Australia is piling on data centre capacity, at the rate of megawatts, forecast to grow by 20 per cent between 2023 and 2025, credit ratings agency Moody's said.
Moody's has 2038 megawatts of capacity for Australia, including current and under construction. This makes the country the a key driver of growth in the region.
China's data centre capacity growth rate is 11 per cent, expected to reach 4908 MW; India meanwhile is growing at 44 per cent towards 2221 MW.
What's driving the growth is artificla intelligence, cloud computing, crypto currencies and outsourcing of storage and compute. Moody's estimate the Asia-Pacific data centre capacity will grow at a compound average of 20 per cent or so through 2028.
Data sovereignty and geopolitical tensions are also a key capacity demand drivers, with APAC governments implemetning regulations around where digital information is stored, Moody's said.
This would take capacity to 24,800 MW, more than double the current 10,500 MW, with the region having almost a third of global expansion.
In dollar terms, the expansion involves investment of over US$564 billion to 2028, with a pipeline of over 4400 MW under construction in the APAC region. Three-quarters of that is in China, India, Japan, and Australia, and should be completed this year or in 2025.
Moody's warning that there are hurdles along the way. These include exposing countries hosting data centres to carbon transition risks, due to the facilities energy-intensive nature.
Along with intense energy demand, data centres consume large amounts of water which could create obstacles to their development in some APAC economies.
Utilities will be required to strengthen local grids and to expand local generation capacity, to accommodate data centres' large energy consumption. This should generate highly predictable revenue and preserve utilities credit strength, Moody's said.
The companies to benefit from the explosive data centre growth are telcos and real estate firms, Moody's said. Telcos get an opportunity to diversity their revenue streams as income declines in legacy mobile businesses, and they can cross-sell data centre services to enterprise customers.
Likewise, real estate companies can invest in data centres to diversify assets and revenue sources, Moody's said.
