A comparative review of energy efficiency, coastal economies and the digital blue economy
Abstract
The rapid expansion of cloud computing, artificial intelligence and data-intensive digital services has turned data centers into strategic energy-market assets. Conventional land-based facilities require electricity not only for computation but also for cooling, grid resilience and thermal risk management. Underwater data centers are emerging as an alternative infrastructure model in which sealed server modules are deployed in marine environments to exploit naturally cooler seawater conditions, reduce cooling intensity and support coastal digital infrastructure. This review article examines the potential economic impact of underwater data centers on global energy markets, coastal regions and the wider digital blue economy. Using a qualitative review and comparative case-based approach, the article analyses the United States, India, Indonesia, the United Arab Emirates and Brazil as representative advanced, developing and emerging economies. The review argues that underwater data centers should not be assessed only as a technical innovation. They should be understood as a spatial and economic reconfiguration of digital infrastructure, electricity demand and coastal development. The findings suggest that advanced economies may benefit mainly through efficiency gains and grid relief, while developing and emerging economies may gain through coastal infrastructure investment, digital-service expansion and renewable-energy integration. Environmental governance, capital intensity, seabed regulation, cybersecurity and limited commercial evidence remain critical constraints. The review is guided by a socio-technical transition perspective and applies a structured qualitative literature review with comparative country analysis.
Keywords: Coastal economies, data centers, digital blue economy, energy markets, offshore infrastructure, underwater data centers,
- Introduction
Digital infrastructure is among the key pillars for modern economic growth. Data centres deliver computing power, storage capacity and connectivity for different applications such as cloud computing, artificial Intelligence, digital finance, platform based commerce and digitalization and automation in the public and industrial sectors. As the digital economy continues to take off, data centres have become more than just engineering solutions out of the purview of economists and policy makers. They start consuming a lot of electricity and also make a significant contribution to infrastructure investments, and they are significant contributors to regional competitiveness. The growth of demand for high density servers, power supply and cooling systems has been compounded by the arrival of AI. Access to land and network latency alone is no longer the only determinant for the geography of data infrastructure; energy access, cooling requirements, and water availability and environmental regulation are also important.
This is a tremendous energy challenge. By 2024, the electricity usage of the world’s data centres is estimated to be approximately 1.5% of worldwide electricity demand, equivalent to around 415TWh. At base case, the demand for energy is projected to reach around 945 TWh by 2030, equating to less than 3% of overall electricity consumption, and the energy demand of data centres is expected to grow at a rate of ~15% per year from 2024 to 2030 (International Energy Agency [IEA], 2025). The U.S. is especially important, as the IEA predicts the demand for electricity from data centers will increase around 240 terawatt-hours, or some 130%, from 2024 to 2030. Furthermore, the United States Department of Energy estimates that data centers could consume as much as 9% of all electricity produced in the United States in 2030, in comparison to 4% in 2023 (Department of Energy [DOE] 2025). Statistics tell the story: data centres are not outlier information technology facility anymore, they are a structural component of the planning of the electricity system.
The energy characteristics of the data centre have been clearly established in the literature. Electricity is essential to a data center for computing, storage, network, power conversion, backup power, and cooling. Cooling is one of the major problems: heat from a server can impact performance, equipment longevity and failure. The attention of research now has shifted to energy efficiency in software, optimisation of workload, and energy-efficient hardware design and cooling to support sustainable digital infrastructure (Bharany et al., 2022; Ewim et al., 2023; Katal et al., 2023). However, more recently, it has been suggested that the impact on the environment of computation should be taken into account on several aspects of hardware architectures, software systems, energy sourcing, and embodied carbon and lifecycle assessment (Gupta et al., 2022; Lee et al., 2025). The underwater data centers are a special infrastructural experiment, altering the spatial and thermal sets of digital computation.
Under water Data centers are computing devices that are housed in a containment structure that has water, typically in the ocean bottom or near the coast, running through it. They refer to the basics of economics: that marine environments offer natural cooler and thermally stable environment which could lower the need for thermally intensive mechanical cooling. The undersea model also provides opportunities for nearness to offshore renewables, subsea cables and ports and coastal technology hubs. For example, in its Project Natick, Microsoft has proved that a data-center module can be placed under water technically. According to the project, undersea modules would be ready to deploy in less than 90 days, and they would only have a 12.5 percent chance of failure compared to the same type of data centers in land and would not require any water during operation (Microsoft, 2020). Engineering studies have also been conducted on the design of the vessels, as well as the packing and cooling of the servers under water (Hu et al., 2022; Sutherland & Bopp, 2023). The results tackle important policy questions concerning the future of digital infrastructure and electricity markets, and coastal economic development.
The relevance of this topic is the data, energy and geography as they evolve. Typical data centres are typically situated close to the fibre routes, inexpensive land, inexpensive electricity, enterprise customers, or cities. The underwater data center can begin to shift the geographies of the data center by placing the data center nearer the coastal geographic regions, offshore energy systems and maritime infrastructure. Neither underwater nor nearshore datacenters will have any impact on urban grid peak loads if they reduce the consumption of cooling power. They could be combined with offshore wind, floating solar or tidal energy or coastal microgrids, which may lead to new investment formats for renewables. They may be generating new economic value in coastal areas if they need the services of specialist marine engineering, subsea monitoring, robotics and port services. The mechanisms point to the potential for underwater data centres as a digital part of the blue economy where marine infrastructure can be leveraged to deliver digital services, energy transition and regional development.
Economic studies related to underwater data centres are scattered. The rest of the current literature is not from the energy-economics field, but rather from other fields of scholarly literature, including engineering, media studies, environmental management, cloud-computing, or regional-development studies. In underwater data centers, Hu et al. (2022) do server packing and cooling engineering analysis of a data center vessel. Sutherland and Bopp (2023) look at subsea data centres in relation to infrastructural futures. Abner and Bauk discuss the surveillance, monitoring and environmental management of the Baltic Sea. Less research exists that combines these with a comparative economic perspective, and that connects underwater data centers with energy markets, coastal places and macro-level development plans.
This gap is significant because existing research has not yet sufficiently integrated the technological feasibility of underwater data centers with their wider economic effects on electricity markets, coastal infrastructure planning, renewable-energy integration and the digital blue economy. The present review therefore positions underwater data centers as a multi-dimensional infrastructure phenomenon rather than as a narrow engineering solution, and it contributes by linking data-center siting, marine thermal conditions, energy-market pressures and coastal-development pathways within a comparative country-based framework.
The potential economic impact of ocean-based data centres on global energy markets and coastal economies will be the main topic of this article. It includes a comparative analysis of the five countries: the United States as an advanced economy and the largest cloud-computing market; India and Indonesia, as developing economies with long coastlines and rapidly increasing digital demand; and the United Arab Emirates and Brazil as emerging economies with coastal assets, renewable-energy potential, and digital diversification goals. The article did not state that underwater data centers are a fully-fledged industry on a global scale. Rather, they are seen as a new type of infrastructure, which could have economic implications for energy efficiency and regional development and the digital blue economy.
The definition of the underwater data centres is a modular computer center that is being installed underwater and used by servers, storage devices and network equipment. The key point of their design is that they’re underwater, but they’re taking advantage of the marine environment as a part of the thermal-management solution as well. With air conditioning, liquid cooling or evaporative cooling systems, or a combination of these, data from land use data centers is gathered on the heat generated by servers. These systems also require energy and in some instances water in order to function. The temperature of the naturally cooler and more stable seawater is expected to help ease this “cooling load” in underwater data centers. This is a new paradigm of the infrastructure of computing in which the “place” of computation is tightly coupled with the ocean.
The underwater data center is an intricate enclosed container from an engineering standpoint. It should provide protection against corrosion, pressure, biofouling and mechanical damage to the servers by sea water and it should also transfer heat to the outside marine environment. According to Hu et al. (2022), the underwater data center is a ship equipped with cold ocean water cooling system and computation servers. Their tasks are mainly related to the installation of the server cabinets in the ship, taking into account cooling performance. This is important since there is still a need for thermal design for internal use when deployed underwater. How efficient and reliable the servers are packed, how much water is required for cooling and how far apart the racks are placed all have an impact. Underwater data centers are a combination of computer technology, shipbuilding, thermal facilities and marine activities.
The idea of the water datacenter is an economic idea and cooling is a strategic input in the digital economy. Typically, economic thinking perceived data centers as land and power hungry facilities and Skilled labour intensive. High density computing, however, is also a production factor with regard to thermal management. Inadequate cooling results in higher operating cost, higher failure rates and lower number of servers per rack. Competitive cooling helps to lower operating costs, enhance reliability and increase computing capacity. The underwater data centre takes the problem of cooling out of a building and makes cooling into an economic opportunity to the site. Coastal access and sea-temperature conditions can then be part of a future data infrastructure site location theory.
It doesn’t mean that power savings cannot be achieved when it comes to underwater data centers. Power is still required for servers to process data, store data and communicate with each other. Furthermore, power delivery, monitoring system, underwater cables, deployment vessels and maintenance operations are needed for underwater facilities. The economic argument is more specific: a data centre in the deep can decrease the cooling electricity usage and part of the electricity demand can be displaced from urban mechanical cooling to coastal or offshore energy systems. Because an oversell of zero energy and/or 100% sustainable data centres can compromise the credibility of the case. A careful economic analysis should be on the “site” from which the savings are to be drawn, perhaps the amount of the savings, possibly the conditions under which the savings can be obtained, and the additional costs which will have to be paid.
Water-based data centers also raise issues of the temporal and spatial politics of infrastructure. Data centres can be considered technical buildings or also infrastructures with its own temporality, investment cycles and social impact, as Velkova and Plantin (2023) explain. Sutherland and Bopp (2023) extend this: They look at the project Natick as an experiment in the visualization of future digital infrastructures in the oceanic space. The ideas shared below are relevant since underwater data centers are not simply relocating servers from land to sea. They develop new connections and interactions among digital media, maritime governance, energy infrastructure and the monitoring of the environment, and coastal communities.
The underwater data-center model is also connected to the edge computing and underwater digital applications. The review paper by Periola et al. (2022) describes underwater applications of computing in the ocean such as low latency applications in underwater sensor networks and ocean monitoring; computing in the ocean is used for these processes in underwater applications. Underwater digital-twin sensor networks are gaining more importance in the processing of data in marine systems, which is explored by Lv et al. (2022). The results indicate that the general cloud workloads could be used in underwater data centres, but also in the powering of marine science, offshore energy, defence, shipping, environmental monitoring and autonomous underwater systems. This adds additional value to them, apart from the existing cloud hosting solutions.
Overall, the message is that the undersea data centers are in the middle of three major transitions. The first is the digital transition, which is spurred by AI, cloud and data-intensive services. The second is the energy transition that is defined by the decarbonisation of energy supply, integration of renewable energy and modernisation of the energy grid. The third is the blue-economy transition, where coastal and marine resources are increasingly used for sustainable economic development. Perhaps one of the infrastructure options that will take on more significance in the future is underwater data centers. Figure 1 shows the suggested economic mechanism.
Author Name: Singhar Khowaja
Supervisor: Dr. Nurhanani Binti Romli
Institution Name, Malaysia
Corresponding author: [email protected]
Contact No# +92 337 7776662
