(First of two parts)

IN BRIEF:

• The global energy landscape is transforming due to rising electricity demand driven by factors such as data center proliferation, electrification, and increased manufacturing, with businesses expected to account for a significant portion of this growth in the Philippines.

• Energy providers must rethink their strategies to meet the complex needs of business clients, focusing on diverse energy sources and customer-centric solutions to capitalize on the growing demand for clean and reliable electricity.

• The Philippines faces challenges such as high electricity costs and grid constraints, but opportunities exist for energy providers to deliver innovative, adaptive solutions that prioritize sustainability, operational flexibility, and customer satisfaction.

Globally, the energy landscape is undergoing a profound transformation, with businesses at the forefront of rising electricity demand. Factors such as the proliferation of data centers, increased electrification, and heightened manufacturing activities have led to unprecedented growth in electricity consumption. As companies navigate uncertainties and shifting trade dynamics, they are prioritizing energy strategies to secure their operational futures.

This surge in demand presents a unique opportunity for energy providers and the broader energy ecosystem. However, many providers focus primarily on residential consumers, leaving the complex needs of business clients untapped. While it is happening in the global stage, the Philippines is at a strategic position to capitalize on this opportunity.

During the Philippine Energy Transition Dialogue on Sept. 2, Energy Secretary Sharon S. Garin reaffirmed the government’s commitment to energy transition and stated, “We are serious, not just the government but also the private sector, in making this country greener and more secure as far as energy is concerned.” To seize this opportunity, energy providers and other stakeholders along the entire value chain must be willing to rethink their approach, exploring diverse energy sources and redefining their roles in the energy landscape.

The important question now is, “How will the Philippines drive sustainable energy solutions?”

THE GLOBAL PERSPECTIVEThe demand for industrial electricity is expected to escalate significantly, with businesses driving much of this growth. Research by the EY Navigating the Energy Transition research program, which has surveyed nearly 100,000 residential energy consumers and more than 2,400 energy leaders and decision-makers across eight countries (Australia, Germany, Canada, Ireland, UK, US, Sweden, and Malaysia), indicates that three-quarters of the projected increase in electricity demand will come from business customers. Factors such as the adoption of electric vehicles (EVs), advancements in technology, reshoring of manufacturing, policy mandates, and the need for new equipment are contributing to this trend. In fact, 80% of businesses anticipate an increase in their electricity consumption within the next three years.

In the Philippines, these global trends are playing out against a backdrop of rising electrification and an ambitious green energy transition. With the recent Power Development Plan (PDP) 2023-2050, the Department of Energy (DoE) projects peak demand to grow from 16,596 megawatts (MW) in 2022 to 68,483 MW by 2050, an annual average increase of 5.2%.

The following are some of green reasons that drive the enterprise load in the Philippines:

• Electrification of the transport sector: Since the passing of the Electric Vehicle Industry Development Act (EVIDA), EV adoption has seen increasing numbers and is expected to move from niche to scale. EVs will be accompanied by 7,300 charging stations targeted to roll out by 2028.

• Growing digital economy: The Philippines has been beefing up its data infrastructure with 300 MW in the pipeline. Currently, data centers are housed in Cavite, Laguna, Rizal, Tarlac, and Metro Manila. The data center market is projected to approach $2 billion by 2030 driven by surging digital demand and hyperscaler interest.

• Industry-led growth: Simultaneously, businesses are increasingly sourcing renewable energy through programs like the Green Energy Option Program (GEOP) which allows firms to cut costs and significantly reduce emissions while ongoing industrial modernization is on the way.

These are a few of the several reasons why the industrial electricity demand is expected to spike in the next few years. Persistent grid constraints and limited digital customer solutions remains pain points, creating both urgency and opportunity for energy providers to deliver smarter, more resilient, and customer-centric offerings.

This means that businesses will not merely consume more electricity; they will call for more dependable, more predictable, clean electricity, delivered with new and better services front-lined both by the public and private sectors.

MEETING THE CHALLENGE OF EVOLVING ENERGY NEEDSThe Philippines has some of the region’s highest electricity costs, largely because the grid is powered by imported fossil fuels, exposing users to global price volatility and recurrent rate spikes. That cost pressure comes in addition to increasing climate risks and grid resilience challenges, especially in high-density hubs like Metro Manila, where outages and dry-season peak cooling demand affect productivity and margins. In this regard, additional businesses are in search of affordable decarbonization options that minimize costs, emissions, and increase resilience.

Global utility trends project that suppliers must return to focusing on customer needs and framing sustainable solutions in terms of language that speaks to fundamental values and cost-effectiveness. Filipino consumers, for example, prioritize integrity, customization, and compassion throughout the service journey — expectations increasingly prioritized with energy partners.

In the Philippines, the winning players that will secure and hold onto business customers will not be those who simply sell kilowatt‑hours. They will be the ones who provide guaranteed savings, operational flexibility, and quantifiable emissions reductions — all wrapped in a modern, customer‑centered experience. With facilitating policies, favorable economics, and an engaged innovation environment, energy providers have the opportunity to develop sophisticated, adaptive, and data‑replete solutions to address the diverse requirements of businesses. They will need to adapt and evolve in order to transition with credible, customer‑centric offerings.

In the second part of this article, we will discuss the evolving role of energy providers as they seek to enhance their offerings and better serve business clients by focusing on customized solutions, digital innovation, and strategic partnerships that align with the growing demand for clean energy and operational flexibility.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

Smith C. Lim is the energy sector leader and a strategy and transactions partner, and Chip A. Maalihan is a strategy and transactions associate director, both of SGV & Co.