Southeast Asia’s AI data centre gold rush tests power grids in the tropical heat

2026.03.18 09:20 A technician works at a data centre in the United States last year. Photo: AWS/Reuters Singapore sits just one degree north of the equator, where the air rarely drops below 25 degrees Celsius (77 degrees Fahrenheit) and humidity clings year round. It is, by most measures, one of the worst places on Earth to cool a data centre. Yet the city state crams more into its small footprint than almost anywhere else. Home to more than 70 facilities and over 1.4 gigawatts of capacity, Singapore has one of the highest densities of data-centre infrastructure per capita on the planet – a testament both to its lofty AI ambitions and a booming regional industry. Data centres have mushroomed across tropical Southeast Asia in recent years amid surging demand for processing power. These power-guzzling facilities play a central role in the ongoing artificial intelligence revolution, but are increasingly being put under the microscope for their energy efficiency – or lack thereof – in the equatorial heat. The International Energy Agency estimated in 2024 that data-centre electricity demand would then double by 2030 if current trends continued. In some markets, that consumption is projected to account for as much as 30 per cent of total national electricity demand – raising serious concerns about the strain it places on the power grid. In some markets, data-centre power consumption is projected to account for over one-fifth of total power demand by the end of the decade. Photo: Shutterstock Modern data centres need to maintain operating temperatures in the range of 18 degrees to 27 degrees, according to the American Society of Heating, Refrigerating and Air-Conditioning Engineers’ guidelines. That is cooler than the typical ambient temperatures in Singapore, Johor or Jakarta. “Southeast Asia can absolutely host large-scale digital infrastructure, but the tropical climate means efficiency cannot be treated as an afterthought,” said Lee Poh Seng, an associate professor of

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