Powering data centers in emerging markets

Key insights

1. Flexibility is the decisive factor. The next generation of AI data centers will succeed where energy supply can adapt — through hybrid microgrids, storage, modular expansion, and regulatory regimes that reward demand responsiveness.
2. Siting choices will shape regional economies. The most successful strategies combine high-density interconnection near cities with low-cost compute capacity sited near abundant or stranded renewable power.
3. Workforce and ecosystem readiness are as vital as megawatts. Power and permitting can be solved with capital, but trained technicians and experienced operators take years to develop and must be built locally.
4. The energy and digital transitions must evolve together. Treated as separate silos, both underperform; integrated, they reinforce one another and create infrastructure that powers cleaner, more resilient economies.

Recommendations

1. Align national AI and cloud strategies with power-system plans, publishing corridor-level maps of generation, transmission, and substation capacity.
2. Replace sequential permitting with single-window processes that run environmental, building, and grid-impact reviews in parallel.
3. Enable flexible procurement — corporate power-purchase agreements, hybrid renewables-plus-storage contracts, and participation in balancing and capacity markets.
4. Update grid codes to remunerate batteries and hybrid plants for capacity and ancillary services, following models such as Chile’s storage framework.
5. Adopt climate-specific efficiency standards (e.g., Singapore’s Tropical Data Centre methodology) rather than transposing temperate-zone metrics.
6. Build workforce pipelines through vocational training, apprenticeships, accredited certifications, and partnerships with global operators including pathways for technicians transitioning from power, telecoms, and industrial sectors.