Is Singapore doing enough in the data centre race?

In a move that surprised the data centre industry at large, the Singapore Infocomm Media Development Authority (IMDA) on May 30 this year announced the allocation of more capacity for data centres in Singapore.

Instead of relatively small allotments annually, the newly unveiled Green Data Centre Roadmap aims to provide at least 300 MW of additional capacity in the “near term” to the industry in Singapore.

In addition, the roadmap promises additional data centre capacity on top of the 300 MW if proposals meet more stringent green energy criteria.

But in a world enamoured with generative AI (GenAI) and where everyone is racing to build huge “hyperscale” data centres that tip the scale at 100MW or more per campus, is 300MW even remotely adequate? Or is it too little, too late?

Capturing opportunities through managed growth

As expected, the Green Data Centre Roadmap generated a substantial amount of interest in Singapore and abroad, particularly after a lengthy moratorium on new builds from 2019 to 2022. But observers are cautious, and at least one consultancy and services firm published its conclusion that the move won’t draw large-scale data centre investments.

Yet those who fixate solely on capacity miss the point: The Green Data Centre Roadmap is not about turning Singapore into a destination for ever larger hyperscale facilities or transforming it into an artificial intelligence (AI) training hub.

As a small island state with limited ability to generate renewable energy, Singapore’s Achilles heel in the era of sustainability is its carbon emissions.

Cutting-edge AI training today requires many thousands of GPUs (graphics processing units) running at full tilt for weeks at a time. Even if the AI and technology giants, which predominantly hail from North America, Europe, and China, were to ignore sovereignty considerations and do their AI training in Singapore, there isn’t much point in serving as the “factory” for AI training. Singapore wants AI talent and know-how, but not its outsized carbon footprint.

Seen in this context, the move is about capturing strategic opportunities in the digital realm that might otherwise bypass Singapore. According to Cushman & Wakefield, Singapore had a data centre vacancy rate of just 1.65 per cent last year, the lowest of all tracked cities globally. The idea is to send a strong message to the industry to help Singapore capture the right opportunities in the digital sphere through managed data centre growth.

Building greener data centres

As Singapore carefully opens the door to more data centres, why not leverage it to move the needle on sustainability? Or better yet, foster the growth of a new sustainability-centric data centre ecosystem?

This is where things get interesting.

In his speech at the launch of Google’s fourth data centre in June, Senior Minister of State Dr Janil Puthucheary shed some light on the government’s strategy: “This challenge [of sustainability] is not unique to Singapore; eventually, all of us, wherever we are in the world, are going to be faced with these constraints.

“Because of who we are, we are determined to turn these constraints into [opportunities] to innovate and capture value from the growth of sustainable data centres.”

Of course, this cannot happen with regulation alone but through a skilful combination of policies, accreditation programmes, and incentive schemes spanning multiple government agencies. And by dangling a carrot of more data centre capacity to incentivise stakeholders to build data centres differently.

In a nutshell, Singapore wants to enhance data centre efficiency by moving beyond tired - and limited - approaches such as the use of NEWater or installing some solar panels on the rooftops of data centres. As outlined in the roadmap, it wants to jumpstart a reinvigorated approach by building an ecosystem biased towards incorporating efficiency across the entire digital stack.

Punching above its weight

Achieving this vision won’t be easy, given the multiple challenges around sustainability and energy efficiency to be tackled. Crucially, is 300MW adequate to spark the change that Singapore needs?

This writer’s off-the-record conversations with industry stakeholders and even government officials seem to indicate that there are concerns that the amount isn’t enough to make a difference.

Yet Singapore must start somewhere, and 300MW is significantly more than the 20MW allocated to each of the four winners of the pilot Data Centre – Call for Application (DC-CFA) last year.

As Singapore seeks to change its approach to data centres and move beyond raw capacity to go further up the value chain, there is a final consideration in the proposed Johor-Singapore Special Economic Zone (SEZ) to boost the cross-border flow of goods and people between Singapore and Johor.

Could Singapore and Johor cooperate in digital infrastructure in a way that ensures the combined impact is far greater than the sum of its parts? Certainly, there is hope for that, as evidenced by the presence of Singapore's Senior Minister of State for Trade and Industry and Culture, Community and Youth, Low Yen Ling, at the July groundbreaking of the upcoming TM-Nxera data centre in Johor.

Singapore has a track record of punching above its weight, leveraging its unique strengths and skilful execution to overcome sometimes-crippling odds.

In this case, can the combination of its mature data centre landscape, an expected special economic zone (SEZ), and a focus on sustainability help Singapore successfully redraw the boundaries of what's possible with data centres? Only time will tell.

The author writes about technology and its impact on Singapore and Southeast Asia for GovInsider.