AI data center boom needs renewables — IBM Consulting

By Sheldeen Joy Talavera, Reporter

RENEWABLE ENERGY and battery energy storage systems will be critical to meeting the Philippines’ rising electricity demand from data centers as artificial intelligence (AI) adoption accelerates, according to an IBM Consulting executive.

“We must take this opportunity to make sure that most, if not all, the data center electricity demand is being powered by renewable energy,” Arun Biswas, IBM Consulting’s Asia-Pacific leader for strategic engagements, said in an interview with BusinessWorld. IBM Consulting is the professional services and consulting arm of International Business Machines Corp. (IBM).

Mr. Biswas said battery energy storage systems would also be needed to address the intermittent nature of renewable energy and help maintain grid reliability.

“You’ll also need to invest in storage systems so that they’re able to store electricity when it’s being generated and use it when it’s needed,” he said. “And you will also need to bring in a much more sophisticated way of balancing the loads in the grid.”

He said the growing demand for digital infrastructure presents an opportunity to accelerate renewable energy deployment, including developing solar and wind farms near data centers.

The Department of Information and Communications Technology (DICT) expects the country’s data center capacity to reach 1.5 gigawatts (GW) by 2028 as more operators establish facilities in the Philippines.

Mr. Biswas said the Philippines is becoming an attractive location for data centers because of its growing digital economy, improving connectivity, and large consumer market.

At peak electricity demand of 19 GW to 20 GW, data center consumption would account for about 7% to 8% of total capacity.

As rising demand from data centers could strain the power system, Mr. Biswas said AI could also help improve energy efficiency.

“This is where the paradox of AI comes in, because AI is part of the problem, it’s also part of the solution. So, on one hand, it consumes energy, but on the other hand, if deployed correctly, it can actually help,” he said.

Asked whether the country’s energy system is ready for AI-driven electricity demand, Mr. Biswas said, “At the moment, it is not,” adding that it must be “substantially upgraded to meet the needs of AI.”

He said operational technology systems should be integrated with information technology systems so that physical grid assets can communicate and share data with computer-based management systems.

“Once you do that, then you need to think about how to deploy AI on top of the digital infrastructure to actually help balance the operating complexity of the grid. That is how you will be able to harness the full power of AI, not in isolated fashion but as an intelligence layer for the entire energy system,” he said.

Mr. Biswas said establishing the right energy foundations by expanding renewable energy capacity and effectively integrating it into the grid would create a “positive flywheel.”

“So, holistically, if you get all of these things right, I think the Philippines is a bright, bright future and it’s a great opportunity at this point in time for the Philippines to take the lead here,” he said.