Multi-layered approach needed to address the energy needs of data centres


There is no escaping the fact that data centre operations are energy-intensive. The labyrinths of machines in these facilities that store, archive and process data consume a lot of energy, about 2 per cent of world electricity according to the United States-based Storage Networking Industry Association. 

The pressure will not ease up soon as more data centres are needed to cope with the exploding global data traffic. By 2022, the annual global Internet traffic will reach 4.8 ZB per year, up from just 1.5 ZB per year in 2017, according to Cisco Visual Networking Index 2017-2022.

Data centres are essential as Singapore pushes ahead with its plans to build a digital economy where data is the new fuel.

New data centres will drive and support the transformation into a truly digital economy and underpin the continued development of Singapore as a financial, advanced manufacturing and research hub.


Digital Economy

A Digital Economy is about addressing different urban challenges in new ways through the use of technology and innovation. Various initiatives have begun. Smart Estates, involving property developers, built environment service providers and tech companies, is a project to enhance, among other things, estate management processes and achieve more efficient use of resources. 

In 5G, an innovation ecosystem is being set up to support 5G technology trials for enterprises. Another project seeks to integrate 5G with technologies such as Internet-of-Things and Artificial Intelligence, enabling businesses to develop next-generation manufacturing solutions.

The government is also reviewing the Electronic Transactions Act to provide legal certainty to electronic transactions including property transactions, Bills of Lading, Electronic Transferable Records and Lasting Powers of Attorney.  This Act is central to Singapore’s position as a hub for electronic transactions.

The Singapore Academy of Law is nurturing a strong corps of Singapore legal tech startups by connecting them with local and international law firms. This could lead to the cross-fertilisation of ideas and knowledge to accelerate globally relevant legal tech solutions that courts, law firms, in-house counsel and other legal professionals can deploy.

Meanwhile, the data centre industry here is growing rapidly. Investments in new data centres frequently grab headlines. As part of Singapore’s foreign direct investments initiative, many multinational companies are attracted to put up their regional data hubs together with their data centres operations here. Moreover, Singapore is free from disasters such as earthquakes, and it also has robust political, financial and legal frameworks which businesses appreciate.

There is good Internet connectivity between the nation-state and the world. Singapore is a hub for the submarine cable network connections from East Asia to South Asia, Persian Gulf, Mediterranean, and Europe regions, and vice versa. As of June 2020, there were 20 submarine cable systems with landings in Singapore1, with a total potential bandwidth capacity of more than 410 Tbps.

As a result, Singapore is a favoured location for data centres. Industry observers indicate that there are about 60 data centres in Singapore providing a total capacity of about 650 megawatts.



The Paris Agreement of 2015 reaffirms the long-term global goal of keeping global warming well below 2oC above pre-industrial levels. As a signatory to this Agreement, Singapore pledged to reduce Emissions Intensity (EI) – the volume of greenhouse gases (GHGs) emitted per dollar GDP – by 36 per cent from 2005 levels by 2030, and to stabilise emissions to peak around 2030.

Data centres are essential to the Singapore economy. Since data centres are acknowledged to be a big user of energy, SGTech proposes to work with the government to study how Singapore can comply with its stated goal to reduce energy use and carbon emission while providing a sustainable growth path for data centres.

Broadly there are three key issues to consider. 

Firstly, Singapore’s carbon footprint includes all those digital services that are consumed within our shores and beyond. Since Singapore is a regional data hub for many multinational corporations (MNCs), their local offices are accessing the data centres from other countries and thus are “consuming” energy. This “offshore” consumption and emission counts in domestic measurements for carbon footprint, yet Singapore also yields the economic benefits of serving as a hub for data centres.

Secondly, while data centres contribute to emissions, the Economic Value Added – to put it simply, the jobs created and revenue generated in the local economy - is not confined only to the data centre sector. The data centre ecosystem is vast, including services provided by many parties including data centre consultants; legal firms; electrical, civil, structural and mechanical engineering specialists; and the companies involved in building new facilities like architects, construction contractors, quantity surveyors and financial consultants.

Thirdly, the vibrant data centre ecosystem in Singapore also attracts related direct investment, further boosting the local economy. For example, multinational companies which provide equipment and consultancy for data centres have set up regional operations here and invested in R&D activities.  Cloud services are an enabler for Singapore’s Smart Nation Vision. Government and business access to the most innovative services such as AI and data analytics depend on cloud services and growth of the data centre ecosystem.


Next Steps

Any strategy for data centre growth would have to consider these issues. SGTech recommends that it is imperative to consult the data centre and ICT industries in reviewing and developing policies for the allocation and optimal use of resources to ensure the sustainable growth of data centres and EVA contribution to Singapore’s economy.


SGTech is prepared to work with the government and the data centre industry to:

  1. Push for the adoption of carbon-neutral solutions to power data centres, such as using hydrogen (green or blue), solar solutions and others. By partnering innovative companies and operators, data centres can help Singapore reduce its carbon footprint. To this end, SGTech will work with the relevant agencies and organisations such as EMA, NEA, SPPG to develop solutions to reduce the carbon emission from the electricity system.
    The core issue is that data centre providers have no control over the way the power they consume is generated. Data centre operators are at the mercy of the power generation companies strategies to reduce their emissions. This is true for all power consumers - residential and industrial - in Singapore.
  2. Push data centres to become efficient. The Green Mark Scheme is a great example that encourages the adoption of energy-efficient design, operation and management of data centres. Operators of energy-inefficient data centres need to upgrade their facilities and refresh their infrastructure. Financial incentives, coupled with regulation, can nudge the operators in the right direction.
  3. Drive towards improving the efficiency of cooling systems supporting data centres. Where cooling is concerned, financial incentives and regulations would make a compelling package to drive the desired outcome. Equipment vendors, operators and customers must work together towards “warmer” data centres, where the ambient temperature is sufficient for the equipment to work under a sustainable period of operation, to reduce energy consumption.
  4. Support research to improve energy efficiency and improvement in PUE (Power Usage Effectiveness). For example, as we drive towards warmer DCs, one measure that may be useful for future target-setting could be the estimated PUE improvement for every 1-degree increase in temperature in the DC.
  5. While PUE should be the primary measure of building energy efficiency, workload-centric metrics could help present a more complete and accurate energy efficiency picture. PUE measures the power efficiency of infrastructure without regard to the efficiency of servers nor the workload processed by the DCs. Workload metrics, such as compute intensity and server efficiency, may provide a more accurate reflection of how effective a DC is at delivering a quantum of IT services to customers, per unit of energy consumption.
  6. Support expansion of energy supply options to include renewable energy and cross border development of renewable power. Expanding investment opportunities for renewable energy will not only reduce carbon emissions but will also help Singapore leapfrog its energy supply constraints. Aside from improving the energy efficiency of DCs or the allocation of existing energy supply, expanding energy supply options to include renewable energy through fuel cells and cross border development of renewable power is instrumental to ensuring the sustainable growth of DCs in Singapore.
  7. With Singapore's lack of buildable space, building vertically and on sites with limited access will become the norm going forward. Design for Manufacturing and Assembly (DfMA) is a key pillar of Singapore’s Construction Industry Transformation Map (ITM). As of 2019, the Built Environment sector has achieved a 31% DfMA adoption rate (in terms of Gross Floor Area) and is on track to reach the target of 40% this year. By 2025, BCA aims to raise the adoption rate to 70%. With the above in mind, we should ensure future data centres continue to play an active role in Singapore's Construction ITM. This could be achieved by continuing to be early adopters of innovative DfMA and prefabrication solutions that are sustainable, carbon-neutral, recyclable and future proof.

For Singapore, the solutions to reduce carbon emissions need to be long term and highly effective. With limited land capacity and an energy sector that relies on fuel imports, a multi-layered approach is required to address the energy needs of new data centre developments and the inefficient legacy facilities.



SGTech's Data Centre Committee brings together the members of Singapore's data centre ecosystem to take on opportunities and challenges specific to the industry. The members include the data centre operators and service providers, data centre equipment vendors, solution providers and consultants, among others. 

Please contact if you’d like to find out more about the committee.




Published Sep 2020