As Southeast Asia’s young populations embrace video streaming, online shopping and generative AI, data centres will account for up to 30 per cent of power demand by 2030, according to a new report by energy think tank Ember.
The region’s data centres, which require large amounts of electricity to operate servers and cooling systems, still remain heavily reliant on fossil fuels.
However, about a third of data centres’ electricity use can be fulfilled with wind and solar through national grids by the end of the decade, without the need for battery storage, found researchers of the study.
“Abundant solar and wind power resources have been identified in key grid locations supplying data centre hubs across the five countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.This highlights opportunities for data centres to ramp up solar and wind to supply clean electricity to the same grids they draw from,” said the report.
Singapore, which currently has the most data centres operating in the region, and Malaysia, which is set to become Asean’s fastest-growing data centre hub, both sit within grids that have significant solar potential, estimated at 2 gigawatts (GW) and 14 GW, respectively. However, the Philippines and Thailand, where fewer data centres are in the pipeline, there is greater solar and wind potential, according to the report.
Singapore, which currently has the most data centres operating in the region, and Malaysia, which has the most planned data centres, both sit within grids that have significant solar potential. But the report does not claim that specific solar or wind potential can directly meet data centre power demand, as more data is needed to assess grid readiness and whether national electricity planning fully accounts for data centre growth. Image: Ember
To maximise the utilisation of the region’s clean energy potential, countries with lower current installed capacity can make use of policies like renewable energy certificates (RECs), which corporates buy as they work towards decarbonisation goals, said Shabrina Nadhila, lead author of the report and electricity policy analyst for Southeast Asia at Ember.
Developers in Malaysia and Thailand are the biggest issuers of RECs in Southeast Asia, with Singapore being a growing player, though its renewable energy output is minimal. The Philippines effectively left global RECs platforms in a bid to avoid double-counting, which refers to environmental attributes associated with a single unit of renewable energy generation that are claimed twice, after the country started a national compliance market in 2021.
Power purchase agreements (PPAs), which is a preferred method among tech companies to secure a stable renewables supply with a guaranteed long-term agreement, are needed to accelerate solar and wind deployment to attract more private capital for clean energy generation, storage facilities and grid modernisation, suggested the report.
Will renewable energy be enough to support the region’s AI boom?
Although powering a third of data centres with solar and wind is a “strong start”, it is still not enough to meet the electricity needs of the region’s AI boom, said Nadhila.
“It is not the full solution, especially with the AI boom driving demand even higher,” Nadhila told Eco-Business. “Solar and wind will still need to be complemented by battery storage and smarter energy use. Batteries help unlock more value from intermittent renewables, while energy efficiency can curb excessive consumption and reduce the need for even more capacity.”
Major tech companies with data centres have been making ambitious commitments to renewables, but progress has been slow in Southeast Asia, noted the study.
Google, which aims to run on 24/7 carbon-free energy across all grids it uses by 2030, only sources 0.15 per cent of its total 2.8 Terawatt hours of electricity consumption from renewable energy in Southeast Asia. In Indonesia and Singapore, where it operates data centres, only 13 per cent and 4 per cent of hourly electricity consumption, respectively, is carbon-free, reflecting the limited availability of renewables to meet its demand, wrote the authors.
However, the commitment of major tech companies to renewables highlights the growing importance of sustainability in the data centre industry, added the study.
Amazon Web Services pledged to power all of its global operations by renewables by 2025 and reached this target ahead of schedule in 2023. The company has contracted 274MW of renewable capacity in Indonesia and Singapore, with projects at various stages of development.
Similarly, Meta, the world’s fifth most valuable tech firm, met its 100 per cent renewables target in 2020. In Singapore, where it owns Southeast Asia’s largest data centre capacity, Meta procures 174MW of solar and wind energy.
