Mr Speaker
Countries and corporations all around the world are scrambling to meet AI-driven hunger for data centre capacity. Yet, this arms race compromises our ability to meet our climate targets despite the expectation that long-term global temperatures would rise by over 1.5 degrees relative to pre-industrial levels within the next few years, falling way short of our collective goal to keep global warming beneath this threshold.
During the debate on the Motion for our Future Economy tabled by my Workers’ Party colleagues in July, I noted how our economic strategy has to centre on societal flourishing and environmental sustainability. Likewise, the Government’s approach to data centre development should always lean towards our people and planet.
While the sustainability and resource-efficiency requirements for data centres instituted in this Bill are a step forward, Singapore must lead by example in driving sustainable, responsible, and people-centric technological growth.
This does not mean being anti-growth or anti-data centres. Instead, our approach to data centres prioritises our people’s needs, mitigates socio-ecological impact of data centre development, and boosts transparency regarding the emissions profile of data centres. We should also always be cognisant of how our these policies have an impact beyond our shores.
Data centres’ toll on our natural resources
Data centres, wherever they are located, take a sizeable toll on electricity and water grids. When data centres roll into town, neighbouring communities can see their electricity and water supplies disrupted while utility bills skyrocket. Energy and water requirements are even worse for data centres located in hot, tropical regions such as Singapore, and require more cooling relative to centres located in cooler climes.
44% of experts surveyed by the Sustainable Energy Association of Singapore (SEAS) in this year’s State of Energy Transition survey believed that data centre growth would lead to increased pressure on energy supply and infrastructure, while another 31% felt that there would be a greater demand for energy storage and grid upgrades. Even with our 2019 pause on new data centre construction, EMA data show that our electricity consumption by the Information and Communications sector – which includes data centres – more than doubled from 2019 to 2024,.
We also have to consider who pays the bill for the required upgrades to our grid to accommodate this anticipated new load. EMA’s electricity tariff structure indicates that any additional expenditure on grid upgrades is borne by the customer under the non-fuel component of the electricity tariff. This would be on top of price variations triggered by fluctuations in fuel costs, such as price increases arising from geopolitical conflicts.
According to the reply to a Parliamentary Question I filed earlier this year, the Government launched the DC-CFA2 exercise after assessing that the supply of electricity and other resources could support the added data centre capacity without compromising other needs. I hope that any future data centre capacity would be introduced only if our grid infrastructure can support the additional energy usage comfortably, and that the cost of upgrades required – if any – should not be borne by consumers.
Could the Minister also clarify how specifically is our green energy supply able to meet this projected additional demand, given that the recent DC-CFA2 exercise stipulates that 50% of a data centre’s energy needs must be supplied via green avenues.
SEAS also cites obstacles such as current energy procurement mechanisms being ill-suited to the needs of low-carbon energy, lack of industry expertise in structuring power purchase agreements (PPAs), difficulties faced by data centre operators in securing early access to green energy sources, and the nascency of regional low-carbon energy projects. Concerns have also arisen regarding the availability of low-carbon energy sources to power the planned Jurong Island green data centre park. Also, with imported power projected to form a significant portion of our green energy supply, I asked back in January last year about the measures instituted by the government to address potential pricing and supply shocks. As clean energy is currently commercially bound by fragmented Power Purchase Agreements between importers and consumers, would the government consider establishing a central procurement agency for low-carbon energy to strengthen their bargaining power and leverage economies of scale?
Data centres are also thirsty for water. A large AI data centre uses roughly 1.28 billion litres a year for cooling, and the UN projects that by 2030, AI data centres worldwide will consume as much water as 1.3 billion people use daily.
In Singapore, the PUB expects our national water consumption to almost double by 2065, with two-thirds of the increase expected to come from non-domestic consumption. While we now have our four taps programme, the reality is that Singapore’s water resilience depends on costly, energy-intensive sources. Given this, I asked in May this year how such growth might strain our water supplies, especially with the Water Agreement with Malaysia expiring in 2061 and higher energy prices from the Middle East crisis raising the cost of energy-intensive desalination. The minister’s reply stated that the government plans water infrastructure ahead of demand, but I was unable to get any further specifics. Even so, I hope any future data centre developments will take full account of the fragility of our limited water resources.
Data centre operators already meet the PUB’s water efficiency benchmark of 2.1 cubic metres per megawatt-hour, compared against the 2.2 cubic metres per megawatt-hour in 2021. IMDA’s Green DC Roadmap seeks to reduce it to below 2.0 within ten years. What has been our progress, and will operators’ water efficiency be publicly reported?
Besides water and electricity, data centres also take up large swathes of what is truly one of our scarcest resources: land. Every plot we allocate to data centres is space that could have gone to housing, parks, greenery or community spaces. And when we run out of space, we clear more forest or reclaim more land from the sea. Indeed, low-carbon energy generation was announced to be the impetus for the Western Island project.
With the Urban Heat Island effect contributing to our concrete jungle warming twice as fast compared with the rest of the world, we must directly look at how data centre construction contributes to this problem. Data centres emit a lot of heat, owing to cooling systems pumping out hot air from the equipment into the atmosphere, with studies measuring higher temperatures up to 500 metres downwind of a data centre.
We should thus require EIAs to be conducted prior to key data centre construction which factor in the potential heat and noise emitted from the data centre, as well as the climatological impact of such developments and any associated loss of biodiversity. A mitigation plan to alleviate its environmental impact must also be developed. Similar to how Scotland mandated EIAs to be conducted for data centres with capacities above 50 megawatts, we must likewise institute this requirement for any proposed new data centres above a certain capacity.
While data centres in Singapore are largely clustered around industrial areas, there are some, such as those located in Defu and Jurong West, that are near residential neighbourhoods. While Clause 25 of the bill allows the Government to refuse to award a licence if it goes against the public’s interest, we need more information about how it determines whether a development is in the public’s interest?
These are issues that those of us living in Singapore need greater clarity on. In view of our recent experiences in engaging with concerned residents over the decision to develop Maju forest and Gilman Barracks, how can we more meaningfully engage the public in decisions made about data centre developments? How will the government meaningfully take feedback into account in the final decision on whether and where to build our data centres?
Boosting transparency
Transparency is key to sustainable and responsible data centre development. Clause 36 of the Bill requires licensees to regularly report their compliance with the provisions under this Bill and the conditions of their licences. What metrics must operators report under this clause?
Notably, it appears that operators are not required to publicly report such data. While there may be concerns about commercial secrecy, the existential nature of our climate goals means that we have to tilt the scales more in favour of closer monitoring of our energy consumption attributable to data centres. We would not be alone in doing this. The European Union’s Energy Efficiency Directive requires data centre operators to report metrics such as their water and power consumption to a common public database, which allows the public to keep track of data centres’ consumption of our shared planetary resources.
Just like we mandate listed companies and large non-listed companies to publicly report carbon emissions, requiring disclosures such as water consumption, energy needs and noise pollution should be considered.
Our obligations as international citizens
Mr Speaker, while the remit of this Bill focuses on data centre operations in Singapore, climate change is a global concern, and the impact of our actions would naturally be felt beyond our borders.
High demand for data centre space in Singapore – driven by our status as a major financial and technological hub – has resulted in spillover effects in the surrounding Johor region and Riau Islands. While undoubtedly boosting economic opportunities, reports have also started to emerge about disruption to the lives of local communities and ecosystems.
Johor, in particular, has grown into a major data centre market in its own right, coming in third in Asia-Pacific, behind Tokyo and Singapore, with live IT capacity of 1,110 Megawatts. Yet, these data centres – a significant portion of which serve Singapore-based business operations – have also resulted in increased strain on Johor’s electricity grid, and is projected to account for approximately 40% of the state’s total electricity demand by 2035. This has also adversely affected local communities, with residents near data centres in Johor reporting lower water pressures, and noise and dust pollution from data centre construction. Such disruptions to daily life have even spurred angry residents to protest against such data centre projects.
In Indonesia, with data centre capacity nascent relative to Singapore and Johor, we see many green industry projects, including some aimed at exporting up to 3.4 gigawatts of low-carbon electricity to Singapore, sufficient to power approximately 595,000 households annually. Despite what seems like spare capacity, there are still households who are not connected to the local grid relying on diesel generators for electricity. Industrial developments have also resulted in the displacement of local communities. For instance, over 800 households were forcibly removed from their homes for the construction of Sembcorp’s Tembesi industrial park, while the risk of relocation lingers over the residents of Dapur Tiga due to plans to build a Renewable Energy & Smart-Eco Industrial Park on the site.
Even as we strive to protect our land and natural resources to meet our own climate obligations, we have to be aware of the impact on neighbouring communities. Our policies must also be sensitive to how we affect the lives and livelihoods of those living beyond our shores.
When it comes to the approval of clean energy imports, does the EMA consider how the power-generation infrastructure would affect the surrounding community and environment, and is there the space for us to render technical assistance to mitigate any untoward impacts of such projects?
Singapore has a global footprint in the data centre industry. In addition to having the highest proportion of data centre capacity in both Johor and Batam at 37% and 62% respectively, Singapore-based data centre operators are present as far afield as Europe and Australia. Prominent operators such as DayOne and Bridge Data Centres are headquartered here, while Temasek Holdings backs several operators such as Ascendas, Mapletree, ST Telemedia, Nxera and Keppel. Temasek was also part of a consortium that purchased AI data centre operator Aligned Data Centers for a record $51.8 billion Singapore dollars, while Anthropic is partnering with GIC and Macquarie Asset Management to build AI data centres for the Claude developer.
Can we require Singapore-based data centre operators to report their carbon emissions from their overseas data centre operations, whilst also require government-linked operators to enact sustainability measures for their overseas operations? As many large Singapore-based companies procure compute capacity from regional data centres, could we require such corporations to lease from operators who implement sustainable practices, similar to the principles under France’s Duty of Vigilance Law?
Conclusion
Mr Speaker, amidst our climate emergency, data centre projects need to sit alongside the urgent need to meet our climate targets.
Calls for the public to exercise individual responsibility by saving electricity and water ring hollow if we allow data centres to guzzle up excessive amounts of energy and water resources. Our already-limited land should also be prioritised for uses that enable human flourishing instead of merely satiating the ever-growing appetite of capital, with data centre projects carried out sensitive to the surrounding environment and communities. We all have a stake in our planet, thus it is important to hold industry to account for carbon emissions and resource consumption in a way that is fair. We should also aim to mitigate the effects that our policies governing data centre construction have beyond our shores.
It would do us a world of harm if the benefits of frontier technologies end up disproportionately and unsustainably line the pockets of hyperscalers, at the very expense of our existence as a planet. If we pride ourselves as a global technological hub, then perhaps it is time to ensure that our policies ensure that advancements in technology are carried out sustainably, with its fruits reaped by the people for society to flourish.
While I support the Bill, I hope that the Minister would consider these points I have raised. Thank you.
