Meralco recalibrates plan on hyperscalers’ RE preference

By Myrna M. Velasco – November 3, 2022, 12:18 PM
from Manila Bulletin

Power utility giant Manila Electric Company (Meralco) will recalibrate its supply portfolio buildup to consider the preference of hyperscale data centers for renewable energy (RE) to power their operation.

“All of the hyperscalers are speaking to Meralco for their power requirements, so we are taking that into account in our rollout as well as in our power procurement plans,” Meralco President and CEO Ray C. Espinosa noted.

The enormity of energy planning adjustment being pursued by the power utility company is aligned with the country’s aspiration to become the hub of hyperscale data centers.

Based on their discussion with all of these hyperscalers, Espinosa said these firms are actually looking at the Philippines as a “destination point.”

“the Philippines is now viewed as a hub for the hyperscaler data center business as well as the fact that 4 to 5 submarine cables are basically landing in the Philippines, so it will represent actually a major, major opportunity for those in the telco space that have data centers like PLDT, Globe and the rest,” he said.

The Meralco chief executive noted that the country is gaining traction in this space because of the power supply snags in Singapore, primarily in its ability to provide RE capacity which is now the leaning of these mammoth data centers in sustaining their operations.

Hyperscale data centers are those companies whose focus are on processing vast data as well as in addressing the storage needs or cloud computing services of businesses, the likes of Amazon, Google, Facebook, Microsoft and IBM.

Meralco Chief Commercial Officer Ferdinand O. Geluz explained that “the buildup in the energy requirement of data centers could come gradually. So what we’re seeing is: ramping on the first year could still be marginal, so the full impact could be in the next five years.”

And since the preference of the hyperscalers would be RE-generated capacity, Meralco indicated it will have to sort out such conditions in its forward energy planning, “because they want renewables source for these data centers.”

The government is vigorously advancing the country’s energy transition agenda that sets preference on renewable energy technologies as the next wave of investments that shall be prioritized in ‘market risk management’ strategy.

The State-underpinned goal will be to hike RE capacity share in the Philippine power mix by 35-percent in 2030; and 50-percent by 2040.

The International Energy Agency (IEA) had estimated that at least 1.0-percent of all global electricity supply will be gobbled up by data centers through year 2025.

As emphasized, the bulk of their energy demand will be channeled to powering servers as well as cooling their systems; followed by their storage drives and network devices.

In the experience of advanced economies like in the United States, roughly two-thirds of their data centers often experience peak in demand – with a power density ranging from 15 to 20 kilowatts per rack.