Data centre energy demand from Asean telcos not a ‘big risk’, says industry group

[SINGAPORE] The energy demand, and hence emissions growth, from new data centres by telecommunications companies in Asean is not “such a big risk”, said the head of climate action of GSMA, a global trade body for mobile network operators.

That’s mainly because telcos in this region have not made plans to significantly expand their data centre capabilities, unlike those in China, India and South Korea, said Steven Moore, speaking with The Business Times.

“There has been some interest from in Singapore, but there’s also some some energy constraints in this part of the world as well that we’re seeing. So, and we’ve also seen some challenges actually in Malaysia, in terms of building data centres, and particularly in the south of the country. Again, because of the pressure potentially placing on energy grids,” he said.

In addition, there is also a global crunch on specialised semiconductor chips for artificial intelligence.

Moore was speaking to BT on a GSMA report detailing the emissions data of Asia-Pacific mobile network operators that was released on Thursday (Sep 10).

Given that most (70 per cent) of a telco’s operational emissions come from mobile networks and their cell towers, a limited expansion of data centres over the next few years would not significantly add to telcos’ electricity consumption. Operational emissions refer to emissions arising from a company’s business activities (Scope 1), as well as its purchase of electricity (Scope 2).

Of course, there are exceptions. Moore highlighted that telcos in China, Japan and South Korea have indicated significant expansion plans.

For South Korea, the report stated that operators have announced plans to build more than 6 gigawatts (GW) of new AI data centre capacity by 2030, and more than 16 GW by 2035.

“If fully built, these data centres could consume between 30 and 40 terawatt-hours of electricity in 2030 – five times more than their current electricity consumption,” it said.

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The higher electricity consumption comes with expected higher energy costs as well.

The report said that the estimated cost of fuels was US$400 million in 2024, with operators consuming around 350 million litres of petrol and diesel – mostly among those in South Asia and South-east Asia – while tower companies consumed an additional one billion litres.

This cost is likely to be considerably higher in 2026, with prices of fuels surging as a result of the Iran war.

“Although many mobile operators and tower companies in the region have significantly reduced their diesel consumption over the past decade through grid connections and on-site solar and hybrid solutions, diesel generators remain the biggest source of Scope 1 emissions, and a large and volatile cost,” said the report.

Carbon emissions

Operational emissions of telcos in the Asia-Pacific rose 6 per cent between 2019 and 2024. While emissions went down by 30 per cent among operators in Japan and Oceania, they increased in many emerging markets, including South Asia and South-east Asia.

In South-east Asia, emissions from telcos rose by 20 per cent between 2019 and 2025. However, renewables only contributed 4 per cent of the region’s electricity consumption.

The share of renewables among telcos across the wider Asia-Pacific region was 15 per cent.

“South and South-east Asia have some of the most carbon-intensive and fossil-fuel-dependent electricity grids in the world. While renewable energy is increasing in many of these markets, mobile operators and other companies face challenges in accessing renewable energy,” said the report.

“In some countries, procurement mechanisms to access off-site renewables, for example, power purchase agreements, are limited or under development. In more advanced markets, barriers for mobile operators include high costs or a lack of options for distributed loads such as mobile towers,” it added.

Moore said that operators in South-east Asia face challenges as the national energy grids of their markets are still largely reliant on fossil fuels.

“There is no lack of appetite from operators in South-east Asia for decarbonising their networks, and we have many operators that have set science-based targets, and that are actively looking to improve energy efficiency, access more renewable energy, move away from diesel generators, (and) towards things like solar, battery, and alternative lower-carbon forms of fuel.”

He added: “But we know there’s also a limit to how much you can do on-site.”

However, the association expects to see more liberalisation of energy markets in the next few years.

“Once that’s happened, we expect to see mobile network operators at the front of the queue in terms of the purchase of renewables. They are definitely ready and willing buyers of renewable energy as soon as it becomes available,” said Moore.