ASEAN Digital Growth vs. Energy Goals

ASEAN Digital Growth and Energy Challenges

ASEAN’s rapid digital expansion is reshaping the region, but it is also straining energy systems and challenging climate goals. As data centres and cloud computing drive technological growth, the demand for electricity is surging, raising concerns about emissions and the reliance on fossil fuels.

The International Energy Agency (IEA) projects that Southeast Asia’s data centre electricity use will nearly double by 2030 compared to 2024. This growth highlights the urgent need for energy efficiency and clean energy solutions to support sustainable digital development.

The Role of Data Centres in ASEAN’s Digital Growth

Data centres are becoming critical infrastructure for ASEAN’s digital economy. The six major ASEAN economies—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam—are emerging as data centre hotspots, with approximately 2.9 GW of capacity in development. However, most of these data centres rely on power grids dominated by fossil fuels, posing a significant challenge for tech companies aiming to meet renewable energy targets.

By 2030, data centres could account for 2–30% of national electricity demand in these countries, excluding Viet Nam. This increase in demand will strain power sectors already grappling with decarbonisation efforts, underscoring the need for sustainable energy solutions.

Emissions and Environmental Impact

The growth of data centres is expected to drive a sharp rise in emissions. Malaysia, for instance, is projected to see a sevenfold increase in emissions from data centres by 2030, reaching 40 MtCO2e from 5.9 MtCO2e in 2024. Indonesia and the Philippines are also expected to experience significant emissions growth, with Indonesia’s data centre emissions quadrupling and the Philippines’ rising 14-fold by 2030.

The reliance on coal and gas for powering data centres is a major contributor to these emissions. In Malaysia, data centre growth could lead to a substantial increase in power demand, reaching 68 TWh by 2030 from 9 TWh in 2024. This growth highlights the urgent need for clean energy solutions to mitigate the environmental impact of digital expansion.

Sustainable Solutions for ASEAN’s Data Centres

To balance digital growth with sustainability, ASEAN countries must prioritise renewable energy and energy efficiency. Approximately 30% of data centre electricity demand in 2030 could be met with wind and solar energy through existing grids, even without battery storage. However, battery storage will remain critical for meeting long-term electricity demands.

Expanding procurement options, such as virtual Power Purchase Agreements (PPAs) and green tariffs, can make renewable energy more accessible and affordable for smaller data centre companies. These options can improve access to solar and wind energy while supporting the adoption of storage solutions alongside intermittent renewables.

Supportive policies are essential for driving sustainable data centre growth. Beyond Renewable Energy Certificates, PPAs are a preferred method for large tech companies to secure stable renewable energy supplies with long-term agreements. By making corporate PPAs more accessible, governments can drive indirect investments in renewables and support the transition to clean energy.

Collaboration for a Sustainable Future

Collaboration between governments and the tech industry is crucial for achieving sustainable digital growth. Setting clear efficiency goals, strengthening national frameworks, and providing targeted incentives can accelerate the adoption of renewable energy and energy-efficient practices in data centres.

ASEAN’s digital growth presents both opportunities and challenges. By prioritising renewable energy, energy efficiency, and strong policies, the region can ensure that data centres drive sustainable digital growth while supporting the global energy transition.