The power demand of the data center is the operation of the equipment and the cooling of the computer room. AI is more computationally intensive and uses more electricity than traditional data centers. The International Energy Agency (IEA) estimated in January that power demand for data centers worldwide could more than double by 2026. A paper published in 2023 by data scientist Alex DeVries estimated that by 2027, the global power consumption of AI servers could be comparable to that of medium-sized economies such as the Philippines or Sweden.
The International Energy Agency estimates that power demand for data centers worldwide could more than double by 2026. Source: Business Insider
According to a forecast by the Central Research Institute of Electric Power in Japan, the electricity consumption of data centers in Japan will increase to 105 TWh by 2040, equivalent to five times that of 2021, and this figure will further rise to 211 TWh by 2050. IDC Japan, a consulting firm, predicts that the total investment of Japanese data center operators may exceed 500 billion yen this year, an increase of 50% from last year, and such a large level of investment is expected to remain until 2027.
Japan is preparing to update its basic energy policy by March next year. Japan is expected to present its energy mix projections for 2040 for the first time. Decarbonizing the power sector is key if Tokyo is to meet its commitment to reduce greenhouse gas emissions by 46% by FY2030 from FY2013 and achieve net-zero emissions by 2050.
In the 12 months to March 2022, Japan's greenhouse gas emissions fell by 23% from fiscal 2013 levels. However, CO2 emissions per unit of electricity generated remained the same, indicating that the promotion of renewable energy and other clean energy sources is insufficient. Japan still generates 73% of its electricity from fossil fuels. Japan aims to increase the proportion of renewable energy, but the expansion of renewable energy production is hindered by geographical location, grid constraints, etc.
South Korea faces similar challenges. The country is heavily dependent on imported fossil fuels and is working to build renewable energy capacity. The number of data centers in the country is expected to increase significantly as local and global technology companies such as Naver, Kakao, and Equinix set up their own data centers to meet the growing demand for AI computing.
According to South Korean government data, South Korea is expected to have 732 data centers by 2029, a five-fold increase from 2022. Cushman & Wakefield, a commercial real estate firm, said demand for data centres is growing across Asia. Singapore's operating capacity is expected to exceed 1 gigawatt this year, while the markets in Tokyo and Mumbai are expected to exceed 2 gigawatts in the next five to seven years. The agency added that the Malaysian state of Johor is experiencing a "spillover" of data center supply from neighbouring Singapore.
According to a Wall Street Journal report titled "Renewables can't keep up with growth, means more coal and more emissions," India is the epitome of this challenge. India plans to more than triple its renewable energy installations in the next six years, but this growth has not kept pace with demand, so it has to rely on coal to make up the gap.
The report quoted Milivirta, a senior fellow at the Asia Society Policy Institute, as saying that with the large-scale construction of renewable energy last year, China has indeed crossed an important threshold — that the growth of renewables has exceeded the long-term growth in electricity demand. China is trying to address the reliability of renewable energy through grid upgrades, batteries, and hydropower. The goal is to achieve green development while keeping electricity prices low.
Alex, head of power research at Wood Mackenzie Asia Pacific, said: "If China can do it, other markets such as India and Southeast Asia can replicate this model. ”