Singapore Confirms Data Centre Permit Process Will Kick Off in Q2

A Singaporean official has confirmed that regulators will start accepting applications for development of new data centre next quarter as part of a pilot program to reopen the city to development of new server facilities after a hiatus of more than two years.

Janil Puthucheary, senior minister for communications and information said last week that Singapore’s Infocomm Media Development Authority (IMDA) and the Economic Development Board (EDB) will open the application process with the regulators prioritising plans which employ “best-in-class techniques, technologies and practices” on efficient power use.

“Singapore is committed to fulfilling our environmental obligations under the 2015 Paris Agreement, and greener data centres will allow us to do so, while at the same time supporting the growing needs of our digital economy,” Puthucheary said in a speech. “The Call for Application will be launched by the second quarter of 2022.”

With the application period drawing near, industry players are calling on regulators to be more transparent on how they will evaluate bids so that developers and operators can plan their strategies and quickly meet growing demand for data services in Asia’s most wired island.

On a Power Diet

The announcement of the application schedule comes two months after regulators revealed in a meeting with industry players that they will approve construction of no more than three new data centres with a total IT load of not more than 60 megawatts over an interval expected to last 12 to 18 months, as authorities attempt to keep a lid on power consumption.

Preliminary guidelines introduced at the time indicated that new facilities should have 10 to 30 megawatts of capacity each while achieving a power usage effectiveness (PUE) ratio – a metric that measures the energy efficiency of a facility – of not more than 1.3.

“Data centres power many applications and services for businesses and everyday life, from complex data management to e-commerce transactions,” the Singapore official said. “However, data centres are intensive users of water and electricity. Given our resource constraints, we need to manage the development of data centres sustainably.”

Providing the industry with a clearer timeline is a welcome move but the deadline for bid submissions may prove challenging for some contenders, according to James Murphy, managing director for Asia Pacific at industry data provider DC Byte. Murphy pointed out that the regulators have still not provided clear guidelines on how bids will be evaluated and other details also remain to be clarified.

Seeking Transparency

Murphy said the most pressing concern for players is whether the IMDA and EDB will allow co-location providers and hyperscalers to form consortiums enter joint bids – an approach which he contends to provide the maximum capacity from the limited number of permits to be awarded.

“In that way, the hyperscalers are happy because they still get the capacity they require, the data centre operators are happy because they are getting additional capacity which they can sell and make a profit on, and the government is happy because they’ll collect higher tax revenues from a company making more money.”

Co-location providers like US-based Equinix and Singapore’s Keppel Data Centres rent out space, equipment and bandwidth to firms in need of data storage, while hyperscalers – which includes tech giants Amazon, Google, and Microsoft – provide public cloud platforms and are usually looking for rack space with huge capacity.

The data centre permit process paves the way for the reopening of a market that has been shunning new facilities since the government imposed a moratorium on data centre development in 2019. Despite that ban, Singapore was still recognized this year as the top performing data centre market in Asia Pacific and the second globally after northern Virginia, in a Cushman & Wakefield report released last month.

As of last year there were over 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.

Southeast Asia Surge

Singapore-based operators have been busy expanding throughout Southeast Asia over the past year with projects expanding into emerging markets such as the Philippines and Malaysia.

In the past four months, three Singaporean operators announced projects in the Philippines with ST Telemedia’s digital infrastructure unit being the latest to do so with its unveiling of a $350 million joint venture with local firms Globe and Ayala earlier this month.

The ST Telemedia deal followed SpaceDC’s announcement last month of a plan to set up a 72 megawatt hyperscale campus in east of Manila, and Digital Edge revealing plans in December for a 10MW data centre outside of Manila in Laguna.

In Malaysia, Bridge Data Centres said in December that it has started work on a 100 MW hyperscale data centre campus in the southern state of Johor.