Digital revolution is at hand

National University of Singapore's Energy Studies Institute executive director Prof Lee Poh Seng says Malaysia would benefit from the digital revolution if it adopted a strategic approach that incorporates lessons from Singapore and prioritises innovative, sustainable practices.

MALAYSIA is at the heart of digital transformation as demand for data centres (DCs) surges, reflecting a broader global trend. DCs are essential digital infrastructure as cloud computing, big data, and artificial intelligence (AI) become integral to business and governance.

However, due to their high resource requirements and environmental impacts, Malaysia must approach its expansion of DC capacity with meticulous planning and foresight. Singapore's recent experiences provide valuable lessons on managing this growth sustainably and responsibly, offering Malaysia a reassuring model.

The Singaporean government’s decision to impose a moratorium on new DC projects between 2019 and 2022 was driven by concerns over significant energy use and environmental degradation. This break allowed for a strategic reassessment and stimulated innovation towards achieving greener and more efficient DC operations.

Critical developments during this period included the introduction of strict energy efficiency standards and increased integration of renewable energy sources. With these measures in place, Singapore lifted the moratorium, offering a robust model for balancing technological growth with environmental care.

Singapore's geographical and resource limitations have restricted its capacity to accommodate the growing number of DCs, leading investors to explore other options. Malaysia's larger land and energy resources make it an appealing alternative for DC operations.

As a result of this situation, Malaysia has both unique opportunities and a profound responsibility to ensure that DC expansion is managed sustainably, aligning closely with national infrastructure and environmental goals. The importance of this dual role cannot be overstated.

DCs pose compelling sustainability challenges due to their need for significant amounts of electricity and water, especially for cooling systems. By adopting some of Singapore's innovative approaches, such as sustainable cooling technologies that minimise environmental impact and the strategic use of recycled water, Malaysia will be able to address these challenges.

These practices not only conserve precious resources but also pave the way for the sustainable growth of the nation’s DC industry.

Malaysia's tropical climate poses additional challenges for DC operations, primarily due to higher ambient temperatures and humidity, increasing cooling requirements. The increased energy consumption in this scenario requires adopting state-of-the-art cooling technologies and designing energy-efficient DCs.

As such, the deployment of adaptive and intelligent cooling systems could be particularly beneficial, enhancing the operational efficiency of DCs.

As DCs expand, substantial capital investment and technological infrastructure improvements typically generate significant economic benefits.

However, this expansion can also lead to increased demand for electricity, potentially straining the national grid and leading to higher energy prices. To achieve long-term sustainability, DC growth needs to be carefully considered and aligned with Malaysia's energy policies and carbon reduction goals.

Malaysia can develop a robust regulatory framework that promotes high standards of operational efficiency and sustainability for DCs by looking to mature markets like Singapore.

Malaysia can gain a competitive position in the global DC market by imposing rigorous energy efficiency requirements, conducting regular environmental impact assessments, and incentivising the adoption of green technologies.

DCs' direct economic impacts are generally positive, but to sustain these benefits over the long term, an ecosystem supporting local enterprises and technological advancement is needed.

Developing a domestic supply chain for DC equipment and services industries and fostering technological innovation can create jobs and stimulate local economies, thus amplifying the economic benefits of the DC industry.

Emerging technologies such as AI-driven optimisation, liquid cooling and advanced heat recovery systems are promising approaches to making DCs more environment-friendly.

It is essential that Malaysia invests in research and development as well as collaborates with academic institutions and technology companies in order to promote the adoption of these innovations, thereby improving the sustainability of its DC infrastructure.

As Malaysia contemplates expanding its DC infrastructure, its digital and environmental futures will be shaped by today's decisions. Malaysia would benefit from the digital revolution if it adopted a strategic approach that incorporates lessons from Singapore and prioritises innovative, sustainable practices.

As a result, stakeholders from government, industry and academia must collaborate to build a sustainable and resilient DC ecosystem. As Malaysia embraces these challenges as opportunities for innovation and leadership, it can position itself at the forefront of global digital infrastructure development.

This article first appeared in Star Biz7 weekly edition.

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