Thailand powers up for data center boom with clean energy overhaul

Siemens, in collaboration with Krungthep Turakij, hosted the “Siemens Data Center Conference 2025: Redefining Data Center Infrastructure” on June 5, 2025, to raise awareness and deepen understanding of future data center trends. Ross Conlon, President and CEO of Siemens Thailand, delivered the opening remarks.

Sarat Prakobchat, Deputy Director of the Energy Policy and Planning Office (EPPO), presented on the topic “Empowering Sustainable Data Centre Growth through Thailand's Clean Energy Policy.” He emphasized that data centers’ energy demands are highly significant. In 2024, global data centers consumed 415 TWh of electricity — about 1.5% of global power usage. By 2030, consumption is projected to more than double to 945 TWh, or 3% of global use, reflecting robust and sustained demand growth that operators must plan for. 

The Thai government aims to position the data center sector as a key future industry. According to Krungsri Research, between 2025–2027, Thailand’s data center industry is expected to grow at an annual rate of 7.5%–8.5%, driven by the expanding digital economy — a signal for authorities to ensure sufficient power supply.

“Business growth has also been propelled by government measures,” Sarat noted, pointing to the BOI’s investment incentives, which have been refined to better align with national strategies.

To support this growth, the Ministry of Energy has updated its Power Development Plan (PDP) with three main goals:

1. Energy security — Ensuring constant power availability through metrics like Loss of Load Expectation (LOLE).

2. Environmental sustainability — Targeting at least 50% renewable energy by 2037 and a 30–40% cut in power sector carbon emissions from the baseline year.

3. Cost competitiveness — Keeping retail power prices below 4 baht per unit throughout the plan's duration.

The PDP also supports a 2.99% average annual economic growth from 2025 to 2037 and introduces targets for clean technologies, including:

• Hydrogen to comprise 5% of energy use by 2030
• Deployment of 600 MW in Small Modular Reactors (SMRs) by 2037
• Demand response measures and smart grid development, including 2,000 MW in peak reduction strategies

Beyond the PDP, the government is backing the data center ecosystem through several initiatives:

1. Smart grid policy (short- and long-term) to create a resilient grid and accommodate large-scale renewable energy.

2. Clean electricity procurement policies, such as offering "green electricity rates" (UGT) from all three state utilities. The next phase, UGT2, aims to offer 100% green energy.

3. Direct PPA pilot projects, targeting 2,000 MW, are being evaluated for safety and aimed mainly at data centers to ensure supply flexibility and reliability.

To realize these goals, Sarat stressed that the government must coordinate across multiple sectors and ensure energy policy aligns with business and consumer needs. Data centers, he noted, typically consume between 100–200 MW per facility, making policy planning critical to Thailand’s ambition of becoming a regional digital hub.

Hyper-Scalers Pose New Challenges Amid Data Center Boom

Samir Borkar, Senior Vice President and Head of the Regional Data Center Business at Siemens, stated that while Thailand’s data center growth was once merely a forecast, it has now become a tangible reality. Based on the company's internal analysis, both the number of bids and data center project developments in Thailand are clearly on the rise. 

“Previously, most bids were in the 12–20 MW range. Now, we’re seeing proposals hitting 100 MW. This reflects that we’re no longer just talking about theoretical trends — it’s happening, and we expect this momentum to continue for at least the next 5–7 years.”

Samir also highlighted that the industry is encountering fresh challenges from the rise of hyper-scalers and AI workloads, which introduce operational complexity. This underscores the need for early-stage collaboration on design and integrated management strategies.

Fire Risks: A Critical Threat to Data Center Operations

Suwong Ratchawong, Fire Detection Technical Expert at Siemens ASEAN, noted that fires in data centers pose serious threats — not just to assets and business continuity, but also to the lives of on-site staff. He stressed the importance of adhering to international safety standards.

“The key standards applied are from the National Fire Protection Association (NFPA), especially NFPA 75, which covers fire sprinklers, smoke detection systems, and fire-resistant equipment, and NFPA 76 for telecom systems. Compliance with these standards also directly impacts insurance premiums.”

Thailand’s Data Center Growth Outpaces Expectations

Saneh Pienrattanakul, Head of Operations at True IDC, acknowledged that demand for large-scale data centers and AI-focused clients has grown much faster than previously anticipated. This rapid acceleration requires significantly more advance planning — from design and construction to operation management.

“What enables us to meet this demand is having strong partners across every function,” he said.

Jodi Pieterse, Director at WT Partnership, concluded that one of the industry’s biggest current challenges is the rising cost per megawatt, largely driven by future-proofing requirements amid high uncertainty.

“What we can do is manage costs through careful design decisions, well-structured project planning, and precision in cost-control techniques,” he explained.

AI and 5G Fuel Foreign Investment in Thai Data Centers

Rapeepoom Lapmak, a researcher from Krungsri Research, speaking on the topic “Industry Outlook: Data Centre,” emphasized that data centers serve as foundational infrastructure—intentionally designed data systems that support seamless operations across the digital supply chain.

He noted a sharp increase in foreign direct investment (FDI) in Thailand's data center sector. In 2024, investment applications for data centers totaled over 240 billion baht, with key players including Amazon Web Services (over 200 billion baht), Google (over 30 billion baht), and Microsoft (undisclosed). The bulk of this investment has come from the U.S., China, and Singapore.

Momentum has continued into 2025. Early this year, a TikTok subsidiary invested over 120 billion baht, while SIAM AI Cloud committed 3.3 billion baht.

“In March alone, a Chinese firm expressed interest in investing over 70 billion baht, and a joint venture involving the GULF Group proposed another 13 billion baht, bringing Q1 2025 total investment applications to 94 billion baht — a fivefold increase compared to the same period last year,” said Rapeepoom.

The Board of Investment (BOI) has also announced five new data center projects worth over 90 billion baht.

2025–2027 Outlook: Triple Drivers of Growth

Looking ahead, Thailand's data center industry is expected to grow 7.5%–8.5% annually between 2025 and 2027, driven by three main factors:

1. Rising Internet and Digital Payment Usage

In 2024, E-payment transactions in Thailand totaled 4.9 trillion baht, with expected annual growth of 10–14%, reaching 8.7 trillion baht by 2030.

2. Widespread Cloud Adoption

Thailand’s cloud industry revenue is projected to hit 80 billion baht in 2025, doubling annually thereafter. Businesses are increasingly turning to cloud solutions for flexibility, cost efficiency, and security. The Thai government is actively promoting adoption through its upcoming “Cloud First Policy,” expected to launch in October 2025, to attract more FDI and boost digital infrastructure.

3. AI Integration Across Sectors

Globally, AI is projected to generate $211 billion in revenue in 2024 and grow over 8x to $1.62 trillion by 2030, a 19% annual growth rate. In Thailand, 17.8% of organizations are using AI

B.Grimm Highlights Cooling Systems as the Heart of Data Center Efficiency

Arnon Kulawongvanich, Managing Director of B.Grimm Technology Co., Ltd., spoke on the topic “Empowering Data Center Infrastructure with Innovative Solutions for Efficiency, Resilience, and Sustainability”, emphasizing that the company is currently partnering with Siemens on data center solutions to provide tailored energy services for clients.

He noted that clients today increasingly demand energy-saving solutions — particularly improvements in cooling systems, which are among the most energy-intensive components of data centers. Enhancing the efficiency of HVAC (Heating, Ventilation, and Air Conditioning) systems is therefore critical to improving Power Usage Effectiveness (PUE), a key metric for energy performance in data centers.

Arnon also pointed out that electricity costs in Thailand present a major challenge for data center operations. Clear policies are needed to enable access to clean electricity. The current pilot quota of just 2,000 MW under the Direct Power Purchase Agreement (PPA) scheme is far from sufficient to support investment projects worth hundreds of billions of baht.

While Thailand's electricity prices are moderate compared to other ASEAN countries (with Singapore and the Philippines being the most expensive, and Thailand at just over 4 baht per unit), it remains an attractive investment destination. However, the main obstacle is the difficulty of integrating data centers into clean energy systems. The government must therefore improve the management of this transition to ensure long-term competitiveness and sustainability.