How Data Centres can Operate Sustainably in Urban Areas
As digital transformation accelerates globally, the environmental impact of data centre infrastructure has become a growing concern for governments, operators and investors alike.
In Singapore in particular, where data centres account for about 7% of total electricity consumption, authorities took the unprecedented step of imposing a moratorium on new facilities in 2019.
A study published in Nature by npj examines the aftermath of this decision and offers insights into how the industry can navigate the complex balance between supporting digital economic growth and meeting sustainability targets.
“Singapore’s experience offers useful insights for existing and emerging DC hubs in other parts of the world,” the report reads. “Its advanced research, industry and investor networks
provide an ideal testing ground for energy efficiency and equipment longevity solutions that could be deployed in the wider region.”
How the data centre market in Singapore has changed
Singapore hosts 93 data centres with a total capacity exceeding 1000MW, making it the leading data centre hub in the Asia-Pacific (APAC) region and the third largest globally, despite its limited land area.
The research by npj highlights how Singapore’s position as Southeast Asia’s data centre hub came under pressure due to physical constraints limiting expansion. For one thing, the government imposed a ban on new data centres in 2019, citing energy consumption and carbon emissions concerns.
When the moratorium was lifted in 2022, authorities then implemented new building requirements including achieving a design Power Usage Effectiveness (PUE) of 1.3 or below, obtaining Platinum certification under Singapore’s Green Mark for Data Centre criteria and providing evidence of a clear pathway to achieving 100% renewable energy.
“The Green Mark standard mainly focuses on energy usage as an indicator of sustainability. This focus on operational efficiency still overlooks deeper issues such as excessive data use and the uncurbed demand for data centre services,” the report says. It also identifies a regulatory gap regarding the lack of guidance for retrofitting existing “brownfield” assets with 15-20 years of remaining lifespan.
The study also points out that these restrictions have pushed some operators to relocate planned developments to neighbouring jurisdictions with fewer restrictions, such as Johor Bahru in Malaysia or Batam in Indonesia.
It says: “This potentially displaces environmental costs to other locations while services are provided to clients in Singapore and regionally and undermines the intended benefits of more stringent regulatory standards that only apply to certain jurisdictions.”
Building and operating in a tropical climate
Additionally, the report identifies specific challenges for data centres operating in tropical climates like Singapore’s, where high temperatures and humidity have the potential to reduce equipment lifespan and limit efficiency measures that might be available in temperate regions.
“Tropical data centres are reliant on air, water, or liquid cooling to mediate the temperature of data centre equipment, rendering tropical data centres significantly less energy efficient,” the report states.
To combat this, The Singapore Infocomm Media Development Authority (IMDA) has introduced guidelines for tropical data centres to support a transition towards 24-31 degrees Celsius ambient temperature – significantly higher than the current industry practice of 18-22 degrees.
While this met initial resistance from data centre operators in the region, citing safety concerns, government-backed guidelines and growing evidence of safety at higher temperatures are now actually encouraging adoption.
The report notes that collaboration between government and industry is preferable to establish subsidised training programmes. In the case of Singapore, the country has data centre engineering training from the Institute of Technical Education and Microsoft's Data Centre Academy.
However, it cautions that “the fruits of these efforts could only be assessed in a few years' time when inaugural graduate cohorts enter the labour market.”
An urgent need for reliable renewables
Intensive energy demand continues to be the most significant challenge for the data centre industry, as they are forced to confront environmental impact. According to the report, data centre electricity consumption could increase fifteen-fold by 2030 and end up accounting for 8% of global energy demand.
Currently in Singapore, access to renewable energy presents a significant barrier to decarbonising energy sources across the region. Due to land scarcity, building sufficient solar panels and hydrogen plants to support growing energy needs remains unfeasible.
Likewise, the absence of a reliable renewable energy import pipeline from neighbouring Southeast Asian countries means Singapore’s data centres rely almost entirely on the country’s natural gas-based grid.
Some operators offset their energy consumption through renewable energy certificates (RECs) and virtual power purchase agreements (VPPAs), but the report criticises their effectiveness: “RECs can be sold separately to the physical delivery of electricity (otherwise known as an ‘unbundled REC’) so a customer can buy a REC associated with energy use on a different electricity grid.
“In this case, there is no guarantee that the renewable energy was consumed or that any additional renewable energy capacity was built to match the demand.”
As a result, the researchers call for Singapore to “invest technologically, financially and diplomatically into developing an ASEAN renewable energy power grid to enable the import of renewable energy produced in other Southeast Asia countries.”
More broadly, the research acknowledges that data centres worldwide remain both water and land intensive, with water usage posing great environmental strain on water-scarce countries – particularly across Southeast Asia.
It notes: “Governments must strategise and communicate the ideal balance of data centre growth to support economic competitiveness while balancing environmental commitments and social welfare for their local and national contexts.”
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