Singapore has become the first country in Southeast Asia to pass a law setting binding efficiency standards and clean energy requirements for data centres, as demand for computing power from artificial intelligence (AI) puts pressure on its land, power and water.
The Digital Infrastructure Bill, passed by Parliament on 7 October, requires every data centre with a critical IT load of at least 3 megawatts (MW), existing and new, to be licensed by the Singapore Ministry of Digital Development and Information’s Infocomm Media Development Authority (IMDA) and meet efficiency standards the regulator can adjust over time. Operators that promised green energy can now be held to those promises.
Data centres consumed about 6.5 terawatt-hour (TWh) of electricity in 2024, slightly more than a tenth of Singapore’s total and up from about 7 per cent in 2020. That rise came even as new capacity was rationed.
Singapore paused new data centre developments in 2019 to review its strategy, and since reopening in 2022 has allocated about 280 MW through two competitive tenders, a fraction of the 1.6 gigawatts (GW) it already hosts, with further capacity granted case by case to strategic investors. Each award came with efficiency and green energy conditions.
The new law makes those conditions enforceable and extends binding efficiency standards to every commercial-scale facility, turning green energy pledges into firm demand for clean power, before the supply to meet it exists.
“We are not seeking to attract every megawatt of [data centre] capacity we can,” Senior Minister of State for Digital Development and Information Tan Kiat How said during the debate, adding that this did not mean “simply imposing an arbitrary cap on this growth”. The law was passed after members of Parliament raised questions on its cost to Singapore’s competitiveness, support for operators upgrading older facilities and the effect of data centre demand on electricity prices.
Energy and water efficiency now mandated by law
Singapore’s approach to data centres has tightened in stages since the 2019 pause, with each tender setting stricter conditions than the last. The law enshrines these tender conditions into rules for the whole sector.
From pause to licence
2019: Singapore pauses new data centre developments and the release of land for them to review its strategy.
2022: The pause is lifted. A pilot tender offers up to 60MW to facilities with a PUE of 1.3 or better.
2023: About 80MW is awarded to four operators from more than 20 proposals.
2024: The Green Data Centre Roadmap sets out at least 300MW of further capacity for green data centres.
2026: A second tender awards 200MW to four operators on Jurong Island, requiring a PUE of 1.25 or better and at least 50 per cent green energy. In October, the Digital Infrastructure Bill passes.
Licensed operators will first have to meet energy efficiency requirements measured by power usage effectiveness (PUE), the ratio of a facility’s total energy use to that of its IT equipment. The rules cover cloud, co-location and enterprise data centres alike, across Singapore’s roughly 70 facilities. The largest, those of 10 MW and above, will also need a separate licence covering security and resilience.
Water is next in line. Data centres using more than 60,000 cubic metres of water a year must already follow mandatory efficiency practices set by Singapore’s national water agency PUB, the national water agency, for all large water users. The new law goes further, allowing IMDA to set water efficiency requirements for existing and new data centres.
The law does not set a PUE target or a deadline. Those will come in regulations that IMDA is drafting, and until then, the roadmap’s goal of bringing every facility to a PUE of 1.3 or better remains an aspiration. Once the law takes effect, existing operators will have six months to apply for a licence. The Government has said the standards will be raised over time, at a pace that takes into account operators’ investment and depreciation cycles.
Among Asia’s strictest standards, with deadlines still to come
China has required new, rebuilt and expanded data centres to achieve a PUE of 1.5 or better since November 2022, under a mandatory national standard now being tightened. Germany’s Energy Efficiency Act requires existing data centres to reach a PUE of 1.5 by 2027 and 1.3 by 2030, and all data centres to run on renewable electricity from 2027. Japan expects large operators to reach 1.4 by the 2030 financial year.
Closer to home, Malaysia’s efficiency guidelines for data centres are entirely voluntary, although Johor requires projects to meet a water usage effectiveness of 1.8 and to show that water supply is available before approval. Thailand is consulting on a draft bill that would require operators to be licensed. Singapore’s requirement of a PUE of 1.25 for new capacity is among the strictest in Asia. Unlike Germany and Japan, however, it has yet to set a deadline for the rest of the sector, and its clean energy requirements apply only to capacity awarded through its tenders and to strategic investors.
Regulations signal more clean energy growth in Singapore
The law gives clean energy commitments legal force for the first time. IMDA can now write the efficiency and green energy targets operators promised in their tender bids into their licences. Breaking those conditions can cost an operator up to S$1 million (USD$780,900) or 10 per cent of its annual turnover in Singapore, whichever is higher. The green energy targets apply only to capacity awarded through the tenders and to strategic investors; other data centres face no such obligation.
Among the first to be affected are the four operators awarded 200 MW on Jurong Island in August: Digital Realty, Equinix, Keppel Data Centres and ST Telemedia Global Data Centres, with 5 0MW each. Each committed to a PUE of 1.25 or better and to sourcing at least 50 per cent of its energy from eligible green pathways. If the facilities ran at full capacity, that would mean up to about 1.1 TWh of clean power a year, Eco-Business estimates.
Operators can meet the target through biomethane, low-carbon ammonia, low-carbon hydrogen, fuel cells with carbon capture, or solar panels built into their facilities, according to the Economic Development Board. Apart from solar and some biomethane from local waste, these depend largely on imported fuel; a Keppel-led consortium is studying a 55 to 65 MW power plant on Jurong Island that would run on low-carbon ammonia shipped in from abroad, though as of October 2025 it had yet to commit to building it.
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The data centres’ green energy, in other words, will come mostly from imports, whether as fuel or as electricity. Singapore already aims to import about 6GW of low-carbon electricity by 2035, around a third of its expected demand then, up from about 200MW today.
The tender terms create demand for clean energy that Singapore cannot yet fully supply. JTC, which manages Jurong Island, has described the data centre park there as a way to anchor that demand and help build the supply chains to serve it. Tan said the Government did not want to lock in technologies while low-carbon energy options were “still evolving”; the law creates the demand first and leaves room for supply to follow.
The first test of how demanding the law will be comes when IMDA publishes its draft regulations for consultation, expected within the next year.
