Environmental concerns threaten Singapore’s data center growth

Keppel Corp., a stated-backed conglomerate, warns that Singapore risks losing data center demand unless it expands capacity in an environmentally friendly way.

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According to a senior executive from the state-backed conglomerate Keppel Corp., Singapore could lose future demand for data centers to other regional economies unless it expands its capacity in an environmentally friendly manner. The city-state recently lifted a three-year pause on new data center projects but imposed stricter green standards. However, the allocated capacity cap of 60 megawatts per year is deemed insufficient to meet the strong demand. 

While Singapore still accounts for 60% of Southeast Asia’s total data center capacity, neighbouring countries like Malaysia and Indonesia have benefited from Singapore’s pause on new projects. Keppel has been expanding its data center portfolio since 2000, operating 32 facilities across the Asia-Pacific region and Europe. However, the industry’s high energy consumption and sustainability concerns pose challenges, especially in Singapore, where data centers consume over 7% of the city-state’s electricity due to the need for extensive cooling in the hot and humid climate.

Keppel estimates that Singapore’s total capacity demand will exceed 3 gigawatts by 2030, suggesting an increase in the capacity to at least 1 gigawatt. The company also proposes the development of a data center park called Datapark+, utilizing spare shipping docks and a green energy grid powered by hydrogen.