Asia Pacific is poised to become the world’s next major hub for data centre development, with about US$800 billion ($1.02 trillion) expected to be invested in the sector across the region by 2030.
While the rapid growth brings significant economic opportunity, Deloitte’s 75-page Powering Asia Pacific’s data centre boom: Unlocking sector growth report warns that uncoordinated expansion risks worsening grid congestion and energy price volatility in the region.
Data centres are now foundational to Asia Pacific’s digital economies, says Deloitte; they underpin cloud services, communications, e-commerce and artificial intelligence (AI) while creating substantial new electricity demand at a time when energy systems are already under strain.
Energy demand poses new challenges
Asia Pacific is already home to major data centre hubs in China, Japan and Singapore, notes Deloitte. Other markets such as Australia, India and Malaysia are rapidly attracting major new investment as demand for storage, analytics and processing accelerates, adds the report.
The sector’s rapid growth is an important opportunity for the region in the decade ahead, but it also comes with significant challenges. Chief among these is meeting the huge additional energy demand needed to power new data centres.
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Deloitte’s analysis projects data centres could account for 2.3% of regional electricity consumption by 2030, the highest share outside of North America.
Under a high digital adoption scenario, electricity consumption from data centres in the region is projected to increase by more than fivefold from under 200 terawatt-hours (TWh) in 2025 to over 1,000 TWh by the mid-2030s.
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At the same time, overall electricity demand in Asia Pacific is projected to increase by nearly 50% between 2024 and 2035 as economies expand and households and businesses switch from liquid fossil fuels to electrons, according to Deloitte.
According to the International Energy Agency’s Southeast Asia Energy Outlook 2024 report, electricity is projected to increase from 20% of the region’s final energy consumption in 2023 to 45% by 2050 as a result.
Hence, energy supply is increasingly becoming one of the most immediate concerns for data centre developers. Grid connection delays are now becoming more common as government and systems operators grapple with surging electricity demand. “Governments across the region are scrambling to augment the energy generation, transmission and distribution infrastructure necessary to support this transition,” notes Deloitte.
‘Power-first’ approach to development
To address these challenges, Deloitte recommends that developers adopt a “power-first” approach when planning new data centre projects.
Under this approach, energy sourcing should be considered from the earliest stages of project design, shaping decisions such as location, site selection and capacity alongside other commercial drivers.
This means designing grid-boosting clean energy into new projects and precincts as a core pillar of success.
“Asia Pacific is at a tipping point,” says Will Symons, Deloitte Asia Pacific sustainability leader. “AI, cloud and digital connectivity [are] surging, driving massive new investments in energy-intensive data centres. Across the region, electricity grids are already under pressure to decarbonise and maintain affordability, resilience and security. Taking a power-first approach with clean energy is critical to power new data centres, accelerate decarbonisation and underpin continued economic growth.”
Clean energy at the centre of strategy
Deloitte’s analysis indicates that clean energy projects can be deployed faster than conventional fuel alternatives. The price of clean energy components has also fallen significantly in recent years, as major manufacturers — particularly in China — have expanded production capacity.
Falling solar and battery costs, together with supply constraints for new gas-fired power plants, are accelerating the shift towards renewable energy across the region.
This presents opportunities for data centre operators to support the clean energy transition, says Deloitte.
Leading operators are already demonstrating that clean energy strategies can address these risks while strengthening the business case for new facilities. These strategies can improve cost visibility, reduce exposure to fuel price volatility and meet rising customer, investor and regulatory expectations.
However, the report highlights that achieving this will require a multi-stakeholder approach across the data centre and energy ecosystem, including developers and operators, governments, energy providers, asset owners, investors and major customers.
Commenting on the report’s findings, K Ganesan Kolan De Velu, sustainability & emerging assurance leader, Deloitte Southeast Asia, says: “Southeast Asia is emerging as a key frontier for data centre growth, driven by rising digital demand and increasing investments in energy and infrastructure. By matching digital expansion with clean, reliable power systems, we can unlock a model for sustainable growth that strengthens competitiveness and accelerates decarbonisation across Asia Pacific.”
