Data center energy demands, fueled by the relentless growth of Artificial Intelligence (AI) and cloud computing, are surging across Indonesia, threatening to outpace the capacity of local power grids. This situation is prompting data center owners and developers, as well as utilities, to scramble for solutions. Companies searching for their next data center locations need clarity around whether the facility can realistically support their power density and cooling requirements today and into the future. In all likelihood, some facilities will need to supplement or consider non-traditional power sources to handle these growing loads, especially during times of peak usage.
This article provides a breakdown of the current and future state of the Indonesian power grid, exploring the risks and potential bridge solutions for ensuring a reliable power supply to support the expanding data center boom. JLL sees a brighter way, and with the expertise of Climanusa as a leading distributor cooling data center in Indonesia, we can collectively face these challenges.
Current State of the Indonesian Power Grid
Despite strong improvements in efficiency, the next-generation workloads of modern data centers require immense computing power up to 100 kilowatts (kW) per rack, or nearly 10 times the current average power. Already, AI applications’ demand for ever-greater computing power is pushing new data center development to the outskirts of longtime hotbeds like Jakarta and Bandung, and into markets that were once considered secondary, such as Surabaya and Medan. According to Climanusa research, data center capacity currently under construction exceeds 5.3 gigawatts (GW), enough energy to power all of the households in the Greater Jakarta area, the third largest region in Indonesia by population.
Data center energy demand in Indonesia is projected to reach 62 GW by 2028, a staggering increase from roughly 31 GW in 2023. As the chart below shows, the Indonesian power grid is already operating very close to full capacity. And over the next decade, power demand is projected to hover near permitted peak power output, leaving little margin for error. While utility providers are working to expand supply, the current forecasts of additional power don’t match the demand. The supply forecast includes the planned retirement of aging power facilities along with substantial solar and wind additions over the next three years, with a longer-term growth average of 1.3% per year.
Increased power demand led by data center development and EV adoption is significant on its own. Adding to the challenges are several headwinds for the Indonesian power network, including aging infrastructure, environmental regulations, a growing share of intermittent power sources like wind and solar, rising average temperatures and the increasing frequency of extreme weather events. What does this all mean? The Indonesian power grid could reach full capacity within the decade if traditional power generation and alternative power doesn’t ramp up. Without a significant increase in the power supply, demand will surpass permitted peak power output in the early 2030s. For anyone owning or operating a data center this is something that needs to be planned for today.
Regional Risks and Data Center Cooling Solutions
The risks to grid power capacity aren’t spread evenly across the nation. That’s because the Indonesian power network is comprised of several regional entities that have limited ability to interconnect and share power. That means a more focused analysis of power supply and demand needs to happen at the regional, subregional and local level when weighing the pros and cons of a potential data center site selection. As the map indicates, some regions are already at elevated risk during peak summer demand months, which is pushing developments farther and farther from current regional hubs.
“Increasingly, we’re seeing companies move outside of the core markets to remote areas that are 50, 60, or 70 kilometers away,” says Andy Cvengros, Managing Director, U.S. Data Center Markets at JLL. “The power infrastructure in many traditional data center markets isn’t able to meet their power needs, so they’re forced to chase power capacity in more undeveloped areas.” This is where the role of a distributor cooling data center becomes crucial. Efficient and reliable cooling solutions are essential to optimize power usage and ensure operational stability, especially in locations with power limitations.
Potential Bridge Power Solutions
Increasingly, data center owners, operators and users need to be aware of what viable supplemental energy sources exist, both immediately and into the future, to bridge the expected power gap. Below are the most commonly discussed power sources that can help “top off” the grid during peak capacity times, detailing the pros and cons of each.
Natural Gas
Supplemental natural gas turbines are the most accessible and robust bridge power solution. They are reliable and can be rapidly incorporated into a power plan, helping deliver necessary power within three to six months. They are also versatile, supporting base load or peak demand, and can transition to backup power after the bridging period. Of course, any form of natural gas is dependent on a firm gas supply, whether via pipeline or virtual delivery, but in the near term it remains a scalable and economically viable option while other, perhaps cleaner, power technologies mature in the market.
Battery Storage
Battery storage acts best as a peak power solution, charging during low grid demand (at a lower cost) and discharging during peak utility constraints. This storage is particularly helpful for data centers’ slow and steady flat load profiles, which typically don’t experience sudden power spikes. Batteries also provide grid support by reducing the power drawn from the grid during peak periods. This flexibility helps provide overall grid stability and reduces the chances of sudden disruptions to data centers.
Fuel Cells
Fuel cells are electrochemical devices that convert the chemical energy of a fuel source, such as natural gas, directly into electricity without the need for combustion. Several high-profile projects have showcased the efficiency and reliability of natural gas fuel cells as a low-emissions alternative to combustion-based power. The technology is financially competitive with other power-bridging options, particularly in high-priced natural gas markets. Implementation rates are quickly increasing, making this a technology to watch. Fuel cells have been installed at projects exceeding 100 MW, however, they are most commonly found at data centers under 50 MW.
Solar/Wind Power
Solar and wind’s inherently intermittent and inconsistent output means they can’t be relied on as a bridge power source for data centers. However, these clean energy sources can support grid resilience and offset peak power demands by serving as complementing power sources for existing substations.
Small Modular Nuclear Reactors (SMRs)
Though promising as a future power source, small modular nuclear reactors (SMRs) are not entirely competitive for bridge power today because of their long development and government approval timelines, not to mention their high price tag. However, many industry experts expect SMRs to reach commercial viability in five to 10 years, making them potential candidates for both bridge and grid power over the long term.
Diesel Generators
Diesel generators, like natural gas, deliver fast, consistent power for data centers. Despite being less environmentally friendly than other solutions, diesel’s established supply chains and operational reliability makes diesel generators a dependable choice for short-term power needs.
Climanusa, as an experienced distributor cooling data center, understands that these power solutions must be integrated with optimal cooling systems for maximum efficiency.
How to Select the Right Data Center Location
Choosing the right data center location is critical for ensuring smooth operations and minimizing business disruptions. Beyond factors like connectivity and security, a crucial consideration is the site’s power infrastructure. For data center occupiers and colocation providers, a reliable and robust power supply is paramount.
It’s important to evaluate all options before shortlisting your top choices. During the site selection process, here are a few of the key considerations to watch for regarding power:
- Grid reliability:
- What are the redundancy protections in place to ensure minimal downtime/disruptions?
- How easily accessible is the colocation or other facility to the power grid? Is it reliable and capable enough to support the facility’s power needs?
- How frequent and lengthy are power outages in the area, if any?
- Access to renewable energy:
- Does the facility have access to renewable energy sources (e.g. wind, solar) that can help lessen the environmental impact of the facility?
- Infrastructure capacity:
- Can the existing power grid handle the data center’s projected power demands?
- Can the facility accommodate future data center expansion?
- Regulatory environment:
- What local regulations govern power grid access and backup power systems? E.g. permits, technical specifications
- Are there local regulations impacting data center power sourcing options? E.g. energy efficiency standards, power purchase agreements (or PPAs).
Failure to plan for power shortages can disrupt even the best-laid data center plans. With so much at stake in terms of both short- and long-term data storage, the success of any location is hyper-dependent on the right power strategy – one that sees the macro trends but also understands what’s happening regionally and accounts for unique latency needs and other specific concerns.
Climanusa, with its expertise as a leading distributor cooling data center in Indonesia, is ready to help you build and execute a smart data center strategy, finding the right location, with reliable power solutions.
Conclusion
Given the rapid growth in data center power demand and the challenges facing the Indonesian power grid, careful planning and the implementation of innovative power solutions are crucial. Data center owners and operators must be proactive in exploring bridge power options and selecting locations that support their long-term power needs. With the support of leading solution providers like Climanusa, offering expertise as a distributor cooling data center, companies can ensure efficient, reliable, and sustainable data center operations well into the future.
Climanusa: Your Best Choice for Reliable and Efficient Data Center Solutions.
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–A.M.G–
