Power, investment key to data centre goal
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Power, investment key to data centre goal

Firms want access to clean energy

Thailand has become a regional destination for major data centre firms.
Thailand has become a regional destination for major data centre firms.

Promoting affordable renewable power and continuing investment in related infrastructure are key factors if Thailand is to achieve its goal of becoming a regional data centre hub, according to executives.

Thailand has become a regional destination for major data centre firms. Alibaba Group recently announced a plan to establish additional data centres in its key markets, including Thailand, over the next three years.

Amazon Web Services (AWS) expects to launch its new data centre region in Thailand by early next year.

Supparat Sivapetchranat Singhara na Ayutthaya, chief executive of data centre provider STT GDC Thailand, told the Bangkok Post that Indonesia, Thailand and Vietnam have growth potential in the data centre sector.

Malaysia's data centre growth is closely tied to Singapore's limited capacity, while the Malaysian government is offering subsidies for data centres, said Mr Supparat.

The Indonesian government issued data sovereignty rules and data laws to incentivise keeping data within the country. Indonesia also has a clear roadmap for renewable energy, which is another factor driving data centre investment, he said.

"Thailand has political stability and high potential for renewable energy, as well as an open policy and neutrality regarding China and the US," said Mr Supparat.

Thailand's data centre growth, although slower than in Malaysia, is characterised by its organic and stable trajectory, offering a more dependable environment for long-term investment, he said.

Mr Supparat said by year-end, total data centre capacity in Thailand should reach 357.45 megawatts before exceeding 400MW at the end of 2025.


He said Thailand should offer affordable power rates for data centres at a rate of less than US$0.10 (3.67 baht) per kilowatt-hour.

The country should have a transparent renewable energy roadmap that outlines the availability and development of renewable energy sources because it will provide certainty for investors and stakeholders regarding Thailand's energy future, said Mr Supparat.

He recommended Thailand provide incentives for reducing internet protocol (IP) transit costs to attract more data traffic and become a central point for regional connectivity.

IP transit refers to the exchange of internet traffic, in which one party pays another for access to a network.


Adam Simmons, an analyst at Dgtl Infra, a global online publication and research provider on data centres, said the wider adoption of generative artificial intelligence technology in Thailand drives investment in data centres.

Thailand holds a strategic geographical position for international connectivity, at the intersection of two key corridors: a north-south route connecting China to Singapore and an east-west passage extending from India to Vietnam.

Deploying data centre capacity in Thailand creates geographic diversity and redundancy benefits as well as lower network latency for China, which can create an improved user experience for Chinese businesses and consumers, he said.

International network connectivity is rapidly improving based on new submarine cables expanding to Thailand, with several new networks arriving in the country this year.

"The Bangkok-Singapore route is one of the largest international internet routes in Asia, and its usage is growing rapidly," said Mr Simmons.

The power supply in Thailand is abundant, with installed power generation capacity of more than 50,000MW, among the highest in Southeast Asia, he said.

The value of data centre investments in Thailand is estimated to reach 110 billion baht by the end of 2024 before expanding to 225 billion in 2027, said Mr Simmons.

He suggested Thailand offer targeted non-tax incentives for data centre investments and continue investments in critical network infrastructure and connectivity.

Marcus Burtenshaw, executive director for head of occupier strategy and solutions at Knight Frank Thailand, said in Bangkok there is 600MW of data centre capacity either live, under construction or planned, representing an investment of $6.3 billion.

Thailand must address the high energy demands of data centres with green initiatives to continue attracting leading data centre operators, he said.

Prime Minister Srettha Thavisin recently expedited the country's data centre initiative, directing the National Energy Policy Committee and the Board of Investment to develop support measures to facilitate direct power purchase agreements (PPAs).

A direct PPA is a contract between a renewable energy generator and a buyer that allows the buyer to purchase electricity directly from the generator.

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