This raises the question: Can the region's renewable energy capacity expand fast enough to meet growing demand and achieve net-zero targets?
Data center capacity in the Asia-Pacific region is expected to double by 2028, according to a Moody's report released last month.
According to the report, emerging data center markets such as India, Indonesia, Malaysia, Thailand and the Philippines will register capacity growth of 29-48 percent by 2025 due to smaller existing capacity.
Aerial view of a small solar power plant in Puchong, Malaysia. Photo: Shutterstock
New entrants to the market are likely to tap non-renewable energy sources to meet data centers' massive power demands, introducing new carbon transition risks, the report said.
This does not bode well for a region that still meets most of its energy needs with fossil fuels such as coal, gas and diesel.
While there may be an obvious temptation for many countries to switch to relatively clean energy sources such as natural gas, climate activists say it is far from an ideal solution as it would still lead to increased emissions and continued reliance on fossil fuels.
So can anything be done to mitigate these data-driven emissions?
Some countries, such as Australia and Singapore, mandate that new data center capacity must adhere to certain guidelines to minimize emissions.
Singapore ended its data center moratorium in January 2022 but has indicated that domestic data centers will need to meet energy efficiency guidelines, which will likely lead to long-term high demand for renewable energy.
While the pace of data localization may vary from country to country, it is likely that many countries in the region will follow Singapore's lead.
But renewable energy is by nature intermittent, posing a challenge for data centers, which need a constant supply of steady, reliable energy, and power grids in many parts of the region are not yet fully equipped to integrate large amounts of renewable energy, experts say.
Despite the challenges, various innovative solutions, such as energy storage technologies for renewable energy, hold promise for mitigating the challenges.
A China Mobile data center in southwest China's Guizhou province. Photo: Xinhua
Governments could also invest in hybrid energy solutions that combine renewable energy with fossil fuel generation, and in modernizing the power grid.
The region is blessed with abundant sunlight, wind and a long coastline, giving it great potential for generating renewable energy.
India, China, Japan and Australia have steadily expanded their renewable energy capacity through policies to reduce carbon emissions.
“It varies from country to country, but overall several countries in the region are well positioned to make this happen,” said Carlos Torres Dias, head of gas and electricity markets research at Rystad Energy.
He added that China is likely to expand its solar and wind capacity this year, which could replace some of its coal-fired generation, but India will remain reliant on coal in the short term as electricity demand exceeds renewable generation.
“Countries need to set clear targets for renewable energy capacity and give the right incentives to developers,” Dias said, adding that developers need clear market rules and mechanisms to ensure the profitability of their projects.
Vineet Mittal, chairman of Indian renewable energy company Avada Group, also expressed optimism that renewable energy will account for a larger share of the energy burden created by AI-driven technologies.
“While the expansion of energy-intensive data centers may lead to increased fossil fuel consumption, there are also significant opportunities in the Asia-Pacific region to further integrate renewable energy sources,” Mittal said.
AI has the potential to power a range of everyday tasks, from education to financial services, and enable access to remote communities. But its use must be clearly aligned with climate goals, or the cure could end up being worse than the disease.
