Governments around the world have been closely monitoring the development of data centers to address sustainability concerns arising from the energy-intensive facilities.

Take Singapore, a top hub for data centers. In 2019, the city-state imposed a moratorium to moderate the growth of new data centers in an effort to find a balance between environmental sustainability and supporting business needs.

Other countries such as the Netherlands and Ireland have also paused new builds to reduce the strain on power grids.

But in most cases, construction has resumed. In July, Singapore awarded 80 megawatts of new capacity to four data center operators as part of a pilot program. Permanently halting construction just wasn’t a viable option amid rapidly expanding data processing needs and storage requirements.

“Governments have the responsibility to manage resources and balance competing demands from different industries,” says Bob Tan, Executive Director, Capital Markets Transactions, JLL.

“This not only includes considerations on energy and utilities consumption, but also land usage and allocation — whether it’s better used for data centers or a variety of other industries such as value-added manufacturing services,” he says.