The growth of the data center industry means it has a greater role to play in meeting ESG goals in Asia Pacific, starting with data center design.
Data centers are critical to our digital infrastructure, providing the computing power necessary to support everything from online shopping to cloud-based applications. However, the energy they consume, approximately 1% of the global electricity supply, makes them highly controversial.
The current trends in cloud and edge computing, as well as data sovereignty, only mean that there will be more and more demand for data centers globally – and even more in the fast-growing digital economy in Asia Pacific.
Sustainability is a shared responsibility, and the data center industry has an increasingly important role to play. DigiconAsia discussed data center and ESG trends and issues with Samuel Lee, Chief Executive Officer, Digital Edge.
With growing emphasis on ESG goals in APAC economies, how is the appetite for green and sustainable data centers across the region?
Lee: It is undeniable that data centers consume a significant amount of energy and contribute to carbon emissions, accounting for approximately 1% of the global electricity supply. To mitigate this impact, the industry must innovate to build more efficient and sustainable data centers.
Governments across the region including in Japan, Singapore, and South Korea are introducing new regulations in this area, such as financial and tax incentives to promote sustainable data centers. We also see a growing appetite from our customers, vendors, and construction partners to work with those operators that share common commitments to ESG principles.
Today data center providers are adopting various strategies to enhance their sustainability credentials, including renewable energy sourcing, utilizing energy-efficient equipment, and waste heat recovery. As a data center operator, investing in energy efficiency is a win-win, because efficient energy management is critical in meeting our carbon targets and delivering cost savings to our customers.
That’s why at Digital Edge we have pledged to design all our newly constructed data centers to achieve a target annualized Power Usage Effectiveness (PUE) of 1.25 or better at 70% load.
We also collaborate with vendors that share our ESG principles such as a supplier of recyclable plastic data center piping, which has a lower carbon footprint than metal alternatives.
What are some key innovative technologies supporting sustainability in data centers?
Lee: Using innovative technologies is important to drive sustainability in data centers. However, we need to take a holistic view of the whole process of building, designing, and operating more sustainable data centers, and crucially, working together with our customers and partners to make a meaningful impact on climate change.
For instance, Digital Edge is investing in the latest industry technologies and have become the first colocation operator to pioneer Nortek’s Statepoint Liquid cooling solution in Asia. We recently deployed this at our newly built NARRA1 data center in Manila and will shortly be installing it in our upcoming EDGE2 facility in Jakarta.
This innovation utilizes evaporative cooling, resulting in a substantial reduction in annual power and water consumption compared to existing technologies. While the effectiveness of this system will be assessed over time, early indications are positive. During Phase 1 testing, our Manila data center achieved a PUE of 1.15 at 75% load, surpassing its ambitious design PUE of 1.193 (against a global average of 1.55 (ref.)). This makes it one of the most energy efficient data centers in the Philippines.
We have also established partnerships with those that share our commitments to sustainability. For instance, our joint venture with SK Ecoplant in South Korea to build a 100+ MW facility in Bupyeong-gu, Incheon, will utilize Bloom Energy fuel cell technology to reduce carbon emissions and generate electricity with more predictable energy costs and greater reliability.
This fuel cell is expected to produce 2,890,800 kWh annually, powering all the general lighting and energy for our data center’s shell and core, including indoor and outdoor lighting, power sockets, parking lots, elevators, etc.
In addition to these new technologies, it’s important to consider the full life-cycle of a data center development and prioritize circular economy principles. At our NARRA1 site in Manila, we worked to reuse and maintain structural elements from the existing brownfield site during the construction, comprising 62.75% of the total area of the flooring, roofing, exterior framing, and interior walls.
We collaborated with design consultants to ensure that the facility achieved triple certification under the highest green building standards (LEED Gold, BERDE, and EDGE). These efforts included implementing small changes such as utilizing high-albedo materials on the roof area to decrease heat absorption and installing water-efficient plumbing fixtures, all of which cumulatively reduce the building’s carbon footprint over the long term.
What are some key challenges and opportunities for the data center market across APAC today?
Lee: The APAC data center market remains robust, fueled by increased demand from global hyperscale cloud providers. There is no doubt that the surge in internet adoption and the accelerated uptake of digital services during the COVID-19 pandemic have contributed to this trend. Additionally, hyperscale customers are expected to capture 41.7% of the global colocation market share by 2026. The decentralization of hyperscale cloud platforms, especially in emerging markets and second-tier cities, is further driving the demand for data centers across the region.
Separately, the proliferation of Internet of Things (IoT) and artificial intelligence (AI) technologies also drives the need for more data storage and processing, creating opportunities for data center providers. Low latency is the most critical aspect of the customer experience, prompting internet and cloud providers to strive for equipment deployment in closer proximity to the end user.
However, the diversity of Asia presents challenges for businesses operating in the region. We acknowledge that each market is distinct, and what works in one country may not be suitable for another.
We also continue to see a talent shortage across the industry. The Uptime Institute predicts staff requirements for data centers globally will reach 2.3 million by 2025. However, the competition for talent in Asia remains intense at all levels, especially in Japan where demographic challenges pose additional obstacles. The data center industry is also still in a nascent stage in many emerging markets, further adding to the talent shortage.
How is Digital Edge meeting these challenges and growth opportunities in the region?
Lee: Our go-to-market strategy is comprehensive, comprising both organic and non-organic growth approaches. Our hybrid, carrier-neutral model enables us to cater to a diverse customer base, ranging from large hyperscalers and cloud and CDN providers to major local internet service providers. These anchor tenants attract enterprise customers to our facilities, and we leverage channel partners to support our sales operations. For example, we recently partnered with Zenlayer to offer a one-stop digital hub for multiple-edge services in East and South-east Asia.
We also recognize the crucial role of interconnection in fostering a thriving digital ecosystem, which is why we provide efficient and cost-effective interconnect services alongside our colocation products. Our partnerships with major local internet exchanges such as BBIX in our Osaka facility and the Indonesia Internet Exchange in our Jakarta data center contribute to creating a seamless digital fabric that adds value to our customers.
To address the challenge of diversity, we seek out appropriate local partners who can assist us in navigating new territories while maintaining consistency in service quality across our platform. For instance, in our new Mumbai project, we have partnered with India’s National Investment and Infrastructure Fund as well as AGP DC InvestCo Pte Ltd, who bring solid local know-how to our data center expertise as well as on-the-ground real estate development and construction experience.
To address the challenge of talent shortage, we are committed to providing training and upskilling opportunities to employees. Furthermore, we encourage the next generation of talent through scholarships and ESG activities.