Analysis: The hidden costs of Indonesia’s data center gold rush
Indonesia wants to ride the global data center boom, betting that investment, skilled jobs and computing power for artificial intelligence will drive economic growth. But the cloud leaves its imprint on the ground: Data centers consume vast amounts of electricity and water and can expose surrounding communities to heat and noise. The question is whether the government will make this boom work for…
Indonesia is embracing the global data center boom, anticipating that investment, job creation, and computing power for artificial intelligence would spur economic growth. However, this surge comes with significant environmental and social costs. Data centers require massive amounts of electricity and water, and can contribute to heat, noise pollution, and potentially displace local agriculture.
As of July 2025, the country's data center capacity stood at 650 megawatts, with a projected need of 1.5-2 gigawatts by 2026. State utility PLN had already linked 159 data center customers to nearly 2,000 megavolt-amperes of electrical capacity, mostly on the Java-Madura-Bali grid. Another 2 GW of projects were under construction or planned.
While there is a strong economic case for this growth, the government risks leaving communities to bear the environmental and infrastructure burdens if it does not prepare the necessary power networks, water supplies, and surrounding areas. The government must ensure that the expansion of data centers benefits the public, not just the economy, by preparing for the increased demand and mitigating the negative impacts on electricity grids, land, water resources, and surrounding communities.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
