With the increase in internet users in Indonesia (the 4th most in the world), Indonesia needs more green data centers for a better environmental future. Data centers consume much electrical energy, and reducing carbon emissions should be the goal of establishing a data center.
Indonesia needs more green data center buildings to reduce carbon emissions.
Indonesia is the biggest country in ASEAN, with a population of over 250 million people, and it also has one of the fastest-growing economies. However, Indonesia is facing increasing challenges in terms of energy consumption due to its rapid economic growth, especially in data centers. Today, most data centers in Indonesia are still built based on the traditional design that requires much power.
The number of Internet users in Indonesia has reached 205 million users in 2022. Unfortunately, almost all data centers in Indonesia still use electricity from fossil fuels. Fortunately, the Indonesian government has signed a commitment to supply electricity from cleaner energy sources to the data center industry in Indonesia, thereby reducing the data center’s carbon footprint by up to 50%.
Especially after the COVID-19 pandemic, when all Indonesian people were required to work and study from home, internet usage increased dramatically.
The latest development, Amazon, has started to build a solar plant with a capacity of 120 megawatts in Indonesia. There is an interesting phenomenon here, several green data centers in Indonesia in a short time have been fully booked based on the information we got.
This proves that Indonesia’s demand for green data centers is relatively high. Especially amid the energy crisis in Europe, companies are looking for disaster recovery centers that are more cost-friendly. As we know, the cost of electricity in Europe per megawatt reached USD 400/MWh, and now it has fallen to USD 200/MWh. Meanwhile, in Indonesia, the cost of electricity is still below USD 100/MWh.
Thus, investing in green data centers in Indonesia is very attractive, and there is no need to doubt it from investors who wish to fund an eco-friendly development project in Indonesia.
Green data centers will help business to save their cost at the same time, increase ROI
Green data center has been a hot topic in the last few years, and the development of the IT industry is getting faster and faster; for that, the green data center should be more critical.
Here are some facts about green data centers:
- Green data centers can reduce carbon dioxide emissions by up to 95% of the total consumption based on traditional data centers.
- Green data centers save up to 90% of water consumption compared to traditional data centers through free cooling systems, recycling systems, heat recovery systems, and other measures to reduce water consumption.
- Green data centers can also reduce up to 65% of total energy consumption.
- Governments and enterprises should set up green data centers in their country.
The world data center market continues to increase, and so does Indonesia. In the future, this market will be dominated by green data centers. Morally, people will prefer green data centers even though the costs are slightly more expensive than conventional data centers. We can see this shift with the increase in the global green data center market with a CAGR of 16% (2020 to 2030).
We are sure that in the future, all data centers in the world will be more efficient and use electricity that comes from cleaner energy to renewable energy. GreenexDC has also implemented plans and designs for eco-friendly power plants. We are preparing this to aim for net-zero emissions in 2050.
Especially for Indonesia, as we explained above, green data centers can quickly reach full occupancy. Thus, this will accelerate ROI. Green data centers already operating in Indonesia still need to be sufficient.
How much data center capacity does Indonesia need?
The average internet usage in Indonesia is 14.4 GB per month (Open Signal). This number increased by 22% from 11.8 GB in 2020 to 8.5 GB in 2019.
Average Internet Data Usage Growth in Indonesia
|Year||Usage in GB||Growth|
The average internet usage in Indonesia is 14.4 GB per month (Open Signal). This number increased by 22% from 11.8 GB in 2020 to 8.5 GB in 2019. This means that in 2022 the average monthly internet data usage in Indonesia will increase by 30%, namely 18.8 GB / user/month.
In 2023, internet users in Indonesia are predicted to reach more than 80% of the total population or around 210 million internet users. This means there will be a need for data usage of 4 million Terra Bytes. Of course, this would require 333,333 server and storage units. The cost of electricity needed is more than 350 MW/h per month.
Currently, data center capacity in Indonesia has reached around 250 MWh. 120 MWh from data centers that are members of the Indonesian Data Center Organizer Association (IDRO), and the rest are data centers that are non-IDPRO members.
At least, Indonesia needs an additional data center capacity of more than 100 MW to meet the needs of internet users in Indonesia. This amount does not include the demand for corporate use and colocation or DRC users from outside Indonesia. Indonesia will likely need more than ten green data centers in the future.
Data Center Investment Growth in Indonesia
The development of data center investment in Indonesia has increased from previous years. The COVID-19 pandemic made data center operators, data center real estate investors, governments, and venture capitalists aware that digital nomads are a new normal that requires data centers.
Sebelumnya, Google, Amazon, Azure, Alibaba dan Tencent telah berinvestasi data center dengan jumlah fantastis di Indonesia. Jumlah investasi data center di Indonesia terus berkembang. Berikut beberapa investasi data center Indonesia di tahun 2022:
- Equinix USD 74 (2022)
- Nongsa Digital Park USD 1.5 Billion (2022)
- Bersama Digital USD 610M (2022)
And there are many more data center investment plans to come in Indonesia. The challenge for the data center industry is not market size but efficiency and sustainability. This is why the Indonesian government is moving quickly to meet the data center industry’s electricity needs with cleaner energy.
Currently, the Indonesian government plans to close all coal power plants gradually. The power plant will be replaced with LNG, Geothermal, and Nuclear while preparing a renewable energy power plant to achieve net-zero emission in 2050. This commitment was strengthened at the G-20 Conference in Bali at the end of November 2022.
Data Center Providers in Indonesia can ease the burden on users in Europe and the United States.
Green data centers in Indonesia can not only reduce the risk of climate change. They can help users in Europe and the United States who are experiencing problems with rising electricity costs. By stabilizing colocation costs, the data center industry in Indonesia has contributed to reducing the inflation rate economically.
Of course, we want European countries to refrain from secretly returning to using electricity from coal-fired power plants. If that happens, global warming will not decrease but worsen. To strive for climate and environmental improvements, international cooperation is needed.
Indonesia has abundant geothermal, nuclear, and liquid gas reserves for the next 800 years. At least until 2030, it is still safe to use green data centers in Indonesia with a carbon footprint that has decreased by 50% compared to data centers that still use coal electricity.
Countries must take this step with many data centers. Like Singapore, of course, they will fill the data center park in Nongsa while waiting for the construction of a solar plant that takes dozens of years to build before it can operate.
Indonesia is a country that has been rapidly developing, but with new technology comes new challenges. The government has a lot of potentials to be one of the major IT players in the region, but it’s becoming more difficult because of how much electricity data centers are using.
Indonesia’s total power consumption is growing at an annual rate of 6.5% and continues to be the main concern for Indonesia’s economy. The government has been trying to fix it by lowering the subsidies for electricity prices, but according to Google Indonesia’s head of infrastructure Aditya Agrawal, “these actions still aren’t enough.”
The challenge for Indonesia is that many companies like Google, who have been working with the country’s IT sector for years, tend to locate their data centers there because it’s cheap and easy to get permits. But what happens when these companies start facing problems with their sustainability?
Indonesia has become the world data center investment target in the last three years. This momentum can be a consideration for data center investors in making decisions. Especially in investing in green data centers, investors can make it happen immediately.
For the needs of internet users in Indonesia, at least ten additional data centers are needed from 2023 to 2024. All data centers in Indonesia are improving to be more environmentally friendly because, in this way, they can increase efficiency and get more priority from data center users.
The sooner investors make decisions, the sooner we can support climate stability and the world economy. In the future, Indonesia needs more green data centers to maintain climate sustainability.