Prospective investors in data centers and hyperscale computing firms are seeking the Department of Energy’s (DOE) laser focus attention for immediate 500-megawatt power capacity addition in order for the Philippines not to lose multibillion-dollar investments in the information and communication technology (ICT) sector.
The ICT industry players expressed concern that if the energy department cannot commit to rapidly ramping up power capacity, foreign investors may turn their attention away from the Philippines and opt to relocate and invest in neighboring countries, particularly those with reliable and cost-competitive electricity supply.
ePLDT Chief Data Center Officer Gary Ignacio remarked in an interview on the sidelines of the recently ended Power Trends that power demand will climb exponentially. Overall, energy is a foundation for advancement, especially for digital transformation, which requires a lot of energy.
The industry estimates that the ICT sector will require 300 to 500MW of reliable baseload capacity until 2026, in addition to the conventional capacity of 600 to 800MW required to support the country’s economic growth aspirations.
“We’re at the growth stage, because if we look at total capacity, we’re still at sub-100 to maybe a little over 100MW. Clearly, that’s just for commercial data centers, not even counting yet the smaller ones that each company operates. So in three years, that can easily grow to 300MW to 500MW if they (targeted investments) happen – because again these hyperscalers are trying to check if the Philippines is going to be the best destination,” said Ignacio.
Ignacio added that whether it is industrial or digital transformation, it would need a significant amount of energy, so it must be prioritized. – “particularly if we want to realize the very bullish foresight of a lot of spectators, the likes of Google, that are around saying — it’s really for us to make things happen.”
He stated that many foreign corporations are keeping a close eye on the Philippines, considering if it is a viable investment site capable of hosting them on fully operational cloud regions and availability zones.
Moreover, Ignacio also stated that other relevant government agencies, primarily the Department of Trade and Industry (DTI) and the Department of Information and Communications Technology (DICT), have already opened the door for extensive discussions on addressing the policy and infrastructure requirements for hyperscale data centers to thrive in the country.
He argued that policies are important because they play a role in how hyperscalers evaluate the country. To put it another way, they consider the incentives scheme, the data privacy scheme, the convenience of doing business, taxes, and the sustainability of their energy use.
However, industry players said that the DOE doors remain closed for prospective investors to knock on, therefore the tough issue of power supply is one key concern that has been delaying investment decisions for many multinational corporations looking to relocate their operations to the Philippines.
Since the development gestation period for base load power plants is typically 4-5 years, the Philippines may already be behind schedule on this actionable item. While solar capacity may be faster to deploy, the intermittent nature of its generation does not provide the kind of power supply reliability that hyperscalers have been pushing for at this juncture, though they do aspire for sustainability in the coming years.