When you hear ‘ decarbonizing data centers ‘, does that mean it’s eliminating its Carbon footprint? In a sense, there is some truth to this. But from our perspective at Asia Green Data Center, we are tackling this problem from a different angle.
Data Centers in Indonesia
The Indonesian Data Center market value was USD 1.7B in 2021. It may reach USD 2.4B by 2027, growing at a C.A.G.R of 5.46% from 2022 to 2027.
In Indonesia, data centers were owned by companies for their business needs, providing their users with computing and IT resources in-house. Once a self-managed facility, the data center is now in high demand due to the growth of the digital economy.
Data Center Market Outlook
Jakarta is the preferable location in Indonesia owing to better network connectivity and accessibility to the end-users to improve the latency.
Due to COVID-19, Indonesia has witnessed growth in cloud adoption by several industry verticals such as enterprises, government agencies, & education sectors. Also, AWS, Microsoft, Google, and Alibaba Cloud are among the cloud service providers that exist in Indonesia.
Telecom operators and colocation operators dominate Indonesia’s data center industry. Therefore, the Indonesian data center market is spotting the entry of new investors, such as Data Center’s first plans to construct data centers in the country.
According to Indonesia’s Ministry of Finance, the government provides tax incentives to the data center industry to invest in Indonesia. More than $2.10 billion in investment will receive a tax reduction for nearly 20 years.
The data center operators are acquiring renewable energy to operate their operations. For example, DCI Indonesia unlocked its first phase in the H2 data center campus bearing a power capacity of around 15 MW. The campus will be run by solar farms constructed inside the campus.
Free Trade Zones are a source to fascinate data center industry workers to invest in Indonesia by permitting various tax incentives for the data centers constructed in the FTZs. In November 2021, GDS Services obtained land in Nongsa Digital Park to build two data center buildings with 107,600 square feet bearing a power capacity of approximately 28 MW.
Key Highlights of a Report on Data Centers in Indonesia
Currently, Indonesia has more than 65 operational colocation data centers. Most colocation data centers are being grown according to Tier III standards. According to Uptime Institute, they have certified more than 45 data center facilities under tier III standards.
The major demand operators for colocation services in Indonesia are industries. These industries include cloud service providers, telecom service providers, 5G deployment, and growing AI. The Ministry of Communication & Informatics states that public institutions must establish data centers within Indonesia.
To improve & boost the digital economy, the Indonesian government has launched the Digital Indonesia Roadmap 2021-2024, accelerating the growth of digital transformation in the country.
In Indonesia, the telecom operators are working towards deploying commercial 5G services by companies such as Telkomsel and Indosat.
The deployment of 5G networks will improve the digital economy of the region and will lead to higher demand for high-bandwidth networking infrastructure. For instance, Amazon Web Services (AWS) supports its clients with Jakarta’s edge data center facility. Let’s have a look at the rising concept of decarbonizing data centers in Indonesia.
Decarbonizing Data Centers
Today, a maximum of electricity gets generated by using fossil fuels. Still, governmental, regulatory, and societal pressure won’t stand for that as we are trying to protect our environment and earth.
Almost half of the world’s GDP is now covered by decarbonizing Data Centre targets or net zero targets, such as the UK’s Net Zero Law & the European Green Deal. At the same time, consumers and investors also demand action. We need to decarbonize data centers, and there are three key areas to address.
- Less Heat and Less Energy Use
- Greening the Power Supply
- Clean energy Storage and Backup
Concept of Data Centre E-Waste Management in Indonesia
Indonesia is the 4th most populous state and one of the largest electronic customers in the world. Due to this, it has a sizeable share of used electronics & electrical devices, called e-waste.
This e-waste ranges from end-of-life mobile phones, tablets, laptops, personal computers, and batteries to televisions and white goods like refrigerators and washing machines.
A paper estimates Indonesia could produce about 2M tonnes of e-waste in 2021, the most in Southeast Asia. By 2040, the economic potential of e-waste in Indonesia can reach USD 14B.
How can E-waste Recycling be helpful in Indonesia?
Recycling data center waste offers economic opportunities for Indonesia. At the same time, it contains high-risk elements that need to be processed and managed.
It also includes precious metals such as silver, copper, gold, platinum, palladium, & other valuable metals for technologies of daily use. In some cases, the concentration of selected metals in e-waste is more than in their primary minerals underground.
For example, it takes about 0.5-1 tonnes of gold ores to produce the gold in a wedding ring (about 2 grams). The same amount of gold can get manufactured from just 15 to 30 kg of end-of-life mobile phones. Hence this “urban” resource can become an alternative for metal manufacturing.
Indonesia’s annual e-waste generation is estimated to increase to 3.2M tonnes in 20 years. That’s about 10 kg of e-waste per individual in 2040, an increase from 7.3kg/person.
The above study also highlights that most e-waste is in major islands with large populations. Java, the country’s most populated island, is estimated to produce about 56% of the nation’s e-waste.
The European Indonesia Joint Committee designed a Working Group on Environment & Climate Change in November 2016. They express a desire to deepen the cooperation across various climate policy topics. This Working Group meets annually.
On 21 June 2021, Commission approved the “Joint Green Agenda,” a proposal to Indonesia to expand the framework for bilateral collaboration on climate, environment, & energy-related issues. This framework will more directly involve European member states and several other stakeholders.
At the same time, no agreement has been secured on the suggested topics for cooperation. It will be developed further through a Work Programme covering technical assistance, private sector cooperation, & investments by the EU and its Member States.
In July 2021, Indonesia submitted its updated Nationally Determined Contribution to the UN Framework Convention on Climate Change, reconfirming its 2016 commitments. Indonesia raised its long-term strategy on the same day, which mentions the possibility of reaching peak emissions by 2030, “further exploring the opportunity to progress towards decarbonizing data centers by 2060 or sooner rapidly”.
The world has witnessed the Digital economy rise in Indonesia. Indonesia has joined hands with Europe for the “Joint Green Agenda” to address the e-waste management issues.
As per the plan, the Indonesian government is committed to reaching decarbonizing data centers or net-zero emissions through environmental reforms by 2060.
Stay informed about the sustainable data center industry at AsiaGreenDC.