Global disruption spurs rapid growth for data centre sector in Southeast Asia

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The ongoing global pandemic has shone a light on how dependent our economies have become on digital technology. With rapid digitalisation and the surge in demand for cloud-based services across the region, Southeast Asia is set to be the fastest growing area for the co-location of data centres over the next five years. Yet, the industry has among the highest carbon footprints in the business world today.

The Covid-19 pandemic has triggered an unparalleled acceleration in digital transformation and underscored the invaluable role of data centres in the face of global disruptions. At the same time, there is rising global awareness of the urgency to address climate change and decarbonise our economies. A new report from Digital Realty and Eco-Business Research delves in to how the sector can decarbonise even while building better cloud solutions.

A region for growth

According to the report, Southeast Asia is a prime market for data centre development and Singapore continues to drive its growth. However, the country’s thriving technology industry and high data centre demand has contributed to its energy consumption per capita being one of the highest in the world.

“Singapore needs to address several challenges if it is to remain a competitive and sustainable market for data centres,” Jessica Cheam, managing director Eco-Business, says. “Its limited land size, tropical climate, lack of cost-effective renewable energy supply, and shifting policies for data centre development — in particular, a moratorium on new data centres, which has been put in place until 2021, are key challenges impeding the development of data centres.

“But there are solutions today which can help achieve greener, more sustainable data centre operations. These include measures to increase renewable energy supply, as well as using viable cleaner fuel alternatives such as hydrogen.”

Cooling needs represent 35 to 40 per cent of total data centre energy demand, making energy efficient UPS (uninterruptible power supply) systems and cooling technologies, including variants of liquid cooling, a key area where data centre operators can reduce energy usage as well as costs. The use of seawater for cooling, as well as underground spaces for data centre development in the region, are also being assessed. In addition, experts are mulling the possibilities of running data centres efficiently using primarily natural cooling in Southeast Asia’s tropical climate.

“For continued industry growth, government authorities need to provide regulatory certainty and set out a long-term roadmap for data centre development that considers its climate impact,” Cheam adds. “Government support for technological innovations such as hydrogen will help data centre developers and operators integrate these sustainable features into the design and siting of their data centres.”

Other markets in the region also show huge potential including the emerging markets in Malaysia and Indonesia. If investors are provided with political stability and the right policies, Eco-Business expect to see strong and sustainable growth in data centres.

Sustainability is a growing priority in the region

In compiling the report, Eco-Business interviewed numerous experts who emphasised that industry players need to be bolder in testing and integrating new technologies to raise the efficiencies of data centres. Lastly, observers note that greater collaboration across the entire system, from consultancies to research houses, data centre providers to academics, will be key in raising awareness and seizing opportunities to achieve sustainable growth in the long term.

“Sustainable practices and environmental stewardship have evolved to become a priority in the global economy,” Aaron Binkley, senior director sustainability programme at Digital Realty, says. “Businesses have shifted their focus on sustainability, integrating it as a core aspect of their enterprise business strategy.

“With the rapid growth of the digital economy, the demand for purpose-built data centres is growing in lock step. When taken as a class of building, data centres are among the highest consumers of power. It is more critical than ever for enterprises to maximise efficiency and seek clean energy solutions for their data centre infrastructure.”

Binkley points to the efforts to improve the energy efficiency of data centres, such as cooling system upgrades, expanding the operating parameters of data halls, and optimising air flow by using smart sensors and controls. He believes that they will remain an important area of focus but highlights the fact that organisations are also capturing significant sustainability gains by switching to clean energy. “With consumers becoming increasingly aware and interested in social and environmental issues, it is more imperative that organisations look to renewable and carbon-free energy as a sustainable resource for the long term,” he adds. “Implementing green practices in data centres not only benefits the planet but is also good for business. The use of renewable energy resources can go a long way in helping businesses attract and retain customers while helping them achieve sustainable objectives.”

A crucial part of modern life

If there is one thing that Covid-19 has proven, it is that data has become an indispensable part of modern life and business operations. Every day, millions of digital transactions happen behind the scenes without us noticing. “But as we continue to grow products and services in this digital economy and rely on it to feed our human connections, we cannot ignore the growing energy footprint and planetary impact that goes along with it,” Cheam continues. “The report breaks new ground in highlighting the pressing challenges faced by the data centre industry as it expands to meet the rising global need for data. This is especially challenging in a region such as Southeast Asia where the tropical climate and policy environment does not necessarily provide the easiest of conditions.”

But Southeast Asia is home to the fastest-growing economies in the world, and its rapid development will accelerate its demand for data services. Set amid this context, it is crucial that data centre providers find a way to meet this need while ensuring that they are playing a part in helping countries meet their climate targets.

The report highlights a key message: Technology that can reduce the carbon footprint and energy intensity of data centres is already available, or fast emerging. “Governments need to provide policy environments that allow the industry to step up and accelerate solutions such as the wider adoption of renewable energy, the use of hydrogen as a clean fuel source, and other efficient cooling methods,” Cheam concludes. “Regulators need to create the right set of incentives to get operators and their clients to adopt best-available technologies, while data centre players must work with researchers to test-bed and scale up low-carbon solutions.”




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