THE growth of the renewable energy (RE) sector could accelerate faster than anticipated with new investment interest coming from hyperscale data companies, the Department of Energy (DOE) said.
According to Energy Undersecretary Rowena Cristina L. Guevara, these hyperscalers want RE to power their servers, storage drives and other IT devices.
Guevara cited a forum for hyperscale developers she participated in and learned “that each of them requires eight megawatts (MW) to 125MW per facility.”
“And they want RE.”
The demand is miniscule as Guevara pointed out that there are islands in the country that register a total demand of only 8MW.
“If we’re going to become the hub for hyperscale data centers, the requirement is very high for RE and it’s a good opportunity for us,” she said.
Guevara said she requested interested hyperscalers to submit a roadmap so that the DOE can match the electricity demand with the supply from renewables.
“They promised to come up with a map. It will take them time. They will organize themselves as an industry and then maybe send us their request,” she said.
The DOE official noted that this marriage of technology and sustainable energy offers a promising path for an eco-friendly future.
Total capacity
THE Department of Information and Communications Technology (DICT) estimates that the total capacity of the country’s data centers is expected to grow fivefold by the end of 2025, reaching 300MW.
A report from the International Energy Agency (IEA) stated that data centers consumed 460 terawatt hours (TWh) in 2022. This could possibly go up to more than 1,000TWh by 2026.
The projected electricity usage, the IEA said, may depend on “the pace of deployment, range of efficiency improvements, as well as artificial intelligence and cryptocurrency trends”, the report said.
The IEA report also predicts that the growth of RE production will accelerate, with a strong possibility that renewables will overtake coal to generate more than a third of the global electricity by 2025.
If the Philippines would be chosen as the data center hub in the region, Guevara said the DOE must pursue the Clean Energy Scenario (CES) 1 or CES 2.
The CES 1 is “high RE with low offshore wind (OSW) plus nuclear plus coal repurposing,” which targets over 50 percent RE share by 2050, including nuclear—1,200MW (8 x 150MW small modular reactors) by 2032, additional 1,200MW by 2035 and another 2,400MW by 2050, and 19 gigawatts (GW) of OSW, along with coal repurposing.
The CES 2, meanwhile, is the “high RE with high OSW plus nuclear plus coal repurposing, which is similar to CES1, except that OSW will be 50GW.
Transition strategies
THE DOE is actively pursuing four energy transition strategies in line with its goal to provide affordable, sustainable, and sufficient power supply to the country.
These are accelerated RE development, smart and green transmission system, building of port infrastructure for OSW, and voluntary early decommissioning and/or repurposing of existing coal-fired power plants.
“The DOE is actively seeking partnerships to fund our energy transition strategies. Accelerated RE development is funded by the private sector while the smart grid plan, OSW ports, and voluntary coal plant decommissioning can be supported by private sector investments, grants, of ODA from bilateral and multilateral development partners.
We urge energy transition funders to consider these strategies for a low-carbon energy future,” Guevara said.
Heightened enthusiasm
LAST week, the DOE conduct a business-to-business (B2B) matching event to assist foreign investors in finding local partners to support the country’s energy transition program. The event was meant to assist investors, listen and understand the challenges in implementing RE projects, and facilitate addressing their concerns.
It was attended by 206 RE developers, representatives from 40 banks and multilateral agencies, and 65 engineering, procurement, and construction (EPC) firms.
“There is a heightened enthusiasm from international investors for unlocking the country’s RE potential, and we are linking them with financing institutions, development organizations, concerned government institutions, and EPC companies for potential partnerships and access to financing,” DOE Secretary Raphael Lotilla said.
The Philippines has abundant potential indigenous RE sources. As of January 2024, the DOE has awarded 1,267 projects with RE Service Contracts with a total potential capacity of around 129,000MW covering various technologies. Their full development would benefit from partnerships among various private businesses.
“To meet our energy transition goal, we are utilizing this platform where participants can identify potential business partners, investors, expertise, technologies or business strengths,” Lotilla said.
The government has taken strategies and milestones crucial to the country’s green energy future. These efforts have been recognized in the 2023 BloombergNEF’s Climatescope Report, which ranks the Philippines fourth globally after India, China, and Chile as one of the most attractive emerging markets for RE investments.
In particular, the Philippines stands out as one of the few economies that have implemented auctions, feed-in-tariffs, net metering schemes, tax incentives, and a strong target for RE.
In the 2023-2050 Philippine Energy Plan, the DOE targets 35 percent RE share in power generation by 2030 and 50 percent by 2040.
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