in August 2025 clean energy company Gentari and engineering group Gamuda unveiled plans to jointly develop 1.5 GW of solar capacity, alongside battery storage, to supply hyperscale data centres under CRESS.

The rapid growth of Malaysia's data centre industry has raised concerns about electricity supply, grid capacity and water availability. pv magazine reported, citing a March 2026 analysis, that meeting rising electricity demand while maintaining grid stability and ensuring sufficient dispatchable generation is a challenge. The report also said uncertainty over grid access charges has been identified as a key factor affecting the commercial viability of corporate renewable energy projects.

What it means

For IOI and TNB, the Bahau project combines a large solar plant, battery storage and a long-term data centre offtake. For Malaysia, it tests whether CRESS can convert registered capacity into operating renewable generation for energy-intensive data centre demand. The scheme's success will depend on projects such as this one reaching commercial operation, not just registering capacity.