Why energy should be at the centre of emerging countries' economic policymaking

Energy needs to be at the heart of policymaking if developing nations want to navigate the current geopolitical turmoil and tectonic shift in the global economy, experts at the World Utilities Congress told The National on Wednesday.

The sector has emerged as a keystone of economic policy, and countries should realign their strategies to attain energy independence, which will help them cope with future uncertainties, they said.

Emerging economies, in particular, should pay close attention to opportunities within the energy industry and attract more investment, said Roberto Bocca, head of the World Economic Forum's Centre for Energy and Materials.

“If you have a strategic view and approach, you can reposition yourself for the future of your country in line with the new energy system,” he said at the event in Abu Dhabi.

Countries in blocs will benefit if they take a united front, he said, giving the example of the Asean Power Grid, which is being positioned as a resilient electricity infrastructure to drive regional economic growth.

Such initiatives are strategic ways to “make an opportunity out of this [sustainable energy] challenge”, Mr Bocca said.

Emerging economies need to strike the right balance between “affordability and sustainability”, while the developed world is more focused on sustainable energy, Karim Amin, executive board member of Germany's Siemens Energy, said.

That balance will allow emerging economies to “embark on their own journey of economic development and industrialisation”, Mr Amin said.

Data centres 'jumping the energy queue'

The rapid growth of the data centre industry is making striking the right energy balance much more complicated. It is expanding at breakneck speed alongside artificial intelligence and cloud requirements.

“Data centres are making the discussion even more complex because they are jumping the queue,” Mr Amin said. “They want to have all the energy that they can get as fast as possible, and money is not exactly the main hurdle,” he said, alluding to the major investment in data centres by some of the world's biggest technology names.

In general, the bigger the data centres, the bigger their energy need. On a monthly basis, small, medium and large-size data centres are estimated to consume as much as 36,000kWh, 2,000MW and 10MW, respectively, according to industry tracker Data Centre World.

Data centres were thrust into the spotlight again with the recent announcement of Stargate UAE, a mega data centre project to be built in Abu Dhabi by AI major G42, OpenAI, Oracle, Nvidia, Cisco and SoftBank Group. The one-gigawatt compute cluster will operate in the recently established five-gigawatt UAE – US AI Campus.

“When you look at data centres or the AI related to them, a lot of the conversation is around, indeed, the growing demand,” Mr Bocca said.

“The other side of the equation that is maybe less spoken about is [what kind of] optimisation AI can bring [to data centre systems]. There will be adjustments, but in the short run, definitely in some locations there will be increasing demand of energy for data centres.”