With the rapid development of ICT industries, Singapore has become an attractive location for foreign data center investors to build their data centers. However, Singapore’s land policies and political factors are restricting the growth of the data center market in Singapore. This article will look into some of the factors why can’t Singapore add more data centers in the Future.
Singapore can only build so many data centers.
Singapore is already a very data-centric country. Singapore’s information and communications technology (ICT) sector has grown rapidly since the 1990s, and today comprises the largest sector of the economy. This impressive development was made possible by efficient infrastructure, including reliable power sources, a high-speed Internet backbone, and an excellent telecommunications network.
However, there are limits to how much data center capacity can be added to support this type of growth. Singapore is reaching that capacity limit right now.
Singapore is a small country with 63% of land occupied by housing, and only 38% is left for commercial use. The government is also reluctant to give out the land for non-residential purposes so that more land can be used for housing. With the limited land supply, there is no way to build more data centers in Singapore in the future.
Moreover, Singapore lacks natural resources because it is located in the center of a region with tiny forests and mineral deposits. Water supply also poses a challenge because it has no significant rivers or lakes. It has to import water from Malaysia and desalinate seawater for its water supply.
The country’s limited resources have resulted in a high cost of living and taxes that have forced many multinational companies to relocate their offices from Singapore to other countries with lower labor costs and tax rates. This means that there need to be more jobs for local workers to live comfortably.
Singapore relies on two countries for its electricity.
Singapore depends on two countries for its electricity: Malaysia and Indonesia. In the past, it has successfully used the two countries’ electricity with no problems. However, as Singapore’s electricity demands increase, it will be forced to choose between using its current sources or building additional power plants to provide for its citizens.
Unfortunately for Singapore, neither of these options looks particularly promising. While the country could build more power plants, it needs more natural resources to provide the necessary energy. This is why the government has started looking into alternative energy sources such as wind and solar power. Unfortunately, these alternative sources are likely to contribute significantly less than the natural gas and coal that Singapore currently uses. If this trend continues, Singapore will have to make significant changes to its infrastructure and daily lives if it wants to continue growing economically.
Currently, the Singapore government has built a hydropower project and solar panels, but to fulfill the data center industry alone will take a very long time. This condition is why data center investors in Singapore and other countries should start expanding to Indonesia.
Some Data Center Investors Already Move to Indonesia
Many data center investors are moving to Jakarta and Batam, an island off Singapore’s coast in the Riau Islands Province. Indonesia is one of the most promising countries for IT and data center facilities, but unlike Singapore or Malaysia, it has no tax incentives for data center operators. The companies drawn to the area are banking on its strategic location and proximity to Singapore, which many use as their regional headquarters.
Batam, a former mining hub once dubbed “the city without nightlife,” hopes to revive its economy by constructing a Techno Park, which would serve as a commercial, residential, and entertainment district. According to The Jakarta Post, this development will cost about $4 billion and will house an international school, office park, shopping malls, and hotels.
Data Centre Infrastructure Nongsa Digital Park
Some investors are already looking for opportunities in Indonesia, as the government is planning to build high-speed data centers. The government plans to build 10 digital parks across the country and is currently offering incentives for these high-speed data centers. In addition, current Indonesian President Joko Widodo is pushing for open data and pledging that he will not censor information.
Nongsa Digital Park’s objective is to create an innovative and creative digital industry cluster. The center comprises a business incubator, a science park, and a data center. It aims at nurturing digital industries by providing an attractive environment for digital companies to grow and innovate. The center also aims to create synergy among the digital economy sectors by integrating their resources and assets.
The primary data center is located in Nongsa Digital Park with 8,000 square meters of occupied space and will be built in three phases. The center’s first phase has received the approval of Korea Electric Power Corporation (KEPCO) and will be operational in mid-September 2017 for the first tenants. Phase two is expected to be operational in 2022, while phase three will be operational in 2023.
- Phase 1 will have a total power capacity of 51MW across all three buildings when entirely built out and connected to the grid.
- Phase 2 will double that capacity to 102MW for an aggregate DC power capacity of 103MW.
A global network of top companies selected by global users for their reliability, security, and performance, an energy-efficient green data center based on renewable energy, and a state-of-the-art data center facility are planned to be built in Nongsa Digital Park. The park will become a landmark of the digital age and will lead to the creation of an economic hub in the region.
With the limitations that exist for the construction of a new data center in Singapore, they do not just give up. The Singapore government always cooperates with Indonesia and Malaysia. Currently, to address the problem of energy needs and data center expansion, the Singapore government has collaborated with the Indonesian and Korean governments in building a data center complex in Nongsa, Batam Island.
Batam Island has a direct underwater fiber optic cable connection to Singapore, such as Equinix, SingTel, etc. This infrastructure has become the answer for data center providers in Singapore to expand data centers in Indonesia.
Some data center investors choose to invest in Jakarta as a hub in Indonesia. Especially in Indonesia’s green data center sector, because in Jakarta, gas and geothermal power plants are available.