Power crunch pushes DayOne and Nxera into separate Sembcorp deals

Asian data center operators' electricity consumption is projected to exceed 1,000 terawatt hours by the mid-2030s, up from less than 200TWh today — and this week two of them, DayOne and Singtel's data center arm Nxera, signed separate memorandums of understanding with Sembcorp Utilities to secure the power their builds will need.

The two deals, announced during Singapore International Energy Week, land at a moment when the region's grids cannot keep pace with AI- and cloud-driven demand. Analysts' fivefold consumption forecast frames the scale of the problem. The more immediate constraint is regulatory: governments in Indonesia, Malaysia and Thailand are replacing open approval regimes with strict mandates on energy intensity, water usage and grid sharing.

That regulatory shift is pushing hyperscalers and data center operators away from total reliance on public grids. The alternatives now on the table include independent power plants, co-located generation and direct private renewable setups, alongside partnerships with utilities to build onsite or dedicated power.

What is Nxera signing up for?

Nxera, Singtel's data center arm, is collaborating with Sembcorp Industries to supply its Singapore data centers with renewable and low-carbon energy.

"AI is driving a step-change in the power needs of data centers, and in a land- and resource-constrained market like Singapore, how we source that power matters," said Bill Chang, CEO of Nxera and Singtel's Digital InfraCo unit.

The companies will explore several specific solutions:

• low-carbon and hydrogen-based power generation
• biomethane-based power generation
• photovoltaics applied to vertical buildings
• imported renewable energy from the 2.2GWp floating solar project at Linggiu Reservoir in Johor, Malaysia

Nxera says these initiatives would reduce its carbon footprint as its operations expand. Chang framed the deal as both an energy play and a resilience one: "Strengthening our energy resilience will be critical to underpinning Nxera's long-term development in Singapore while supporting Singapore's digital ambitions."

Both statements are, for now, commitments to study options. The announcement lists technologies to explore, not contracted capacity or timelines.

How does DayOne's 'Bring Your Own Power' work?

DayOne's MoU takes a different angle: its "Bring Your Own Power" initiative integrates power planning into the earliest stages of data center development, identifying and securing suitable energy solutions before build-out. The stated aim is to reduce risk, navigate increasingly constrained power markets and give customers confidence to scale up.

Under the agreement, DayOne and Sembcorp will jointly evaluate the feasibility and business case for energy solutions tied to agreed projects, along with implementation pathways. The scope covers reliable and cost-effective power solutions, power generation and electrical infrastructure, fuel supply and storage, renewable energy solutions and related technical and operational services, including on-site power infrastructure, renewable supply, and operations and maintenance.

"Scaling digital infrastructure means thinking about the energy pathways powering it from the outset," said Jamie Khoo, CEO of DayOne. "Our approach is to secure the critical resources – including power, land, water, and connectivity – early, so we can execute with speed while building responsibly for the long term."

Khoo added that working with Sembcorp would give the company the opportunity to explore integrated data center, power and energy solutions as it expands across the region.

What track record does DayOne bring?

Unlike a greenfield announcement, DayOne's MoU builds on existing energy arrangements. In Singapore, it already holds a power purchase agreement with Sembcorp for its upcoming SG1 data center, which will run entirely on renewable energy.

Elsewhere in the region, in June the operator announced renewable energy supply agreements in Malaysia covering roughly 1.5GWp of solar capacity and 2.2GWh of battery energy storage under the country's Corporate Renewable Energy Supply Scheme (CRESS). It has also signed a power purchase agreement to supply renewable energy to its Chonburi Tech Park data center campus in Thailand.

DayOne aims to source 100% of its energy from renewable sources by 2030 — with the caveat, stated by the company itself, of "where market conditions allow."

That qualifier matters. Both MoUs are exploratory frameworks rather than binding supply contracts, and neither announcement specifies capacity, cost or delivery dates. What they do signal is that in Southeast Asia's data center market, power procurement has moved from an afterthought to the first item on the development checklist — and utilities like Sembcorp are now positioned as gatekeepers to the region's build-out.