Water plays an important role across Tenaga Nasional Berhad (TNB)’s operations, from supporting electricity generation to maintaining operational facilities and workplaces. As demand for water continues to grow and climate-related pressures affect the availability of water resources, managing water efficiently is becoming increasingly important for strengthening operational resilience.

Recognising this, TNB has established its Water Management Strategy, providing Group-wide direction to systematically improve water efficiency through the transition to cleaner energy, operational optimisation, water circularity and a stronger culture of water stewardship.

At the heart of the strategy is TNB’s target to achieve a 15% reduction in water intensity by 2035 against the FY2025 baseline.

Understanding TNB's Water Footprint

TNB’s operations involve significant volumes of water, particularly within power generation. In FY2025, approximately 99.76% of TNB’s total water withdrawal comprised seawater and surface water, which are primarily used for operational purposes such as cooling. Nearly all of this water is discharged back into the environment and therefore does not contribute to TNB’s reported water consumption.

Water consumption represents the difference between the amount of water withdrawn and discharged, while water intensity measures the amount of water consumed relative to electricity generated. This enables TNB to assess not only how much water is being used, but also how efficiently it is being used to support its operations.

Town water represented only 0.24% of TNB’s total water withdrawal. Of the 10,663 megaliter (ML) of town water withdrawn in FY2025, TNB recorded 8,920 ML as water consumption. Power plants accounted for approximately 64% of this consumption, while the remaining 36% was associated with buildings and other non-generation activities.

Figure 1: TNB’s FY2025 Water Profile

While town water represents a relatively small proportion of TNB’s overall water withdrawal, it is a key focus area for water-reduction initiatives. Improving efficiency in both generation and non-generation activities therefore provides opportunities for TNB to manage water consumption more effectively and support its longer-term water-intensity reduction target.

Why Water Management Matters

The importance of water management extends beyond reducing consumption. Growing demand for treated water driven by urban development, industry and data centres could increase competition for available water resources, particularly in areas facing supply constraints or water stress. Over time, this may affect water availability and supply reliability for TNB’s operations.

Climate variability introduces a further challenge. Drought, El Niño events and sustained hotter conditions can affect source availability and reservoir levels, potentially increasing risks to hydroelectric and other water-dependent operations during prolonged dry periods.

TNB therefore closely monitors its water use, invests in technologies that improve water efficiency, and strengthens water management practices to optimise consumption, manage costs and support compliance with environmental requirements.

Four Pillars for Stronger Water Stewardship

TNB’s Water Management Strategy is built around four strategic pillars that bring together changes in the generation portfolio, operational improvements, circular water solutions and behavioural change.

TNB Water Management Strategy

Figure 2: TNB’s Water Management Strategy

1. Transition to a Cleaner Energy Mix

   • The transition towards cleaner generation technologies can contribute directly to reducing TNB’s overall water intensity.
   • TNB's assessment indicates that coal-fired power generation is more water-intensive than other generation technologies. In general, coal-fired power plants consume around four times more water than gas-fired power plants.
   • As TNB expands gas and renewable energy capacity and progressively retires coal-fired generation in line with applicable Power Purchase Agreements (PPAs), changes in the generation mix are expected to support improved water efficiency over time. This highlights an important connection between TNB’s energy transition and the more efficient management of natural resources.

2. Improving Water Efficiency and Optimisation

   • The second pillar focuses on improving the efficiency of water use across TNB’s operations.
   • This includes optimising water use within operations, incorporating water-efficient engineering design into thermal plants and corporate facilities, strengthening water audits and infrastructure management, and improving consumption visibility through enhanced metering and continuous monitoring.
   • Greater visibility of water consumption can help operational teams understand where water is being used, identify unusual consumption patterns and respond more effectively to inefficiencies or losses.
   • TNB is already implementing targeted water-efficiency initiatives across its operations, including zero-leakage valve upgrades at Perai Power Station and Southern Power Generation (SPG), as well as water-efficient fittings, digital sub-metering and municipal-water leak detection at TNB Platinum.
   • Together, these initiatives support more efficient water use across both generation facilities and corporate buildings.

3. Advancing Alternate Water Sources and Circularity

   • Reducing reliance on conventional treated-water supplies is another important element of TNB’s strategy.
   • The strategy identifies opportunities to scale up rainwater harvesting systems at major operational sites, expand closed-loop wastewater recycling and treated-effluent reuse, and evaluate the use of seawater desalination technologies for suitable thermal and coastal assets.
   • These measures can help diversify water sources while allowing water to remain within operational systems for longer, supporting a gradual shift towards a more circular approach in which water is captured, treated and reused where technically appropriate.
   • Existing initiatives also demonstrate how alternative water sources and circularity are already being applied across TNB. Rainwater harvesting systems are in place at TNB Platinum, Balai Islam and other facilities for uses such as landscape irrigation and building maintenance. At Sultan Azlan Shah Power Station and Tuanku Muhriz Power Station, harvested rainwater is used for coal-yard dust suppression.

4. Building a Culture of Water Stewardship

   • Technology and infrastructure are important, but sustained improvements also depend on people.
   • The fourth pillar therefore focuses on building greater awareness of water conservation across TNB through Group-wide employee engagement and behavioural change initiatives.
   • Employees have an important role to play in identifying opportunities to avoid unnecessary water use, responding to leaks or abnormal consumption and incorporating responsible water practices into everyday activities.
   • TNB also intends to strengthen proactive dialogue with water regulators, utility providers and local basin authorities, recognising that effective water management requires cooperation beyond organisational boundaries.
   • Through greater awareness and stronger collaboration, water stewardship can become part of how operational and business decisions are made across the Group.
   • This approach is already reflected in TNB’s ‘Drip by Drip, Watt by Watt’ programme across 109 TNB office buildings. The initiative combines employee engagement, infrastructure improvements and continuous monitoring to encourage more mindful water and energy use.

Enabling the Strategy Across TNB

Supporting the four strategic pillars are several enablers designed to strengthen implementation throughout the organisation.

• Governance and accountability

  provide clear ownership of water-management responsibilities while supporting consistent monitoring and reporting.

• Digitalisation and artificial intelligence

  can strengthen water metering, improve data quality and enable more effective performance tracking through dashboards and other monitoring tools.

• Talent and capability development

  will help strengthen water-management knowledge and encourage the sharing and institutionalisation of good practices across TNB’s business entities.

• Communication and stakeholder engagement

  will help convey water priorities and progress while fostering strategic partnerships with relevant stakeholders.

• Capital allocation and value creation

  will help ensure that water-related considerations are appropriately reflected in investment decisions, operational planning and long-term value creation.

Together, these enablers help move water management beyond individual initiatives towards a more coordinated and accountable Group-wide approach.

Towards 15% Lower Water Intensity by 2035

TNB’s water-management ambition is anchored by its target to achieve a 15% reduction in water intensity by 2035 against the FY2025 baseline.

In FY2025, TNB recorded an overall water intensity of approximately 0.118 litres per kilowatt-hour. The Group’s water-intensity profile shows that generation activities recorded the highest water intensity at 0.075 L/kWh, reflecting the comparatively greater water requirements associated with power generation. Other operational, corporate and supporting activities, including networks, education, corporate buildings and offices, and district cooling, recorded lower water intensities.

Figure 3: TNB’s FY2025 Water Intensity Profile

Generation activities also account for approximately 64% of TNB’s total water consumption, highlighting the significant opportunity to improve water efficiency within the generation segment. At the same time, continued efficiency improvements across non-generation activities will also contribute to the Group’s overall water-intensity reduction efforts.

Based on current projections and assumptions, including changes in TNB’s generation mix, the expansion of renewable energy and the introduction of new combined-cycle gas turbine capacity, overall water intensity is projected to reach approximately 0.100 litres per kilowatt-hour by 2035.

The projected trajectory highlights how TNB’s water performance is closely linked with the wider transformation of the electricity system. As cleaner and comparatively less water-intensive generation technologies make up a greater share of the generation portfolio, TNB has an opportunity to progressively reduce the amount of water required for each unit of electricity produced.

Managing Water for a More Resilient Energy Future

For TNB, responsible water management is not simply about using less water.

It is about ensuring that water resources are measured carefully, used efficiently, reused where possible and managed in a way that supports reliable operations over the long term.

Through its Water Management Strategy, TNB is bringing together cleaner energy, operational efficiency, water circularity, stronger monitoring, responsible governance and behavioural change under a common framework.

This integrated approach provides a pathway towards TNB’s 15% water-intensity reduction target by 2035, while strengthening the Group’s resilience to emerging pressures on water availability.

As Malaysia's electricity system continues to evolve, effective water management will remain an important part of building a more efficient, resilient and sustainable energy system.

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