Here is some food for thought: Singapore has a mature data centre market, is on-track to roll out 5G by 2025, and aspires to be a globally-renowned tech and connectivity hub.
There are over 5,000 US companies (Microsoft, Facebook), not to mention companies from China and other countries based on the island. In 2018, the Singapore Economic Development Board reported that 80 of the top 100 tech firms in the world have a presence in Singapore, which reinforces the country’s position as a major east-west trading centre and gateway to the APAC region.
Further, the rapid growth in Singapore’s demand for data-related services is unparalleled across other regions. One might expect that data centre companies would have bright investment prospects in Singapore.
Yet, there seems to be a certain uneasiness in the minds of data centre companies in the country.
It is related to their uncertainty about the growth of data centres going forward, considering the conditions imposed by the Singapore government. This is the burning question in everyone’s mind.
Sustainability Push
In 2019, Singapore had embarked on a review of the data centre industry and imposed a “moratorium” on the building of new data centres. The country has been mulling a more sustainable approach for the growth of data centres and some industry watchers say that the country is in the forefront when it comes to sustainability.
Singapore’s Trade and Industry Minister Gan Kim Yong has publicly stated that the review was necessary due to data centres being intensive users of resources. One of the reasons for this is the amount of energy used by data centres is putting a strain on existing power grids.
In Singapore, Data Centres account for 7 per cent of the total electricity consumption (3.4TWH) in 2020 and this percentage is estimated to increase to 12 per cent by 2030. Data centres form the backbone of a booming digital economy around the world, which have increased multi-fold since the onset of the COVID-19 pandemic. Everything from the servers, storage equipment and cooling infrastructures have a large appetite for electricity and water.
In other words- Singapore is being very careful with the way it manages its land and its energy requirements. In January, this year the government lifted the moratorium and allowed construction of new facilities in the country.
Minister for Trade and Industry (MTI) Gan Kim Yong fired a warning shot when he said that the government has completed its industry review of the data centre sector and decided to be “more selective” regarding new digital infrastructure to be built in the city. According to industry sources, the government is planning to open up the data centre market some time this year, with some conditions.
“There is a possibility that the data centres will be capped at 5MW and the PUE will be set at 1.3 or lower,” said an industry source. As of last year, the country has more than 70 operational data centres with a total IT capacity of about 1,000 megawatts.
Currently, around 70 data centres operate in Singapore with a total power capacity of 1,000 megawatts. MTI, which has yet to publish detailed guidelines, said it is reaching out to industry players for feedback and further input on the updated policy.
Meeting Climate Change Requirements
The trade minister explained that the industry undertaken in 2019 was crucial in helping the government devise a system that will allow the sector to grow in a sustainable manner while ensuring that Singapore is on track to meet its commitments to climate change mitigation. The government, along with other stakeholders have come up with some certain prerequisites, it is learnt from reliable sources.
For starters, applications for new data centres will commence from second quarter of 2022. The application criteria will include innovation and sustainability, said a source in the know. Further, up to 3 applications will be approved during this pilot phase with capacity ranging from 10-30 MW.
Even as the moratorium has been lifted, how does the industry view these prerequisites? Click on the link for preliminary insights on the industry.
“Moratorium and its effects on infrastructure and expansion of the DC market in Singapore and beyond” is a panel discussion which will be held at the upcoming Singapore Cloud & Datacenter Convention held at Marina Bay Sands, on July 21 2022.
Speakers Eugene Seo (Managing Director, CapitaLand), Royce Wee (Public Policy Practitioner, Alibaba Group), and Wong Ka Vin (CEO, Data Center First), will lead an in-depth discussion on the moratorium’s implications for Singapore’s data centre industry. Register for the convention now!
