Data centres threaten clean energy supply

This will potentially leave other sectors unable to secure affordable clean power.

Data centres to ‘suck up all clean energy’ as the sector is willing to pay a premium to meet its clean energy targets, according to experts.

Whilst national and regional frameworks are being developed, Camillus Yang, Managing Director and CFO of aNew Energy, said during a panel session at the Asian Power Summit 2025 held in Singapore, that the sector is currently the primary driver, or ‘needle mover’, for the adoption of clean energy and new frameworks.

“This will potentially leave other sectors unable to secure affordable clean power until the overall ecosystem can scale up to reduce costs,” Yang said.

He also noted that the sector attracts massive global investment ($1t to $1.5t) and makes better margins, allowing them to pay a premium for the levelised cost of energy.

Moreover, Ralph Dixon, Executive Director of Sustainability for YTL Group and CEO of YTL-SV Carbon, said the sector is driving the need for massive energy storage systems.

“Globally, the estimated deployment of energy storage systems is around 22 gigawatts in the coming years,” Dixon said.

Singapore, specifically, is developing low-carbon data centre parks and is targeting substantial capacity additions—at least 300 megawatts in the near term, with another 200 MW for green energy operators.

“To meet demands, it requires national policy and effective ASEAN Power Grid operation, currently stalled by the lack of regional harmonisation in tariffs, subsidies and grid codes,” he said.

Further adding to the challenge of scaling renewable energy is the sector currently hitting a "solar plateau" because existing grid systems are struggling to accommodate the high growth rate of variable renewable energy (RE), according to Liming Qiao, CEO and Founder of Future Energy Storage & System Integration Alliance.

“This signifies a focus on system readiness and flexibility,” Qiao said. To systematically deploy large-scale energy storage systems, she said stakeholders must adopt a ‘road-to-market’ framework.

Firms must establish high-level, national targets in power development plans, implement all necessary policies for a project to move, and address finance and supply chain issues.

“This includes ensuring banks correctly assess industry risk and leveraging trade bodies to minimise the risk premium are crucial steps for lowering the cost of capital,” Qiao said.

She notes that there is a time-sensitive window where high-premium customers, such as data centres, will initially drive the technology's scale.

“The faster the industry can deploy and achieve scale, the quicker the costs will come down to a level that is tolerable for other, less cost-tolerant sectors,” she said.

The key missing element right now, Qiao observed, is the coordination needed for unified, consolidated, and targeted policy requests to governments to make the most of this window.