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Australia: APAC’s rising regional hub for green data centres

The green data centre hub of the future is not in Seattle, Silicon Valley or Singapore. It’s right here in Perth, Western Australia, pioneered by Australian company GreenSquareDC™. The company’s flagship A$1 billion data centre, WAi1, is a 96 MW hyperscale facility purpose-built for resource-intensive AI computing. What’s more, it will be powered by clean energy, use considerably less water, and built using sustainable materials with far less embodied carbon.

The rapid uptake of AI is changing the data centre landscape. Generative AI (such as ChatGPT) requires five times the processing power and storage of traditional data centres. General-purpose data centres can’t accommodate new AI-based GPU servers, which use far more power and create much more heat. Conventional air-cooling systems are also unable to dissipate the heat generated by these powerful processors.

Green data centres, like GreenSquareDC™’s WAi1, could hold the answer. By using renewable energy, biofuels, liquid cooling systems and groundwater cooling, green data centres can minimise the environmental impact of resource-intensive processing and storage. They also meet a rising demand from organisations that want to store their data in energy-efficient facilities, so they can meet their net zero commitments.

Asia-Pacific’s hub for data centres

Australia is emerging as a regional hub for data centres. Sydney is the third largest data centre market in the APAC region and Melbourne is the eighth (Cushman & Wakefield, 2023 Global Data Center Market Comparison, January 2023).

It is cheaper to build and operate data centres in Australia than in competing Asian locations. Both Melbourne and Sydney are cheaper than Singapore, Jakarta and Kuala Lumpur. (Turner & Townsend, Data Centre Cost Index 2023, November 2023.)

Western Australia and the Northern Territory are emerging as the new hubs for green data centres in the Asia-Pacific region due to their direct subsea connections, proximity to Asian markets, large supplies of renewable energy and competitive power costs.

Subsea connections to Asia and the world

Australia has 17 subsea cables to Asia and the world. Western Australia has backup cables to Australia’s east coast for additional redundancy. The Darwin-Jakarta-Singapore Cable connects Port Hedland and Darwin to the Perth-based Australia-Singapore cable. Two more digital cables to Singapore and the United States will be delivered by 2027. The Northern Territory is likely to be the link between Australia’s southeastern data centre markets (Adelaide, Melbourne and Sydney) and the Asia-Pacific region. That means Australia can backup existing data storage and processing facilities in Asia and host new facilities to service the region.

Service Asia from Australia

Australia is a healthy market for data centre services, but Asia is the golden ticket. The region’s demand for data storage and cloud computing is skyrocketing. Southeast Asia’s digital economy alone is expected to be worth US$1 trillion by 2030. Thanks to proximity and a shared time zone, Western Australia and the Northern Territory can service data centre customers in Asia.

Large-scale clean energy projects

Western Australia and the Northern Territory’s clean energy projects have the potential to supply gigawatts of additional green power to data centres. Data centre operators willing to explore new markets will find it relatively easy to secure large green power purchase agreements (PPAs) to power their hyperscale and AI infrastructure. US data centre giant Equinix recently signed a 115 MW green PPA to power its 17 centres across Australia.

In Western Australia, data centre operators can source green power from several projects, including the 50 GW Western Green Energy Hub. The state government is also assessing more than 40 green energy projects with another 30 in the pipeline for review.

The Northern Territory is also investing in major renewable energy projects. Larrakia Energy’s 300 MW solar farm will be the largest in the Northern Territory. Samsung and the Northern Territory Government Corporation have signed an MoU to scope the feasibility of a large-scale renewable energy infrastructure.

Competitive power costs

In 2022, the average price for the largest industry users in Western Australia was A$132.36/MWh compared to Singapore’s A$456.28/MWh (Source: Presync, Perth vs Major Global Data Centre Markets – Electricity Price Comparisons, April 2023). Australia’s fair and transparent energy market means you can find the wholesale prices and fuel mix for our three major grids online.

Rising demand for green power among corporates

Green data centre operators can find corporate customers in Australia. Many organisations are switching to green power for their processing and storage requirements. Microsoft has signed a green PPA for 315 MW. Anglo American, Apple, BHP and Telstra have also signed PPAs. Australian advisory firms with expertise in energy procurement can help investors structure and negotiate PPAs. The Business Renewables Centre Australia is also working to make it easier to procure green energy under PPAs.

Incentives for green data centres

The Australian Government has two funding programs to offset the cost of building green data centres. The Industrial Energy Transformation Studies program provides funding for engineering and feasibility studies, so organisations can identify ways to lower energy costs and reduce emissions at their facilities. The Clean Building Management Investment Trust reduces the withholding tax concessions for managed investment trusts from 15% to 10%.

GreenSquareDC™ chooses Perth for A$1 billion green AI data centre

Canadian consulting firm Structure Research identified Perth in Western Australia as one of the world’s top AI infrastructure locations in an October 2023 report.

‘While we considered and will commit to other locations, Perth stood out for its robust renewable energy infrastructure, favorable climate, and proximity to key growth markets,’ says Walt Coulston, GreenSquareDC™’s Founder and CEO.

‘The region boasts abundant land and renewable energy resources, particularly wind and solar. Western Australia has some of the cheapest per MW power on Earth. Both the state and local governments are also a pleasure to deal with.’

GreenSquareDC™ has also secured 3,100 hectares of land in regional Western Australia to build its own ~300 MW wind and solar farm. This ensures it always has renewable energy to power its data centre. It also allows GreenSquareDC™ to control energy costs, reduce dependency on traditional grid systems, and showcase the viability of renewable energy solutions for the data centre industry.

‘By creating more renewable energy than we consume at our data centre, we can achieve our goal of being a “net positive energy consumer”,’ says Coulston. ‘We feel this will resonate more and more with our customers and investors as time goes by.’

‘We want to create a pathway to a true net zero future for our customers and investors,’ he adds. ‘At the same time, we want to deliver the most resilient and dense AI-enabled compute capabilities possible to a wide range of customers.’

‘For green data centre investors, Australia’s stability and renewable energy capacity is incomparable to anywhere else in APAC,’ says Coulston.

Austrade assistance

Austrade will collaborate with state, territory and local governments to help you identify the right site for your green data centre project. We can also help you navigate regulation and secure state government project facilitation support.

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Published: 8 March 2024

Contact an Austrade specialist as an investor as a buyer