Singapore, October 18, 2024 – Data centres are the backbone of Southeast Asia’s digital economy, supporting critical infrastructure for finance, e-commerce, and social platforms. As artificial intelligence (AI) advances and digital services expand, these facilities face growing operational pressures. Southeast Asia’s data centre market is projected to grow from $10.23 billion in 2023 to $17.73 billion by 2029, creating an urgent need for efficiency, scalability, and sustainability.
At the forefront of addressing these challenges are CFOs, who play a critical role in balancing rising energy demands with the need for financial efficiency. With AI applications driving power densities as high as 30 to 50 kVAs per rack, data centres are being pushed to their limits in terms of cooling and energy consumption. CFOs must make strategic decisions today to ensure both short-term savings and long-term value.
Maximising ROI on Data Centre Investments
Southeast Asia’s tropical climate presents unique challenges for data centre operations, where high temperatures and humidity lead to higher energy consumption. Cooling alone can account for 40% or more of a data centre’s total energy use, making energy-efficient solutions critical for controlling operational costs.
Traditional air-cooling systems, long used in data centres, are becoming less efficient as demands grow. These systems require substantial upfront investments in HVAC systems and are energy-intensive to operate, driving up electricity costs in tropical regions like Southeast Asia. They also pose challenges in terms of maintenance and scalability as cooling needs increase.
Liquid cooling offers a transformative alternative. It works by circulating dielectric fluid directly across heat-generating components, significantly improving thermal management. Unlike air cooling, liquid cooling reduces energy consumption and eliminates the need for large infrastructure, leading to further cost savings in construction, operation, and maintenance. Liquid cooling is key to managing the high-performance servers required for modern AI applications while improving both energy efficiency and scalability.
In addition to improving energy efficiency, CFOs should consider regional opportunities. For instance, Malaysia offers lower electricity tariffs—33.7 sen per kWh, compared to 51 sen per kWh (THB3.99) in Thailand and RM1.11 (S$0.3247) per kWh in Singapore. By selecting markets with favourable energy costs and adopting advanced technologies like liquid cooling, CFOs can significantly lower operational expenses while enhancing efficiency.
However, CFOs must resist the incrementalist model—sticking to familiar technologies may seem safe, but it often hinders innovation. By adopting liquid cooling and other cutting-edge technologies, CFOs can unlock long-term benefits and position their data centres to meet the rising demands of AI and sustainability standards.
Sustainability as a Profit Driver
Sustainability is no longer just a regulatory requirement—it has become a key driver of business performance. Governments across Southeast Asia are promoting greener digital infrastructure through tax breaks, grants, and subsidies aimed at encouraging companies to adopt energy-efficient technologies in their data centres.
One example of sustainable technology is liquid cooling, which eliminates the need for large water resources—crucial in resource-scarce regions like Singapore. By reducing the energy required for cooling and eliminating water usage, liquid cooling aligns with regional sustainability goals. CFOs can also leverage government initiatives such as Singapore’s Green Data Centre Roadmap or Indonesia’s Green Data Standard 2024 to reduce energy costs and ensure compliance with increasingly stringent regulations.
Renewable energy integration is another strategic investment that benefits both the environment and the bottom line. For instance, a Cibitung data centre in Indonesia now uses biomass-sourced energy, reducing reliance on traditional grid electricity. Similarly, companies like Banpu NEXT are driving renewable energy projects in Thailand and Vietnam, contributing 30MW to 50MW of renewable power capacity, respectively.
CFOs who embed sustainability into their core strategies can reduce costs, drive efficiency, and position their companies as leaders in environmental stewardship. And thanks to innovative solutions like liquid cooling they can achieve both financial and sustainability goals.
The Role of CFOs in Future-Proofing Data Centres
CFOs must ensure that data centres are not only efficient today but also resilient to future challenges. With rising energy demands, climate risks, and evolving technology needs, CFOs must prioritise scalable, future-proof infrastructure that can meet both current and future business requirements.
Liquid cooling offers a clear solution by reducing energy consumption, improving thermal management, and eliminating the need for water usage—critical in water-scarce markets. CFOs can also establish strategic partnerships with technology providers, governments, and energy companies to access tax incentives, grants, and the latest data centre innovations.
Given that data centres operate 24/7, especially in high-demand markets like Southeast Asia, CFOs must ensure that their facilities are scalable, energy-efficient, and resilient to external shocks such as rising energy costs and climate-related risks. Advanced power management systems that optimise power delivery and minimise waste will play a crucial role in future-proofing data centres.
CFOs as Champions of Change
In Southeast Asia’s rapidly growing digital economy, CFOs have the opportunity to shape the future by ensuring that data centres are both financially sustainable and operationally resilient. The adoption of liquid cooling, renewable energy, and government incentives can create lasting value for their companies.
Energy-efficient cooling, advanced power management, and renewable energy integration are not just operational enhancements—they are strategic investments that CFOs can leverage to build future-proof data centres. By taking proactive steps to lead these changes, CFOs can position their companies to thrive in an era where sustainability, efficiency, and innovation are the key drivers of success.
Author: Jason Low, Regional Head, APAC, Iceotope
