Critical Mass: The Complexity of Malaysia’s Nuclear Reboot 

Nuclear power is back on the table for Malaysia. The imperatives are clear: the country must increasingly feed energy-intensive sectors such as data centres. In addition, Malaysia risks becoming a net gas importer within 10 to 20 years despite producing oil and gas (O&G).

But nuclear power’s revival is anything but straightforward. Malaysia is reopening its once-shelved nuclear file under much tighter political, environmental, and geoeconomic constraints than the public debate reflects.

In 2024, the Cabinet approved a 2035 nuclear power deployment target. In December 2025, the government amended the nuclear regulatory framework. It mandated permits for the import, export and transshipment of radioactive materials.

This is not Malaysia’s first nuclear rodeo. The country’s nuclear ambitions date back to the 1970s, initially focused on research and capacity-building (see Table 1). Subsequently, Malaysia prioritised natural gas via Petronas instead. Nuclear power was left on the backburner until the Najib administration.

By the 2010s, Malaysia was considered one of Southeast Asia’s most nuclear-ready economies. This followed the establishment of a Nuclear Power Development Steering Committee in 2008 and a 2014 Nuclear Roadmap under state-owned utility Tenaga Nasional Bhd (TNB), which would operate nuclear power plants. There were plans to have two operational nuclear power plants by 2021. But in 2018, then Prime Minister Mahathir Mohamad cancelled those plans due to a lack of capacity and expertise — particularly in the disposal of radioactive waste.

Malaysia’s Nuclear Energy Ambitions 

Table 1: Malaysia’s Nuclear Timeline 

Year	Event
1972	Establishment of the Tun Dr Ismail Nuclear Research Centre (PUSPATI).
1982	Malaysia’s first nuclear reactor (mainly for R&D) reaches criticality.
1984	Atomic Energy Licensing Act introduced.
2006	PUSPATI ultimately rebranded into Agensi Nuklear Malaysia for nuclear technology applications (e.g. medicine).
2008	Tenaga Nasional Berhad (TNB)’s first nuclear unit created following historic oil price highs.
2009-2010	Najib government officially considers nuclear power, integrating it into the Economic Transformation Programme and planning for plants by 2021
2011-2015	Malaysia Nuclear Power Corporation established as country’s Nuclear Energy Programme Implementing Organisation (NEPIO); TNB develops human capital through training programmes with South Korea, Japan, and France.
2018	Second Mahathir government cancels nuclear plans.
2023	The MADANI government’s Economy Ministry launches the National Energy Transition Roadmap, which omits nuclear energy, to chart the country’s path to net zero emissions by 2050. The Ministry of Science, Technology and Innovation (MOSTI) launches the National Nuclear Technology 2030 roadmap.
2024	Cabinet approves nuclear as a clean energy option, SMR feasibility studies begin, and MyPOWER, a special agency under the Ministry of Energy Transition and Water Transformation, is appointed as next NEPIO.
2025	Malaysia signs MoU with the US for the 123 Agreement; signs the USMART, inclusive of nuclear clause; and amends the national nuclear regulatory framework in December.

The Madani government’s mid-2030s deadline is not arbitrary. From a technical standpoint, it could take 12 to 15 years to bring large nuclear power plants from the decision-making stage to the deployment phase. Small modular reactors (SMRs), meanwhile, remain relatively nascent. Their technological viability and commercial potential are expected to gain momentum and they will only be proven in the next decade.

Before any deployment, moreover, Malaysia must first ratify at least eight international conventions and protocols. Regulatory milestones alone will reportedly take 10 years. Other hurdles include insufficient expertise and public support, given the controversies surrounding nuclear energy. Public opinion typically dips after nuclear accidents but recovers during incident-free periods — yet in Malaysia’s case, no recent polling data exists, making public sentiment a major unknown. 

But less obvious challenges also abound. First, nuclear energy will require federal-state negotiations to address nuclear sites and waste management. Land falls under state jurisdiction: while states may want energy, they may not agree to hosting nuclear plants and their waste. The Lynas case could make states more wary about federal nuclear plans. Radioactive waste produced by Lynas — the largest rare earth mining company outside of China, with operations in Pahang — contaminated local water supplies. The proper disposal of waste remains delayed, triggering a sustained public backlash against state and federal authorities.

Nuclear energy may offer a low-carbon fix for Malaysia’s power needs. But the government’s energy policy must grapple with harder questions about trade-offs — and not just timelines, as current discourse tends to emphasise.

These negotiations are further complicated by the delicate arithmetic of the federal unity government, which depends on fragile coalitions and hence parliamentary numbers. In this climate, states have grown more assertive in claiming local authority, and Putrajaya’s bargaining power is weaker than in previous decades. Nuclear plans, which require both political stability and cross-jurisdictional alignment, could easily stumble amid these decentralising pressures. 

Second, Malaysia is flirting with the idea of using nuclear energy to power data centres. But both nuclear reactors, SMRs included, and data centres are water-intensive, requiring large amounts of water for cooling. To illustrate, the Najib administration explored seven locations for large-scale power plants: one in Kedah, and two each in Johor, Perak, and Terengganu. Five of these locations were near coastal areas, whereas the other two inland sites were near Perak’s Tasik Temenggor and Terengganu’s Tasik Kenyir.

Johor, a major Malaysian data centre host, recently told data centre companies to delay expansion by 18 months due to water shortages. Without integrated planning, these assets. could further strain water-stressed regions and deepen, rather than resolve, the resource tensions emerging in Malaysia’s digital economy. 

Finally, geoeconomic supply chain complications could constrain Malaysia’s trajectory. In 2025, Malaysia expressed readiness to discuss a 123 Agreement with the US, which would advance civil nuclear cooperation between the two countries. The 123 Agreement would unlock access to US nuclear technologies, a necessary move because the US holds most of the intellectual property in nuclear power and fuel technology. In October this year, the country also signed the US-Malaysia Agreement on Reciprocal Trade (USMART), which would provide the US with higher levels of market access to Malaysia in exchange for lower US tariffs on Malaysian exports.

On the flipside, USMART’s Clause 5.3.4 prohibits the purchase of “nuclear reactors, fuel rods, or enriched uranium from certain countries, except where there are no alternative suppliers on comparable terms and conditions”. While unnamed, these third-party countries are widely understood to be Washington’s strategic competitors, Russia and China. 

But the US and its allies do not dominate all segments of the supply chain. Russia holds 44 per cent of global enrichment capacity. Together with China, it dominates global markets for high-assay low-enriched uranium (HALEU), a nuclear fuel designed for the SMRs Malaysia may lean towards. Russia and China remain the only countries with commercially operational SMRs. 

Russia and China also offer reactor packages at lower cost, with subsidised financing — an appealing prospect as Malaysia continues to pare down its national debt. As Malaysia explores nuclear cooperation with multiple partners, it will have to walk a tightrope that delivers technological access without sacrificing neutrality — not for neutrality per se, but for economic and operational reasons. 

Nuclear energy may offer a low-carbon fix for Malaysia’s power needs. But the government’s energy policy must grapple with harder questions about trade-offs — and not just timelines, as current discourse tends to emphasise. Without confronting the institutional frictions, strategic dependencies, and environmental stressors that now shape the energy landscape, Malaysia risks reviving its nuclear ambitions on shakier foundations. 

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