APAC's Sustainable Data Centres Set for $23 Billion Take-off

The Asia Pacific (APAC) region is on the cusp of a major expansion in sustainable data centres.  The market is expected to grow at a CAGR of 15.44 per cent from 2023 to 2029, driven by the increasing adoption of renewable energy and cutting-edge technologies by data centre operators and governments, striving to mitigate the impact of climate change.

China, Australia, Japan, India, Thailand, Indonesia, Singapore and Malaysia are at the forefront of the sustainable data centre market across the region. Government and data centre operators in these countries have achieved substantial progress in using renewable energy sources like solar, wind, hydro and biomas. This year, solar and wind energy are dominating the market, with geothermal energy emerging as a viable option in South Korea and Indonesia.

Major tech company such as Google, Microsoft, Teucent, AWS, Alibaba and Huawei are joining hands with renewable energy providers and securing regional power purchase agreements to power their cloud data centre sustainably. Partnerships are crucial in reducing the carbon footprint of data centres while ensuring reliable and cost effective energy solutions.

With innovations in battery technology and alternative energy sources are powering the sustainability of APAC data centres, tech majors like Microsoft and Pacific Northwest National Laboratory, are developing materials that reduce lithium used by up to 70 per cent. Among others, companies like Honda and Mitsubishi are exploring hydrogen fuel cells to power data centres, with pilot projects running through to 2026. Leaders such as STT, GDC, GDS and Equinix have adopted hydro-treated vegetable oil fuel, significantly reducing emissions.

These companies are transitioning to hydrogen fuel cells and other green technology, setting the standard for sustainable data centre operations across the region.

Governments across APSC are implementing regulations and incentives to encourage the use of renewable energy in data centres. In China, the finance ministry has introduced strict standards for data centre efficiency, requiring a power usage effectiveness of less than 1.4 by 2023 and 1.3 by 2025. Singapore has launched the sustainable tropical data centre test bed to advance green data centre technology in tropical climates aligning with its ambitious green goals. Thailand’s 4.0 initiative aims to invest $6 billion in smart grids by 2030, enhancing grid resilience and reducing carbon emissions. Australia’s commendable renewable energy transition efforts are oriented to converting its main power grid to 100 per cent renewable energy by 2025, largely through solar wind and energy and storage initiatives.

While renewable energy adoption is accelerating, water usage remains a significant concern. In China data centre water consumption is projected to triple by 2030, driven by AI and other data heavy technology. Some cities such as Shanghai have set water usage effectiveness targets but national standards remain absent.

Australia and Singapore are also moving towards water conservation with initiatives to boost solar energy capacity and improve energy storage systems. India is on track to install 500 gigawatts of renewable energy by 2013 further supporting the region’s transition to greener data centre operations.