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Ember report highlights solar and storage as key to Thailand’s data center growth. (Photo: iStock)
The data center boom is driving massive electricity demand, and Thailand is seeking to seize the opportunity to become a regional hub.
The government’s revised power development plan (RPDP) sets a goal of 51% renewable energy generation by 2037. However, a new report from the global energy think tank Ember argues that Thailand could set even higher targets, which would strengthen the country’s position in regional data center growth.
Ember urges bolder clean energy goals for Thailand
The RPDP aims to add 64 GW of renewables and energy storage by 2037. However, Ember suggests that increasing solar capacity targets by 89% and battery storage by 60% could save Thailand USD 1.8 billion in power generation costs, even though it would require about USD 15 billion more in capital investment.
Thailand's data centers are emerging as one of the country's major power-consuming industries. Thailand's current data center capacity is estimated at 114 MW. According to Bloomberg, this capacity is expected to triple within the next three years to roughly USD 6.5 billion.
Wood Mackenzie projects that electricity demand from data centers will account for 2.2% of the nation's total power consumption by 2030. Ember further forecasts that demand from data centers alone could reach 10 TWh by 2037.
Ember estimates that increasing Thailand’s solar targets by 89% and battery storage by 60% could save USD 1.8 billion in power costs, despite needing about USD 15 billion more in investment. (Chart: Ember)
Thailand opens power market to green data centers
To attract hyperscale operators, the Thai government approved a direct power purchase pilot program in late 2024. This scheme allows data centers with at least 50 MW capacity to purchase electricity directly from renewable energy generators under a direct power purchase agreement (DPPA), marking the first relaxation of the country’s single-buyer electricity system.
Also, the government introduced its “Cloud First” initiative, which explicitly calls for renewable energy use in data center operations, the adoption of energy-efficient cooling systems, and broader sustainability measures such as recycling and waste reduction.
These policies have already drawn USD 2.8 billion from major investors including Amazon Web Services, Microsoft, TikTok, ST Telemedia, and NTT. Google further announced a USD 1 billion investment in Thai data centers last year to support AI adoption in ASEAN.
Renewables key to ASEAN data center race
ASEAN countries are racing to become the region’s leading data center hub. Ember highlights that Thailand’s advantage comes from making stronger commitments to renewable energy. Malaysia and Indonesia are moving to expand gas capacity and delay fossil fuel phase-outs, which Ember says run counter to the clean energy goals of major data center investors.
Ember also notes that the Philippines, despite favourable policies and a projected fivefold increase in capacity by 2025, continues to struggle with high electricity costs and an unreliable power supply. Vietnam is advancing ambitious digital transformation plans but faces recurring power shortages. Thailand could pull ahead in this race by accelerating its clean energy transition and aligning more closely with global investors’ renewable energy commitments.
The race, however, is more like a hurdle race. Ember notes that the Thai government’s plan to include wind power is neither financially viable nor well-suited to the country’s geography, making solar and storage the key to progress. Limited wind resources could be compensated by importing hydropower from Laos, Ember adds, though such reliance carries potential social and economic risks.
If Thailand can overcome these hurdles and expand solar and storage, it could meet the soaring power needs of its data centers and emerge as ASEAN’s green digital hub. Ember concludes that such a shift, built on reducing new fossil investments and making renewables the backbone of the power system, would also cut costs and strengthen energy security.
Source: Ember (1) (2), Bloomberg
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