Here is how Indonesia, Malaysia and Singapore have been strategizing DC industry growth amid tight resource management and zero carbon commitments
Over the last two years, data centers (DCs) in the Asia Pacific region (APAC) have experience unprecedented levels of growth, driven by strong demand in regions such as India and China.
Similarly, the South-east Asian (SEA) region has seen new data centers being built at a fast pace to meet the surging demand for digital services.
However, that growth is not equal across the board. For example, while Singapore is a mature, established data center hub that leads the rest of the APAC outside China, the country’s carbon commitments have seen limiting of the construction of new data centers: initially with a three-year moratorium, and subsequently through tight allocation of new data centers and capacity.
Reshaping DC growth
The control of data center growth in Singapore has been part of the country’s plans to achieve its stated sustainability goals.
To make up for the power constraints, its government has resorted to a plan to blanket the densely populated city-state with solar panels to achieve at least 2 gigawatt-peak (GWp) of installed solar capacity by 2030. It is also actively exploring other renewable energy sources, including geothermal energy, and making a bet on green hydrogen, with the first hydrogen-ready power plants slated to go live as soon as 2026.
Further out, the ASEAN power grid is slowly taking shape to optimize green power utilization across the region, with an initial 100MW from hydropower plants coming from Laos, through to a chain of cross-border interconnectors to Singapore in 2022, and more from Malaysia in 2024.
However, the latter phases of this audacious initiative are far more challenging, and will take many years more to realize. For now, low supply and high demand mean Singapore has one of the lowest vacancy rates around the globe at 1.65%, according to figures from Cushman and Wakefield. Data from the latter firm also point to countries such as Indonesia, Malaysia, the Philippines, and Thailand all being on track to more than double their operational capacity over the next five to seven years:
- With a comparably larger data center footprint, Malaysia and Indonesia are currently each poised to exceed 500 megawatts of operational capacity over the next few years — due to government initiatives such as setting up Special Economic Zones and tax breaks for attracting new data center investments.
- Crucially, the resulting new data centers will eventually be powered by renewable power, tapping into sustainability projects that are planned or underway. For instance, Indonesia plans to increase its renewable energy generation to 44% by 2030, from around 12% in 2022. On its part, Malaysia has plans to establish a smart grid and increase the proportion of renewable energy to 31% in 2025, and 40% in 2035 in total power production.
- In the meantime, Singapore hopes to remain a key market as part of a larger hub that includes Malaysia and Indonesia, with plans to double their already substantial number of subsea landings by 2030 to constitute a diversified, resilient regional network.
