New data centres are on the way in Singapore, the government revealed late last week, but not very many and only under tight efficiency guidelines, according to information provided by regulators to data centre industry players in an online meeting.
The closed-door session on 27 January shared criteria from Singapore’s Economic Development Board (EDB) and Infocomm Media Development Authority (IMDA) for data centre operators to apply for a new pilot program which will issue permits for development of the first new server facilities to be built in the country since a moratorium was put in place in early 2019, according to James Murphy, managing director for Asia Pacific at industry data provider DC Byte, who was briefed on the discussion by attendees at the video conference.
Setting standards for efficient use of energy and other resources, the pilot program, which officially kicked off with the meeting last week, could last 12 to 18 months according to official estimates. In the next phase, the government will begin reviewing applications in the second quarter of this year, before approving no more than three new developments of up to 30 megawatts each, with the total new capacity to be added not to exceed 60 megawatts in total, Murphy told Mingtiandi on Monday.
“There is a need to find a way to manage the growth of data centres in a sustainable manner consistent with our climate change commitments,” a spokesperson for the EDB and IMDA told Mingtiandi in an email. “We are seeking feedback from the industry on the proposed criteria that was presented during the discussion. More details will be announced in the coming months.”
While the pilot program, which was laid out after the government had confirmed the reopening earlier this month, opens the door to new projects, only the efficient will find the gateway open, and few will pass through.
The government is requiring any projects proposed to achieve a power usage effectiveness (PUE) – a metric that measures the energy efficiency of a facility – of at least 1.3, along with other efficiency requirements that have yet to be finalized.
The kickoff meeting was explained as a call for application exercise, as well as an opportunity for regulators to gather feedback before they start processing applications in the second quarter. The results of the application process are expected to be announced during the fourth quarter, Murphy said.
‘Suboptimal’ Power Capacity
Since news on the moratorium lifting began surfacing at the start of the year, operators have already begun airing their concerns regarding the low ceiling that the new program places on power capacity with experts pointing to demand from hyperscalers like tech giants such as Facebook, Google and Microsoft as examples of the capacity required to meet growing demand from 5G and cloud service providers.
“I think some of the operators will find the 10-30MW size suboptimal. I believe a number of operators would be willing to build 50MW+ facilities,” Murphy said. “However, it’s better than nothing and I think the subscriptions will still be oversupplied.”
The proposed criteria require operators to obtain a Platinum Certification under the Green Mark for Data Centres sustainability standards established by the IMDA and the Building and Construction Authority, to make sure that the facilities use advanced technology and limit their carbon footprints.
Operators also need to obtain approvals for resource allocation from additional state agencies, including for the land plots they use. Those that “maximize strategic value” for the state and “elevate its sustainability outcomes” will be prioritized.
As of last year there were 70 data centres operating in Southeast Asia’s wealthiest nation with a total power capacity of 1,000 megawatts. These server hosting facilities were responsible for about 7 percent of the country’s total power consumption in 2020, up from 5.3 percent a year earlier, based on public data.
DC Byte’s Murphy said that despite the moratorium, Singapore, as a key hub for Internet firms in Asia Pacific, still has more live capacity than India and, with 88 percent occupancy in its existing data centres, has one of the lowest vacancy rates in the world, with demand already on the rise.
Facebook, which uses Singapore as a regional hub in Asia Pacific, started building a $1 billion data centre facility in Jurong East in 2018 with that facility planned to have an eventual capacity of 150 megawatts. In 2020, Google broke ground on its third data centre facility in Singapore, bringing its total investment in server facilities in the country to an estimated $850 million.
With demand for cloud services ramping up, Murphy noted that the majority of new developments across Tier 1 APAC markets such as Tokyo, Singapore, Sydney and Hong Kong are designed with a capacity of over 30 megawatts.
Regional Tech Hub
With Singapore’s popularity as an online infrastructure hub, the government instituted the data centre moratorium three years ago to control use of electricity, water and other resources. The authorities are making clear that the new trial program aims to foster Singapore’s growth as an infrastructure hub while controlling resource and environmental risks.
“We intend to be more selective of the data centres we can accommodate. In particular, we seek to anchor data centres that are best in class in terms of resource efficiency, which can contribute towards Singapore’s economic and strategic objectives,” government regulators reiterated in their response over the weekend.
A report released this month by Cushman & Wakefield ranked Singapore as the top data centre market in Asia Pacific and second globally after northern Virginia in terms of size, connectivity, power costs and other indicators.
Amid the continued surge in demand for IT space, APAC is projected to become the biggest data centre region in the world in terms of capacity over the next decade according to the same report.