A ‘power-first’ approach to investment in and planning of data centres in the Asia Pacific region can spearhead cleaner, more resilient and more affordable energy systems, rather than being an environmental and infrastructural burden, a new report from Deloitte has suggested.
Deloitte’s report, Powering Asia Pacific’s data centre boom: Unlocking sector growth, examines how energy planning is set to play a key role in the development of data centres and digital infrastructure in the region, where China, Japan and Singapore are already significant data centre hubs, and Australia, India and Malaysia are rapidly emerging.
As Deloitte noted, in a ‘high digital adoption scenario’, electricity consumption by data centres in Asia Pacific could grow from under 200 TWh in 2025 to more than 1,000 TWh by the mid-2030s, accounting for 2.3% of regional electricity demand.
Overall, the region’s electricity demand is set to rise by close to 50% between 2024 and 2035, as households and businesses embrace electrification.
‘A tipping point’
“Asia Pacific is at a tipping point,” commented Will Symons, Deloitte Asia Pacific sustainability leader. “AI, cloud and digital connectivity is surging, driving massive new investments in energy-intensive data centres. Across the region electricity grids are already under pressure to decarbonise and maintain affordability, resilience and security.
“Taking a power-first approach with clean energy is critical to power new data centres, accelerate decarbonisation and underpin continued economic growth.”
Energy access is seen as the most immediate constraint on data centre expansion in the Asia Pacific region, with grid connection queues and capacity bottlenecks already an issue in some markets, the report notes.
As industry leaders are discovering, embedding clean energy strategies into data centre planning from the outset can address these risks, while also improving cost visibility, reducing exposure to energy price volatility, and improving the sustainability footprint of the sector.
Other strategies being utilised by data centre operators include adopting a mix of on-site generation, energy storage and renewable power purchase agreements, locating facilities with sufficient wind or solar capabilities, and using smart systems that shift computing workloads to periods when renewable energy is more available.
‘Growth without the grid strain’
To ensure ‘growth without the grid strain’, as Deloitte puts it, the report calls for coordinated action among governments, regulators, energy providers and data centre operators, including fast-tracking permission for grid supportive projects, co-investing in shared energy and digital infrastructure, and favouring partners with verifiably additive clean energy credentials.
“AI, cloud and connectivity are driving an unprecedented need for computing power across the region,” added Abhrajit Ray, Deloitte Asia Pacific technology, media and telecom leader. “The winners in this race will be those operators and markets that treat energy as core infrastructure, not a downstream procurement choice.” Read more here.
