Data Center Boom May Drive Up Philippine Power Prices, PE2 Warns

MANILA, Philippines — The growing data center sector in the Philippines may further strain Filipinos’ electricity supply if the government fails to implement policies to arrest potential price shocks, according to the Philippine Energy Efficiency Alliance (PE2). Global supply disruptions threaten the country, while PE2 warned that data centers’ massive power demand could raise local electricity rates. READ: SE Asia’s data centers need to be planned like public infrastructure Citing data from the International Energy Agency (IEA), global data centers, including in Southeast Asia, growing 70 percent annually, driven by AI. “Data centers are mushrooming almost everywhere, growing in size (especially the hyperscalers), and growing in energy intensity (instead of growing in energy efficiency),” PE2 president Alexander Ablaza said in a message Thursday. The government has been positioning the Philippines as a data center hub. For years, booming fintech, cybersecurity and AI services have driven data center expansion. “The clustering of data centers (i.e., containing them in the same industrial park) pose a major threat to the affordability of electricity prices as they quickly demand new grid capacity upgrades. Up to 30 percent of local grid capacity can be required by data centers,” Ablaza said. “Government policy if done early enough, can mitigate the impacts of DC market growth on the grid,” he added. Ablaza said that the Department of Energy (DOE) can require clustered data centers to build or deploy their own generation and storage to avoid compromising power for households and businesses. The official said that a single large data center would require an electricity volume enough to energize two million households. Several Filipinos online protested the government’s approval of the US-led Pax Silica hub in Tarlac, citing its projected 3-gigawatt power demand. READ: DOE explores power solutions for Pax Silica The country has designated a 1,620-hectare site in New Clark City in Capas, Tarlac as the proposed location of an AI and advanced manufacturing hub under Pax Silica. DOE officials previously said the agency was already crafting guidelines on how to power the complex. This could include embedded generation, with firms building plants on-site instead of sourcing power from afar. /pai