Singapore and Data centres — Love me, love me not?
News passed under the radar but Singapore decided to “pause” the deployment/upsizing of datacenter-focused programmes in the country.
It seems to mean little but actually, for someone like me working in tech startups and hardware circular economy, that’s quite a big statement, as well as for the industry and for Singapore’s strategy in the short term (long too actually).
Let’s start with the basics, what are we talking about?
A booming industry in a booming area
Data centres are the backbone of what we call the “infrastructures” of our daily digital habits. Infrastructures are made of all these hardware needed for data transfer. Think about cables, “wifi boxes” and stuff.
Among infrastructures, data centres are the devices processing, transfering and reallocating data in a way. Without them, say goodbye to emails, social networks and Netflix! They do not have to be local, as in the country where data is transferred. Say, if you are a user in Java, Indonesia, you do not need a datacenter next to your house. Most data centres are remote for our usages, and that’s why it is considered as one big globalised industry.
As online is still on a booming trend — as you can see below (see the full marvellous report here), infrastructures need to be more robust to support this growth.
That can sound surprising but Singapore, despite its size, is the most popular place in SEA to build large scale data centres, and arguably one of the best in APAC. That’s not the topic here, but many reasons can explain such popularity; proximity with other countries, strategic geographical location, pool of tech skills, business-friendly ecosystem, tech-focused long term strategy stated by the government, …
As a consequence, most major hardware and data centre companies have facilities here; Equinix, Digital Realty, Global Switch, Singtel (big player in SEA), …
Now, some numbers for you to understand the impact of these hidden gold mines in Singapore:
- It is estimated that data centres use 1 to 1.2% of electricity generated worldwide. All online activities represented 4% in 2019 (equivalent to aviation industry pre-Covid!)
- This ratio is expected to double by 2025–2026
- 7% of the electricity created in Singapore is used to power data centres (Ministry of Trade and Industry).
- 60+ data centres already exist in Singapore
A glimpse at these new projects
Over the last couple years, Singapore government allowed the development of 14 new data centres for a total capacity of 768 Megawatts. That is way more than the period 2014–2019 with 12 new data centres and a total IT capacity of 307 Megawatts (government data here)
Among these big projects, there were Facebook, Alibaba, Zoom and Google planning to deploy their next state-of-the art data centres in Singapore for 2022/2023. Let’s take Facebook’s next data centre as an example to asses the impact of such project in the local ecosystem:
- 1.4 billion USD involved
- 11 storeys for a 170,000 sq. m size
- 1,200 jobs (estimated 2/3 relocated, 1/3 new hires)
On a side note, Google’s new Singapore data centre involved 850 million USD.
Also, based on the big data centre players stated above, most of them are planning to deploy new facilities here; Equinix and Digital Realty for instance
New data centre projects is important for Singapore to be the digital tech leader they want to be in the long shot. I am sure you already heard something like “data is king” or “the one who owns data owns the XXIst century gold”. This is partially true, being a tech big fish involves owning and generate data.
A decision to stall for time and go greener?
Now it is time to understand why Singapore decided to postpone such programmes. On a pure economic standpoint, this decision is surprising to say the least. Hosting new data centres create jobs, attract tech talents and companies, levels up the tech maturity of a country,…
Actually, the answer is crystal clear: Environment.
On the written reply to PQ related to new data centres, there is no space for misunderstanding. Mr Chua Kheng Wee Louis’s reply insists on several aspects that seem important to note:
- Data centres are using a lot of energy
This is true, datacenter do use a lot of energy. But careful, if their consumption increased by 6% over the last decade, their workload increased by 550%. Compared with the service they deliver, data centres actually not using so much energy. And they are energy-saving focused. R&D work on efficient datacenter technologies can bring so much benefits to the manufacturer that this parameter is key for innovation in the sector.
- Data centres in tropical climates is not an easy thing to do
And this is an understatement. However, Singapore is working on finding solutions to make data centres deployment a sustainable thing; free cooling, enhanced architectures, energy saving systems, … See Keppel’s example . With Keppel, Singapore government is also investigating into liquefied hydrogen to power their data centres (I would be curious to see how this goes).
- Strive for quality, not quantity
This must have sounded bad for a lot of new data centre projects leaders. It seems Singapore decided to be more picky to reconciliation environment and tech innovation. However, the exact criteria for such pickier choices are unknown at the moment (but I have my idea…!)
In the end, Singapore decided to put environment on the top of their priority list. And most importantly, to try to combine both sustainability and innovation.
Now, what’s next?
I, personally think, Singapore have other priorities at the moment and postponing these projects is just stalling for time. If Singapore want to be the tech leader they want to be, data centre projects remain strategic and the government knows that for sure.
However, I really like that Singapore want to include environment concerns within their technology and industrial strategy. It is not perfect but that’s an excellent way to start. Scaling up data centres all the way without having a proper, deeper thought about the long-shot makes no sense. Data for the sake of data is not the best approach and that’s heartwarming to see governments leveraging technologies with a reasonable sustainable approach.
So Singapore and data centres, love me. But love me under sustainable conditions? I like this actually !
