How Singapore and Asia’s tech sector can lead in renewable energy adoption

With the launch of the Singapore Green Plan 2030, Singapore has set its sights on scaling its net-zero ambitions, with a focus on greening its tech sector. Putting commitment to action, the government has imposed a moratorium on the building of new data centres – given its intensive consumption of electricity and water – as it seeks more sustainable options.

This underscores the urgency for the region’s Information and Communications Technology (ICT) sector to seek sustainable alternatives, to ensure continued economic growth in an increasingly environmentally-conscious Asia.

Similar to how the ICT sector has driven the renewables market in the U.S. and Europe, it has the potential to accelerate the development of renewable energy opportunities in APAC. The recent growth and proliferation of ICT companies is unprecedented, with Asia accounting for 52 per cent of global growth in the revenue of technology companies over the last decade. Furthermore, the region is predicted to be the fastest-growing location for data centres over the next five years.

On a global scale, the ICT sector continues to play an outsize role in accelerating the transition to clean energy. RE100 — a leading global initiative that brings together hundreds of large businesses committed to adopting 100 per cent renewable electricity — counts ICT companies for almost a fifth of its current membership. Collectively, they have purchased just under a quarter of total renewable energy available, with demand only set to grow further. 

The Opportunity for APAC ICT Companies

As the ICT sector’s operational footprint increases in APAC, so will its energy requirements and corresponding carbon footprint. Unique, disruptive changes in this sector make it hard to quantify future renewable energy demands, but it is predicted that in order to transition to 100% clean energy, the ICT sector’s demand for renewable energy would account for between 11% and 30% of the total renewable energy generation in the region.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

To successfully navigate the complexities of these diverse markets and to take advantage of new opportunities provided by national initiatives, ICT companies with ambitious renewables goals must embed flexibility within their clean energy strategy and explore innovative solutions.

Firstly, ICT leaders need to develop a flexible strategy. Every country has its specific economic, technological, and regulatory parameters, which must be dealt with on an individual basis. In devising a strategy that will successfully lead to increased use of renewables, and ultimately to 100% green energy, it is essential for leaders to familiarise themselves with the details of each country’s policies and to take advantage of any renewable energy opportunities that are available. 

In situations where conditions are uncertain, ICT corporations should focus their efforts on purchasing Renewable Energy Certificates, which have annual contract durations; this will enable organisations to quickly adopt power purchase agreements (PPAs) as they become more available. 

Secondly, leaders will need to tap on innovative solutions. Though still limited in number, there are already several examples of countries and corporations finding innovative clean energy solutions. For example, VPPAs — which allow smaller buyers and companies without energy trading expertise to participate — are currently being developed by the private sectors between Singapore and Malaysia. The Indian government is evaluating the feasibility of VPPAs to increase access to renewable energy for corporations.

There are also technical innovations being pursued to facilitate the importation of clean energy. For example, Suncable is planning to establish the world’s first intercontinental power grid between Singapore and Australia. This project aims to harness and store solar power generated in Australia and transmit this energy via a high-voltage direct current transmissions system to Singapore. The arrangement would address the land scarcity issues in Singapore, while supplying up to 20% of the country’s total electricity needs. The Singapore and Japanese governments are also evaluating the technical and economic feasibility of importing green hydrogen from Australia to accelerate their clean energy transition. As some of the first customers for this electricity, technology companies will play a critical role in making these solutions economically viable.

Finally, ICT leaders need to be the advocates for change. In addition to developing individual corporate strategies and keeping an eye on the latest technical developments, one of the most important steps APAC ICT companies can take is to request changes in the RE100 criteria that would allow them to claim imported renewable energy to achieve RE targets. This would serve to promote cross-border transfers and help transform the APAC power grid – leading the region, and the world, that much closer to 100% renewable energy.

Hitting the Renewable Energy Mark

While adoption of renewable energy in APAC has been slow, the market is changing rapidly and a growing number of companies in the region are making a difference. Taiwan Semiconductor Manufacturing Company (TMSC), a key supplier of chipsets for Apple, signed PPAs for 1,200MW of clean energy, making it the leader in corporate PPAs in Taiwan. Tencent had also recently become the first large Chinese technology company to announce its intention to achieve net-zero emissions by 2060, with renewable procurement as a main decarbonisation lever.

With increased demand fuelled by the technology sector, growing pressure to decarbonise the region, and an influx of new commercial and technological innovations, Singapore, alongside APAC, can achieve its net-zero ambitions, if it taps on the tremendous growth in renewable energy opportunities in the coming decade. As economic, technological and regulatory conditions evolve, organisations with ambitious sustainability goals can ride the crest of the wave to accelerate their transformation.  

The writer is director, sustainability solutions, APAC, at ENGIE Impact.