Middle East & Africa Green Data Center Market - Industry Outlook & Forecast 2022-2027

Middle East & Africa Green Data Center Market - Industry Outlook & Forecast 2022-2027

The Middle East and Africa green data center market is expected to grow at a CAGR of 14.81% during 2022-2027.

MARKET OUTLOOK

Major cloud service providers in the region expect to expand their presence during the forecast period, which enhances the demand for wholesale colocation services in the region. The Middle East and Africa green data center will witness investments from cloud service providers, such as Google, Amazon Web Services, Microsoft, Oracle, and Tencent. The UAE, Saudi Arabia, Kuwait, Bahrain, Oman, Turkey, Israel, Qatar, South Africa, Kenya, and Nigeria witnessed commercial investments in deploying the 5G network.

KEY HIGHLIGHTS

• The Middle East and Africa green data center market account for around 10% of the overall data center market in the region. The region, primarily Africa-based countries, has been slow in adopting efficiency in operations due to lower fund availability. However, investment is expected to grow with more funding flowing into the industry and global operators entering the market.
• Colocation operators in the Middle East and Africa green data center market, such as Equinix, Moro Hub, Digital Realty, Gulf Data Hub, and Rack Centre, have been investing in efficient operations to achieve their sustainability goals.
• Innovations in green operations are also being explored. For instance, Saudi Arabia is exploring free cooling using salt and sunlight, wherein this electricity-free cooling technique is being developed at King Abdullah University of Science and Technology (KAUST).
• The increased hyperscale data centers in the region and the need to power the facilities with renewable energy will also be a significant revenue boost for renewable energy suppliers and energy companies.

MARKET SEGMENTATION

Segmentation By Infrastructure

• Electrical
• Mechanical
• General Construction

Segmentation By Electrical Infrastructure

• UPS Systems
• Generators
• Other Electrical Infrastructures

Segmentation By Mechanical Infrastructure

• Cooling Systems
• CRAC & CRAH Units
• Chiller Units
• Cooling Towers & Dry Coolers
• Other Cooling Units
• Racks
• Others Mechanical Infrastructure

Segmentation By Cooling Technique

• Air-based Cooling Technique
• Liquid-based Cooling Technique

Segmentation By General Construction

• Core and Shell Development
• MEP & Architectural Design Services
• Physical Security
• Fire Detection & Suppression
• DCIM/BMS

Segmentation By Geography

• Middle East
• Saudi Arabia
• UAE
• Other Middle Eastern Countries
• Africa
• South Africa
• Other African Countries

PUE of Data Centers is Decreasing?

Data centers operators in the Middle East and Africa region are increasingly targeting a PUE of <1.5, using innovative design, power, and cooling technologies such as hybrid cooling, advanced UPS systems, smart DCIM solutions, and the adoption of renewable energy sources.

Government Interest In Curbing Carbon Emissions Will Drive Middle East And Africa Green Data Center Market Developments

• Several regional governments are driving the requirement for sustainable data center operations to ensure a reduced carbon footprint. Several countries have announced plans to become carbon neutral between 2030 and 2050.
• The Saudi Arabia government aims to achieve net zero emissions by 2060. It is conducting the Middle East Green Initiative (MGI) Summit and the Saudi Green Initiative (SGI) in November 2022 to chart actionable plans to combat climate change.
• UAE has planned to reduce its carbon emissions by 31% by 2030.
• As per the National Determined Contribution (NDC) 2020, South Africa announced that its range of GHG emissions will be between 398 million tonnes of CO2 to 440 million tonnes of CO2 by 2030.
• Governments are also partnering with renewable energy companies to develop renewable energy projects like wind and solar farms.

ELEMENTS OF GREEN DATA CENTERS

Innovations In Power Technologies

• As Lithium and Nickel are essential innovations in batteries, the gulf countries, primarily Saudi Arabia, are investing in mining. It has planned to attract investment of around USD 32 billion in the minerals and mining sectors.
• Lepidico, an Australian company, collaborates with Khalifa Industrial Zone Abu Dhabi (KIZAD) for lithium production in the Middle East. It has acquired over 600,000 square feet of land, aiming to invest around USD 95 million to set up its plants in Abu Dhabi.
• To grow the usage of green energy, in August 2021, an investment of over USD 1 million was made by I-G3N, a battery manufacturer in South Africa.
• In March 2022, Siemens announced that it would provide the first microgrid in Qatar, mostly for industrial use. It has collaborated with Qatar Solar Energy for its establishment. It will ultimately lessen the electricity cost and control greenhouse emissions at its facility in Doha.

Innovations In Cooling Technologies

• The use of free cooling reduces the usage of water and power to cool IT infrastructure. For at least part of the year, free cooling can be explored in various countries that witness colder climates.
• Owing to the hotter climate in most Middle Eastern and African countries, liquid cooling will be one of the better and more efficient techniques to ensure better cooling in data centers operating in the region.

Increasing Modular Data Center Design & Deployment

• Modular data center buildouts tackle challenges such as a high PUE, high operational costs of traditional data centers, and high environmental impact.
• The Middle East and Africa have both witnessed significant investments in modular data center deployment, which offers several efficiency-related benefits, including the opportunity for expansion based on business requirements, and lesser use of cement, among other things.
• MDX-I’s (Equinix) Lekki Data Center in Lagos, Nigeria, which opened in April 2022, has been built as a modular data center facility according to Tier III standards.

Hyperscale Operators Stacking Up On Renewable Energy PPAs

• Google, AWS, Microsoft, Alibaba Cloud, and Oracle are some hyperscale operators in the Middle East and Africa region. They are all aggressively pursuing the adoption of renewable energy to meet their sustainability goals. For instance, in July 2021, AWS signed a deal with TotalEnergies to power its renewable energy operations and expanded its partnership in various regions, including the Middle East.

Renewable Energy Adoption by Colocation Service Providers

• Equinix, Africa Data Centres, Rack Centre, Moro Hub, Gulf Data Hub, Khazna Data Centers, and Digital Realty are some significant data center service providers operating using renewable energy and aiming to be carbon neutral in the Middle East and Africa green data center market.
• For instance, Moro Hub, a DEWA's digital arm Digital DEWA subsidiary, is constructing a facility at Dubai's Mohammed bin Rashid Al Maktoum Solar Park. The carbon-neutral green data center, with a more than 100 MW capacity, will be powered exclusively by renewable energy.

VENDOR LANDSCAPE

Prominent Data Center Investors

• Amazon Web Services (AWS)
• Africa Data Centres
• Equinix
• Future Digital Data Systems (FDDS)
• Gulf Data Hub
• Digital Realty
• IXAfrica
• Moro Hub
• Meeza
• Microsoft
• Ooredoo
• Paratus Group
• Rack Centre
• Raxio Data Centres
• Turkcell
• Google

Renewable Energy Providers

• MASE
• Enerwhere
• SolarWind Middle East
• Yellow Door Energy
• Masdar
• Canadian Solar
• SirajPower
• ACWA Power
• EDF Renewables
• Dubai Electricity and Water Authority (DEWA)
• ENGIE
• AMEA Power
• TotalEnergies
• ACCIONA Energia
• Scatec

KEY QUESTIONS ANSWERED

1. How big is the Middle East and Africa green data center market?

2. What is the growth rate of the Middle East and Africa green data center market?

3. What are the latest Middle East and Africa green data center market trends?

4. Which country holds the largest Middle East and Africa green data center market share?

5. What factors drive the growth of the Middle East and Africa green data center market?