The rapid growth of digital data generated by various sources including social media, e-commerce, enterprise applications, and IoT devices has fueled the demand for data processing and storage. Further amplified by technological advancements such as AI, machine learning, and big data analytics to name a few, require considerable storage capacity and computational power. As a result of the escalating demand, there is a surge in sustainable energy sources.
The APAC (Asia-Pacific) region has posed itself as the fastest-growing hub for global data centres. According to the Moodyโs Ratings study quoted by the Economic Times, on Wednesday, approximately $564 billion investment is projected to bolster the expected 20% annual growth rate through 2028. At the same time, this expansion has to face basic challenges such as water intensity and high energy requirements to process data centre operations.
As per the rating agency, the APAC data centre capacity is estimated to reach about 24,800 megawatts, over and above doubling the capacity of more than 10,500 MW currently. Also, APAC will create approximately 30% of worldwide capacity expansion in the next five years.
A strong pipeline of more than 4,400 MW is under construction in pivotal APAC markets, with 75% in China, India, Australia, and Japan. Most of them are expected to be completed in 2024-25.
โData center capacity in APAC and globally will expand rapidly over the next five years, as the increasing adoption of artificial intelligence (AI) and cloud technologies, cryptocurrencies, and a rising preference for outsourcing data computing and storage for efficiency and scalability fuel exponential growth in the sector,โ said the report.
The agency also noted geopolitical tensions prompting a change in data centre capacities to other APAC economies from China. The stimulation is driven by data sovereignty concerns and the countryโs local regulatory mandates demanding data storage within the country or specific facilities.
Cybersecurity and environmental standards are strict, as countries like Singapore and Australia are setting stringent standards related to data centre operations. For example, Singapore has mandated that the facilities meet energy efficiency guidelines.
As businesses and individuals rely more on data-driven services, the need for robust data centres has intensified and is forecasted to leave a significant impact on the utility sector, increasing the demand for electricity and requiring network capacity enhancements to handle the escalated burden.
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