The tech industry’s insatiable appetite for power is laying bare a harsh reality: our energy infrastructure is struggling to keep pace. As data centres multiply and AI workloads soar, the strain on power grids is becoming increasingly evident. This trend is not just a challenge, but a call to arms for the energy sector.
The numbers are stark. Data centre power demand is set to balloon by 160% by 2030, according to Goldman Sachs Research. That’s a lot of extra power to find, and fast. The crunch is already being felt. In Malaysia’s Johor, nearly a third of data centre applications were rejected in late 2024 due to electricity and water supply concerns. Vietnam is grappling with power supply challenges. Governments across Southeast Asia are instituting regulations to govern power and water efficiency of data centres.
The constraints are clear. Utilities are hamstrung by delays in government permits, supply chain bottlenecks, and the cost and time involved in upgrading infrastructure. Power infrastructure development often can’t match the swift pace of new data centre builds. The result? A potential power crunch that could stifle the tech industry’s growth.
But within this challenge lies opportunity. Companies are scrambling for solutions, sparking innovation in energy efficiency, alternative energy sources, and power management technologies. Delta Electronics, for instance, is eyeing solar and energy storage solutions. Schneider Electric sees electric vehicles and cooling needs driving power demand, opening doors for new technologies.
CHINT Global’s customers are prioritising energy resilience strategies, including grid stability measures and alternative power sources. Eaton is focusing on power management software and grid-interactive UPS that help integrate renewable energy. Equinix is bracing for a future where AI and machine learning drive energy consumption.
The role of government is crucial. Incentives for electric vehicles, regulations for data centre efficiency, and policies that promote green energy can help manage the power crunch. But the private sector must also step up. Collaboration is key, as no single entity can solve this complex puzzle alone.
This power crunch could reshape the energy sector. It’s a wake-up call for utilities to accelerate infrastructure upgrades and embrace renewable energy. It’s an opportunity for tech companies to innovate in energy efficiency and sustainable power solutions. And it’s a chance for governments to lead with policies that drive green energy adoption and manage power demand.
The stakes are high. The tech industry’s growth hinges on a reliable power supply. The energy sector must evolve to meet this demand, or risk holding back the digital revolution. The stage is set for a dynamic interplay between tech, energy, and policy. The actions taken now will shape not just the energy sector, but the future of the digital economy.
As industry practitioners grapple with these issues, one thing is clear: business as usual is not an option. The power crunch is a catalyst for change, pushing us towards a more sustainable, efficient, and innovative energy future. The question is, who will lead this charge, and who will be left behind?
