Leveraging Geothermal Power for Singapore’s Data Center Sustainability

This piece was originally published by CCSI.

Singapore’s Data Center Expansion and Energy Challenges

Singapore, a key player in the global data center industry, is experiencing a significant surge in data center developments. This growth, driven by the widespread adoption of AI, offers substantial economic benefits. However, Singapore faces challenges due to its limited clean energy resources. A potential solution lies beneath the Strait of Malacca, where the Sumatra–Singapore grid interconnection could tap into South Sumatra’s geothermal resources, providing sustainable energy for Singapore’s expanding data centers.

Current Data Center Capacity and Growth

By late 2025, Singapore’s data center capacity reached 1.4 GW across 72 facilities, with a projected compound annual growth rate of 9.53% and $3.04 billion in investments by 2032. The increasing role of AI in Southeast Asia’s tech landscape and Singapore’s mature data center market have been key growth drivers for major companies like Amazon, Google, and Microsoft.

Energy Constraints and Environmental Challenges

Singapore’s reliance on imported LNG and cross-border piped gas accounts for 94% of its electricity, resulting in the highest electricity costs in ASEAN at nearly $0.23/kWh. The nation’s dense population and limited land space hinder the implementation of renewable energy, which currently contributes only 3.9% to electricity generation. New data centers are required to derive at least 50% of their power from low-carbon sources, further complicating the energy scenario.

Exploring Geothermal Potential in Sumatra

To diversify energy sources, Singapore is participating in the Laos–Thailand–Malaysia–Singapore Power Integration Project (LTMS-PIP). By the end of 2023, this initiative supplied 265.73 GWh of electricity, representing 1.5% of Singapore’s peak capacity. However, geopolitical dynamics and monopolies in grid transmission pose risks. The Sumatra–Singapore grid interconnection project offers a promising alternative by tapping into South Sumatra’s 2 GW geothermal potential, potentially meeting all of Singapore’s data center energy demands by 2030.

Collaborative Opportunities with Indonesia

Indonesia stands to benefit significantly from this collaboration. President Prabowo’s commitment to phasing out fossil fuels and developing over 75 GW of renewable energy by 2040 aligns with the geothermal project. Danantara, Indonesia’s Sovereign Wealth Fund, holds 99% of PLN and supports investment in renewable energy projects. Joint ventures, like the Ijen Geothermal Power Plant co-financed by PT Sarana Multi Infrastruktur, highlight the potential for collaboration.

Utilizing geothermal energy from South Sumatra can revolutionize the energy landscape for Singapore’s data centers, providing a sustainable and reliable power source. This regional grid integration not only aids Singapore but also empowers Indonesia to industrialize while building a clean energy future.

Aniruddha Pravin Jaydeokar is a researcher at the Columbia Center on Sustainable Investment (CCSI) with a focus on leveraging innovative financial structures and instruments to drive systems-level change in mining and energy value chains, as well as in the decarbonization of hard-to-abate sectors.

CCSI is a leading applied research center and forum at the Columbia Climate School, dedicated to the study, practice and discussion of sustainable international investment.

Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of the Columbia Climate School, Earth Institute or Columbia University.