Data centers should be viewed not only as major consumers of electricity and water but also as potential catalysts for upgrading the energy and water infrastructure that supports Asia-Pacific economies, according to a whitepaper by the Asia-Pacific Data Centre Association (APDCA) revealed on Thursday.
APDCA said in the whitepaper data centers can play a broader role in modernizing Asia-Pacific’s energy and water infrastructure as governments accelerate investment in artificial intelligence, cloud computing and other digital technologies.
The industry association said the rapid expansion of data center capacity has intensified scrutiny over electricity consumption, water use and other sustainability impacts.
However, focusing primarily on what data centers consume risks overlooking the infrastructure investment and wider economic benefits they can generate, it said.
“Data centers are not merely users of electricity and water,” APDCA said, arguing that operators are increasingly helping to modernize energy and water systems through investment, long-term demand commitments and partnerships with governments and utilities.
Reliable power supplies, resilient electricity grids and sustainable water systems are prerequisites for data center investment, creating incentives for infrastructure upgrades that can also benefit other users, the association said.
The whitepaper said data centers can act as demand anchors for large-scale energy projects by providing predictable, long-term demand, helping to unlock investment and accelerate new capacity.
Operators are also supporting the shift towards renewable and alternative energy through power purchase agreements, on-site generation and investments in new clean energy capacity.
Such initiatives could contribute to downward pressure on wholesale electricity costs over time, while data center operators that create or co-own energy infrastructure can also strengthen grid stability, flexibility and resilience, APDCA said.
The same dynamic is emerging in water infrastructure.
According to the association, data centers can serve as anchor customers and financing engines for water projects, improving their bankability and accelerating deployment.
Operators are also adopting more efficient water-management practices, including advanced cooling and monitoring technologies, while supporting alternative and recycled water systems that could reduce pressure on potable water supplies.
APDCA said the issue should ultimately be considered through the lens of infrastructure productivity — not simply how much energy or water digital infrastructure consumes, but how effectively those resources are converted into economic value, innovation, public services and broader societal outcomes.
“As economies increasingly adopt AI and other digital technologies, infrastructure that underpins productivity and competitiveness should be assessed in the context of both its resource requirements and the benefits it enables,” it said.
The whitepaper, which draws on interviews with data center operators as well as input from academics and civil society organizations, said a coordinated approach between governments, utilities and the private sector would be needed to maximize these benefits.
APDCA proposed an “Align–Accelerate–Amplify” framework as a blueprint for policymakers.
The first pillar, Align, calls for data center demand to be incorporated into national and sub-national infrastructure planning.
Accelerate focuses on removing bottlenecks that can delay grid connections, water infrastructure, permitting and other supporting infrastructure.
The final pillar, Amplify, calls for policies that encourage co-investment, innovation and the wider system benefits arising from private-sector infrastructure spending.
APDCA said governments that put the right policy frameworks in place could unlock the potential of data centers to act as catalysts for infrastructure modernization across the region.
The association added that the sector was also stepping up efforts to improve its own sustainability performance, including through greater energy efficiency, renewable energy procurement, alternative cooling technologies and more sustainable water-management practices.
Industry initiatives such as the Sustainable Digital Infrastructure Accord (SDIA), described by APDCA as the first Asia-Pacific-wide set of sustainability commitments for the sector, are part of efforts to establish common standards and strengthen industry accountability.
The whitepaper comes as Asia-Pacific seeks to expand digital infrastructure to support AI and cloud adoption while balancing growing concerns over the environmental footprint of data centers.
APDCA said the policy challenge was therefore not simply to limit the resources consumed by data centers, but to ensure that investments in digital infrastructure also deliver lasting economic, environmental and societal benefits for the wider communities in which they operate.
“Data centers are critical infrastructure for Asia-Pacific’s digital future. Their contribution extends well beyond the facilities themselves. Across the region, the sector’s scale, predictable demand and long-term investment are already helping to accelerate clean energy deployment, strengthen grids and support more resilient water systems,
“There is significant potential to go further. With the right policy enablers in place, governments can unlock the full potential of data centers as catalysts for infrastructure modernization, ensuring that digital infrastructure investment delivers lasting economic, environmental and societal benefits for communities across the region,” said Jeremy Deutsch, Chair of the APDCA.
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