According to the International Energy Agency (IEA), Southeast Asia (SEA) is projected to account for more than 25 per cent of the planet’s energy demand over the period to 2035, second only to India. It attributes this to various factors including robust economic development, surge in population and passenger vehicles, mounting demand for air conditioners for its tropical climate (estimated at 186 million units in 2023 and 457 million units in 2050), and reinforcement of SEA’s position as an international manufacturing and industrial nucleus.
Over the years, the data centre market is expected to be one of the key drivers of SEA’s economic development as friendshoring in the Global South gains traction. Industry estimates project SEA’s data centre market to grow from $10.24 billion in 2023 to reach $17.73 billion in 2029, at a compound annual growth rate (CAGR) of 9.59 per cent while its data centre cooling market is likely to grow by $563.7 million between 2024 and 2028 at a CAGR of over 6.78 per cent.
That said, data centres are known to be resource-hungry, with almost 40 per cent of energy going to their cooling systems. Goldman Sachs anticipates that as the artificial intelligence (AI) revolution gathers steam, the power demand by data centres will increase by 160 per cent by 2030 while another study projects the daily water usage of a data centre to be 300,000 gallons. However, as the clamour around global warming simmers and the availability of potable water shrinks, data centres can no longer afford to recklessly tap into traditional sources of energy. A look at the key sustainability trends being adopted by data centres across the region…
Indonesia
Boasting the fourth highest number of internet users in the world and over 90 data centres, Indonesia is a strategic data centre hub in the region. Acknowledging the need to cut their carbon footprint, prominent players in Indonesia have started taking measures to make their data centres sustainable. For instance, state-owned telecommunication company PT Telekomunikasi Indonesia is working to build green data centres with a total capacity of 500 MW by 2030, powered by AI-driven energy management systems. This is in line with the company’s vision to lessen its carbon emissions by 20-25 per cent by 2030. Another key player, PT DCI Indonesia Tbk has introduced Indonesia’s first solar-powered data centre having a capacity of 12 MW. Additionally, the company is investing in automation for energy efficiency in its data centres and is reportedly building a green data centre in Bintan, Riau, with a planned capacity exceeding 1,000 MW.
At the same time, Microsoft, for example, is designing data centres in Indonesia with backup generators powered by renewable biofuel and water-cooled chillers. It is also exploring solutions to increase recycling efficiency. Similarly, the entire campus of NTT’s Jakarta 2 Annex has been designed to be a 100 per cent green data centre, while the Princeton Digital Group (PDG) has entered into a multi-year contract with PT Cikarang Listrindo Tbk to acquire energy generated from biomass for its 30 MW data centre campus situated in Cibitung. Another leading operator, BDx Data Center launched the first phase of its 500 MW renewable-powered AI data centre park, CGK4 campus, in Indonesia.
Looking ahead, Indonesia’s data centre industry is expected to grow at a CAGR of 14 per cent from $2.06 billion in 2023 to $3.98 billion in 2028. A study by Bain & Company, GenZero, Standard Chartered and Temasek, found that Indonesia saw the most private investment in green projects, signalling optimism for the growth of green data centres in the country.
The Indonesian government is encouraging data centres in the country to prioritise renewable energy over conventional sources, as it aspires to have net zero carbon emissions by 2050.
Malaysia
Home to 33.59 million internet users and 32 operational data centres, Malaysia is one of the prominent players in the data centre landscape in SEA. Its proximity to key markets, favourable tax policies and comparatively low electricity tariffs (33.7 sen per kWh vis-à-vis 51 sen per kWh in Thailand and RM 1.11 per kWh in Singapore), coupled with the low risk of natural calamities, have made Malaysia an attractive market.
YTL Data Center in collaboration with Sea and GDS has developed a 500 MW green data centre park in Johar – the first and the largest renewable energy integrated park in the country. Similarly, Equinix’s data centres in Johar and Kuala Lumpur have features designed with energy efficiency in mind and harness innovative technologies such as cooling arrays, adaptive control systemsand energy-efficient lighting systems. A green loan has been extended to the Princeton Digital Group, whose 1,500 MW AI-ready campus in Johar is set to be one of the biggest AI-ready campuses in Asia.
Google’s upcoming data centre in Elmina business park is another data centre poised to set benchmarks in energy and water efficiency. Amazon Web Services’ plan to invest $6.2 billion in Malaysia to establish a data centre and cloud region in the country could also potentially diminish energy usage as multiple users share the same physical servers.
The Malaysian government too is driving the industry to embrace a cleaner future as the industry is projected to record a robust CAGR of 16.64 per cent during the 2023-29 period. For example, the Malaysian Communications and Multimedia Commission has established a technical code for improving the energy efficiency of data centres. Other notable initiatives include the launch of the Corporate Renewable Energy Supply Scheme, which enables corporate consumers to procure renewable electricity, and the Malaysia Digital Economy Blueprint for sustainable digital advancement.
Philippines
With 86.98 million internet users and around 24 data centres, the Philippines is an emerging market for data centres. Yet it has made remarkable strides in terms of the initiatives taken by the industry to move towards a more sustainable future. Thus, Edge’s NARRA1 data centre in Manila has become the first in SEA to attain the prestigious Excellence in Design for Greater Efficiencies (EDGE) and LEED®Gold certifications. This is attributed to its liquid cooling system, which has resulted in power usage effectiveness (PUE) of 1.193, and its several energy conserving features, including a 57 per cent reduction in lighting power density.
To add to this, key player ePLDT’s VITRO has collaborated with firms like the Meralco Group, RED Engineering and MPower to procure renewable power, whereas Zenlayer’s MNL3 Manila Data Center has a blend of state-of-the-art cooling systems with sustainable technologies like solar panels. In parallel, Converge ICT Solutions has inked a memorandum of understanding (MoU) with Supermicro to help it construct three “green”AI data centres in the country. Under the MoU, the upcoming data centres will also integrate Supermicro’s liquid cooling solutions for energy efficiency. STT GDC’s impending data centre, said to be the largest in the country, too, is being designed on the principles of sustainable and energy-efficient technologies in accordance with globally recognised standards such as a LEED® Gold certification. These include hollow core concrete slabs, recycled steel, HDPE3 piping, liquid immersion cooling, and harnessing AI and machine learning (ML) technology and advanced analytics to optimise energy use.
Going forward, the Philippines data centre market is expected to reach a staggering market size of 954.22 MW by 2029. However, given that the industry is still in its infancy in the country, the Philippines does not have any explicit green data centre policy unlike some of the other SEA countries.
Singapore
Buoyed by economic and political stability, Singapore leads the charge in terms of data centre activity in SEA as its 70 data centres account for roughly 60 per cent of the region’s capacity. The rise in data centres in the country, however, is happening sustainably. For instance, Digital Realty has installed solar panels at its SIN11 data centre and AirTrunk operates Singapore’s largest independent hyperscale data centre, which is BCA Green Mark Platinum certified. Global Switch’s Singapore Woodland data centre is also known for using energy efficient technologies. Besides, STT GDC has resolved to increase the proportion of green data centres to 65 per cent by 2028 and Equinix is set to launch a $260 million SG6 green data centre in the country that will be powered by renewable energy and have liquid cooling technologies.
Interestingly, some players have come up with unconventional approaches to curb their carbon emissions. For example, Keppel Data Centre avant-garde Floating Data Centre Park has been envisioned to harness seawater for cooling and LNG and possibly even hydrogen to generate on-site power. Singtel is using NEWater (i.e. recycled wastewater) for its cooling plants and AI for energy efficiency along with diesel rotary uninterruptible power supply devices (DRUPS) over a static battery system at its data centres.
Experts anticipate Singapore’s data centre capacity to expand by more than one-third in the coming years. Taking cognisance of this fact, the Green Data Centre Roadmap was launched on May 30, 2024, by the Singapore Infocomm Media Development Authority. At the same time, it was announced that the country can provide additional capacity to data centres if they utilise green energy.
Thailand
Thailand has an internet penetration rate of 88 per cent with 32 operational and 16 upcoming data centres. Thailand’s data centre industry has promising prospects as leading global players flock to the country though sustainability remains a key theme. For instance, Google is mulling an investment worth $1 billion to build its first data centre and cloud region in the country. Concurrently, Etix Everywhere has deployed over 6,000 square metres of solar panels in its Bangkok data centre and aims to use 100 per cent renewable energy in its data centre in 2025.
Some players are also entering strategic collaborations to explore greener options. For instance, AIS Business has joined hands with Singtel and Gulf Energy to create a green data centre in Thailand. Similarly, Evolution DC Thailand has partnered with International Gateway Company to build sustainable hyperscale data centres. STT GDC’s Thailand unit has also entered into a strategic MoU with B.Grimm Power to explore low-carbon energy solutions for the sector.
Thailand’s data centre industry is expected to grow from $652 million in 2023 to $1.54 billion in 2030. In order to drive the industry to a greener future, the government has rolled out a pilot project that will facilitate data centres to directly purchase green power.
The road ahead
In today’s era, which is synonymous with the explosion of data and technologies like AI to satisfy the needs of digital economies amidst the increase in carbon emissions as an offset of industrialisation, every watt counts. This is especially true of SEA, which has the tricky job of balancing, being the next global data centre hotspot while embracing decarbonisation. This would entail a culmination of innovative technologies such as floating data centres, reusing wastewater for cooling along with innovative liquid cooling processes and procuring green energy. It would also encompass entering into strategic partnerships to explore novel ways to cut the industry’s carbon footprint. Besides, this has to be underpinned by robust government support, which is why countries like the Philippines need to act fast before they lose out in the race against climate change.
