S&P Global: More fossil-fueled data centers despite renewables push

Even with the rise of artificial intelligence (AI), global research firm S&P Global projects that demand for fossil fuels will weaken over a longer term to power expanding data centers requiring up to 200 terawatt-hours within this decade.

In a report released Friday, S&P said AI can adjust energy equipment to maximize power use at data centers and quickly detect worn-out parts of equipment to be urgently replaced to prevent power wastage.

“While the scale and speed of AI adoption clearly favors increased fossil fuel usage, there are theories that it will reduce energy usage and emissions in the longer term,” S&P said.

S&P data showed global investments in building data centers have reached $35 billion to run cloud technologies that store consumer and corporate data and facilitate computer applications over the Internet anytime.

Data centers contain the necessary equipment to fulfill these transactions and serve multiple domestic and overseas firms.

Slow shift in RE to run data centers

However, S&P data also showed that the global shift to renewable energy to run data centers has been slow due to the overwhelming consumption of cloud-based or digital services among businesses.

“According to S&P Global Market Intelligence, investing in fossil fuel assets is considered a strategic move for private equity since AI data center infrastructure requires levels of energy that intermittent renewable power, such as weather-dependent solar and wind, cannot provide,” the international institution said.

S&P Intelligence report said the world’s five largest cloud infrastructure providers already hiked capital expenditure by 57 percent in the second quarter to $55 billion.

It added leading asset management firm Blackstone will be pouring another $70 billion over data centers, building on its previous $55 billion investment.

Citing data from Goldman Sachs, S&P said data centers in the United States will consume up to 8 percent of its total energy by 2020.

SEA digital data tech center

Department of Information and Communications Technology (dict) Secretary Ivan Uy said the Philippines has the potential to become Southeast Asia’s digital data technology center, following the construction of a 124-megawatt data center in Quezon City by Globe Telecom and Singapore-based ST Telemedia Global Data Centres.

“Traditional areas like Singapore and Japan are getting crowded. So this is an open field where they can see almost unlimited growth not just because of the untouched potential of our land but even our human resources. DICT is already training many of our youth in data management,” he said.

Data center boom

ST Telemedia Global Data Centres president and chief executive officer Bruno Lopez said the boom in data centers is being driven by smartphone applications and services from technology giants Microsoft, Amazon and Google.

“Before, each of them wanted just 5 megawatts, now 20 megawatts. These hyperscalers’ workload is being managed through the cloud whose demand is driven by various applications like TikTok. All these data need to be somewhere in physical locations like we have here,” he said.

With the government’s goal to open up access for Filipinos to electric vehicles, Uy said data centers could expand faster.

“I think in the next 10 years our automotive industry will have a very profound transformation because these electric vehicles will be powered by computers,” he said.