SINGAPORE will see a short-term increase in liquefied natural gas (LNG) demand, due in part to the AI boom that’s driving data centre growth, according to the country’s state-owned importer of the fuel.
The digital world “is a huge call on energy”, said Singapore LNG Corp chief executive officer Leong Wei Hung. The surge in demand is a “boon for energy”, but there’s also a flip side “in the sense that you can’t build infrastructure fast enough”, he said in an interview late on Thursday (Sep 26).
The boom in data centres and artificial intelligence is starting to outstrip available power supply in some parts of the world. Tech giants such as Amazon and Microsoft are pledging to invest billions of US dollars in data centres in South-east Asia. Singapore’s government is aiming to increase the amount of power it allocates for data centres by as much as 35 per cent.
Singapore LNG was formed in 2009 by the country’s Energy Market Authority to develop and operate the city-state’s only LNG import terminal. A second terminal “to meet the expected demand” is set to come online by the end of the decade, Leong said.
The jump in electricity consumption will make it tougher for Singapore to decarbonise its grid. It relies on imported gas for around 95 per cent of its electricity, but its options to develop renewables are constrained by a lack of space.
Instead, the city-state is aiming to import green power from its neighbours, and has a goal to bring in six gigawatts by 2035, which would be around half of overall demand.
Leong said he was optimistic that LNG would have a continued role to play in Singapore as the world moved towards cleaner sources of energy.
“The world must go towards renewables, but the cost of renewables is still very high,” he said. “While we wait for renewables to be reasonably priced, LNG has to be the solution.” BLOOMBERG
