Making own power one of the ways Apac data centres can unlock US$800 billion: Deloitte
Up to 20% of planned projects globally are at risk of delay due to grid-access bottlenecks
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[SINGAPORE] To unlock a projected US$800 billion in regional investment by 2030, Asia-Pacific data centre operators must change how they approach new projects, according to Deloitte.
Such operators may no longer be able to rely on increasingly strained national electricity grids, said a report from the consultancy, released on Tuesday (Mar 10). It warned that a failure to adopt a “power-first” approach could result in data centre operators facing delays in deployment, exposure to volatile power prices and regulatory restrictions.
Electricity consumption by Apac data centres is forecast to quintuple in the next decade – surging from under 200 terawatt-hours (TWh) in 2025 to more than 1,000 TWh by the mid-2030s.
This demand will largely be driven by artificial intelligence (AI) and cloud computing, and further locked in by the region’s booming Internet of Things (IoT) sector. The number of IoT devices is projected to hit 38.9 billion by 2030, from 14.5 billion in 2022.
“AI, cloud and connectivity are driving an unprecedented need for computing power across the region,” said Abhrajit Ray, Deloitte Asia Pacific’s technology, media and telecoms leader. “The winners in this race will be those operators and markets that treat energy as core infrastructure, not a downstream procurement choice.”
This race for digital dominance is already reshaping the region. While Singapore, Japan and China remain established digital powerhouses, the report noted that massive new capital has been rapidly flowing to markets such as Malaysia, India and Australia.
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Still, all these markets face the same fundamental hurdle. Up to 20 per cent of planned projects globally are already at risk of delay due to severe grid-access bottlenecks, noted the report.
Operators also face a tightening regulatory squeeze: Markets such as Singapore, China and Japan are actively pursuing carbon pricing, while regulators are pushing new facilities to meet strict power usage effectiveness ratios.
A “power-first” approach
Apac’s data centre sector can grow rapidly while aiding decarbonisation, but only if the ecosystem adopts a “power-first” approach – that is, designing grid-boosting clean energy into new projects from the start, said Deloitte.
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“Electricity grids are already under pressure to decarbonise and maintain affordability, resilience and security,” said Will Symons, Deloitte Asia-Pacific sustainability leader. “Taking a power-first approach with clean energy is critical to power new data centres, accelerate decarbonisation and underpin continued economic growth.”
In practice, this would mean operators will have to stop treating power procurement as a downstream task or relying on utility green tariffs that compete for existing grid capacity.
Instead, Deloitte urged operators to become financial catalysts for new infrastructure.
By signing long-term power purchase agreements, data centres can act as “revenue anchors” to underwrite entirely new wind and solar farms, ensuring a net addition of energy to the grid.
Facility architecture must also evolve. Integrating large-scale battery storage is now essential to manage intermittent renewables, smoothen demand and capture new revenue by selling power back to the grid during peak times.
Additionally, “intelligent load shifting” allows operators to use AI to separate urgent tasks from “delay-tolerant” workloads, such as AI model training, and shift heavy processing to times when renewable energy is cheapest.
Another strategy, dubbed “coal-to-compute”, involves repurposing retiring fossil fuel power plants into data centre precincts. Deloitte noted that these older industrial sites are highly attractive because they already possess the high-capacity grid connections, substations and transmission access that new data centres need.
To maximise efficiency, Deloitte also recommended establishing “clean energy data zones” that co-locate data centres directly with massive renewable mega-projects, as moving data is often cheaper than moving electricity.
However, the report flagged a reality check for land-scarce markets such as Singapore, where proposed zones have struggled to attract interest. The remote locations required for massive renewable farms often conflict with the sector’s strict low-latency requirements, which demand proximity to urban end-users.
Ultimately, the stakes could extend far beyond tech industry profits, said Deloitte. Massive new data centre demand without dedicated clean energy to support it may force governments to delay the retirement of polluting coal and gas plants just to prevent blackouts, derailing the region’s decarbonisation targets.
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