Bangkok: Korn Chatikavanij, deputy leader of the Democrat Party, has raised concerns regarding the worthiness of investing in data centers in Thailand. According to Thai News Agency, Korn shared his apprehensions on Facebook, emphasizing the importance of assessing all aspects before committing to such investments that could lead to irreversible consequences. Earlier this month, the Democrat Party submitted an urgent motion to Parliament, advocating for a special committee to evaluate the cost-effectiveness of data center investments. This issue has since gained significant attention, with proposals emerging to revise the existing conditions.
The current investment landscape, as presented by the government, showcases 54 projects worth 1.7 trillion baht, highlighting foreign interest in Thailand. However, the business structure of these data centers demands substantial capital, with machinery and technology being imported. Profits are primarily repatriated to parent companies, and the employment generated ranges from only hundreds to thousands of positions per project. Concerns linger about what Thailand truly gains in return for the resources expended.
There are also regulatory loopholes, as many projects are categorized as 'warehouses,' bypassing the need for an Environmental Impact Assessment (EIA) despite industrial-level resource consumption. Additionally, the Board of Investment (BOI) recently began considering security deposits and Personal Eligibility (PUE) standards for new projects, but these do not impact already approved projects.
Energy costs pose another challenge. The Ministry of Energy plans to introduce a "Type 9" electricity tariff for data centers due to rising LNG import costs and increased electricity demand. While there is an option for Direct PPA to purchase clean electricity, it is not mandatory, raising concerns about who will carry the cost burden if clean electricity is not utilized.
Furthermore, there is no clear plan for conducting long-term impact assessments before and after operations commence. Korn suggests that Thailand should look to other countries for guidance. South Korea, Japan, Singapore, Malaysia, New York, and the Netherlands have all implemented measures to carefully evaluate and manage data center projects, ensuring resources and public trust are preserved.
Korn advocates for Thailand to seize the opportunity presented by the ad hoc committee to establish clear regulations before both approved and pending projects advance further.