Hong Kong's goal to become the Asia-Pacific's prime hub for data centres is poised to gain more traction as the expansion of key electricity infrastructure gets underway.
However the city may also need to step up efforts to develop "cleaner" energy to support more of this infrastructure in future.
CLP Power announced in July the development of the city's first substation dedicated to data centres in Tseung Kwan O, where many of these high-energy consuming facilities are located. More network-capacity development projects are now being planned to meet the expected growth in electricity demand at other districts, said Paul Poon Wai-yin, the chief operating officer at CLP Power.
"With the incentive measures implemented by the government in late June 2012 to transform [old] industrial buildings into [modern] data centres, the corresponding load demand in traditional industrial areas, such as Sha Tin, Kwai Chung, Tsuen Wan, and Kwun Tong will be increased," Poon said.
CLP Power declined to provide its estimate of total annual power requirement of data centres in Hong Kong, but pointed out that it was supplying electricity to more than 40 data centres in its local area coverage. Total electricity sales in CLP Power's supply area - covering Kowloon, the New Territories, and most of the outlying islands - reached 31,168-gigawatt hours last year. The average annual growth in demand in that area, where CLP Power operates more than 13,500 substations that serve about 80 per cent of the city's population, ranged from 1 to 2 per cent in the past decade.
"In the United States, the power consumption of data centres is something like 2 per cent of [the country's] total [annual] consumption," Poon said.
"In Hong Kong, the percentage should be less than that number." A data centre is a secure, temperature-controlled facility equipped to house large-capacity server computers and data-storage systems, which are maintained with multiple power sources and have high-bandwidth links to the internet.
Market researcher and consultancy Frost & Sullivan said large data centres in Asia tend to be located in the most expensive cities - Tokyo, Hong Kong, Singapore, Shanghai, and Sydney.
The financial services, trading and logistics, information technology, telecommunications, and content development and media industries account for more than 84 per cent of the total demand for data centre space in Hong Kong.
Technology analyst firm Gartner estimated total revenue from data centre services in Asia reached US$10 billion last year. But it also noted that data centre operational costs are continuing to rise, with up to 50 per cent of operating costs associated with heating and cooling.
The city is accelerating efforts to expand its power infrastructure to meet the demand from providers like China Mobile, multinational companies such as Google, and large local enterprises like Hong Kong Exchanges and Clearing, which are establishing advanced, more energy-efficient data centres here.
The Office of the Government Chief Information Officer, the agency that sets Hong Kong's policies for information and communication technologies, said early this year that it received about 60 inquiries about the setting up of new data centres and provided assistance to some 10 projects.
A big advantage for establishing a data centre in the city is having two local utilities (the other is Hongkong Electric), deliver what is called a "supreme level" of electric power reliability, which is at over 99.999 per cent.
The city's government chief information officer, Daniel Lai, said: "The two electricity companies are connected with enough capacity to provide emergency support to each other in the event of generator failure, and hence reducing potential loss of supply to customers."
Lai added that the "average duration of unplanned power interruptions each year per customer in Hong Kong was 2.6 minutes or less". Taylor Man, executive vice-president at NTT Com Asia, which is building the city's most advanced data centre in Tseung Kwan O, said the local power system "has logged significantly less downtime per year on average than Tokyo, New York or London".
When CLP Power's 4,400 square metre Chun Yat Street substation in Tseung Kwan O starts operations in mid-2014, it will have a 300-megawatt capacity that can serve about 10 advanced data centres which are expected to be operating in the district at that time. That capacity would theoretically allocate an average of about 30MW per data centre.
Poon, however, said: "It is difficult to make a comparison [of power consumption levels] since the scale of each data centre can be different".
Still, Frost & Sullivan described the global operation of data centres as an "energy-guzzling business", which uses up "nearly 2 per cent of the world's electricity supply". It said many of the older data centres have had to upgrade their cooling systems to handle new equipment, such as so-called "blade" servers. These computers require less space, but consume more energy.
Greenpeace International, the environmental advocacy group, has long criticised the increased use of coal, gas and nuclear energy to power data centres. Many of the new facilities are being used for cloud-computing applications. Yau Yeung, Greenpeace's local "Clean Our Cloud" campaigner, said in a report by Computerworld Hong Kong that the government had no metrics for assessing the environmental impact of energy used by data centres.
A Greenpeace report found that Hong Kong's current power grid mix is 54 per cent by coal, 23 per cent by nuclear energy, and 23 per cent by natural gas. It also estimated that electricity generation accounted for 67 per cent of local greenhouse gas emissions.
However, Poon said CLP Power continued to explore opportunities to increase so-called renewable energy in its power-generation mix.
"For example, we are conducting a feasibility study on developing a 200MW offshore wind farm in Hong Kong. We also have the city's first commercial-scale standalone solar project on Town Island supplying electricity to the inhabitants there."