Renewable energy – solar and wind – could supply 30% of data centre electricity demand, without requiring battery storage, across Southeast Asia by the end of the decade, provided the right mix of policies, infrastructure investment and market access is in place, according to a recent report.

As six Association of Southeast Asian Nations ( Asean ) economies – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam –  emerge as global data centre hubs, their collective pipeline includes 2.9 gigawatts of new capacity, finds the report by independent energy think-tank Ember.

However, rapid digital expansion is adding pressure to fossil fuel-heavy power grids in the region and could derail energy transition efforts if not carefully managed.

Malaysia is flagged as a key hotspot by the report, which states that the country’s data centre electricity demand is forecast to jump from 9 terrawatt hours in 2024 to 68 in 2030, more than Singapore’s total power use in 2023. Associated emissions could soar to 40 million tonnes of carbon dioxide equivalent, a sevenfold increase, making it the region’s highest emitter.

As a result, immediate action is needed, the report stresses. Scaling renewables, improving energy efficiency and creating national frameworks for data centres are essential to keep emissions in check. Smaller data centre operators, in particular, need access to flexible procurement tools like virtual power purchase agreements and green tariffs.

Energy efficiency remains a powerful lever. National design standards and grid-friendly practices could significantly cut electricity use and ease infrastructure strain.

However, without coordinated action, the report warns, data centre growth could lock Asean into higher fossil fuel use for years to come. But with the right steps, it could instead become a driver of green digital growth.

“Governments and industry should work together to align data centre expansion with the energy transition,” says Shabrina Nadhila, Ember’s energy analyst for Asia. “National frameworks, stronger collaboration and better transparency are critical to ensuring that Asean’s digital growth also drives progress.”

“Data centre growth is straining power systems in Asean, where most electricity still comes from coal and gas,” adds Pritesh Swamy, Cushman & Wakefield’s head of data centre research and insights for Asia-Pacific. “Scaling up renewables and modernizing infrastructure through proactive investment and regional collaboration is key to ensuring sustainable growth and advancing the energy transition.”