The power sector is revving for increased demand as the country adjusts to the new normal and allows more businesses to reopen.
As the economy recovers from the pandemic, demand for power from residential, industrial and commercial customers begins to rise, which may lead to a tight supply in the dry months this year.
“Sadly, this is a perennial problem of the power sector. Last year, this also happened,” Senator Sherwin Gatchalian, chairman of the Senate committee on energy, told Manila Standard.
“For the short term, I would advise DOE [Department of Energy] to treat this as a crisis already,” Gatchalian said, citing data from grid operator National Grid Corp. of the Philippines which warned about four weeks of yellow and red alerts by April and May.
“We are talking about four weeks, so in other words, they have to call for an emergency meeting of the owners of the plant and let them commit. First of all, commit that they will not shut down any plant because the forced outages. NGCP loses an average of about 2,000 megawatts in the grid due to forced outages,” said Gatchalian.
Aboitiz Power Corp. president Emmanuel Rubio said that based on projections, the tightening of demand and supply would continue this year as the economy recovers and the country’s natural gas supply is depleted.
“We also expect that supply will even be tighter next year, as we anticipate that new capacities will come by late 2025 or early 2026. We are looking forward to the significant capacity from GNPower Dinginin, which is 1,336 MW. It will play a crucial role in addressing the thin reserves and meeting critical market needs,” Rubio said.
Tetchi Capellan of the Philippine Solar Power Alliance said energy consumption is expected to normalize as the economy rebounds.
“Our current supply to support the economic growth tells us we need to build more power plants. This will be one of the drivers that will propel the growth of the industry,” Capellan said.
Semirara Mining and Power Corp. chairman Isidro Consunji said electricity demand should breach pre-pandemic levels this year, as the government starts to transition its COVID-19 management approach from pandemic to endemic.
“The reopening of borders and easing of restrictions should translate into increased economic activities, particularly in NCR,” Consunji said.
Gatchalian said renewable energy is a growth sector for the sector. “I really see that the future of the world is RE, so you need to make it conducive for RE. But if you look at the RE share [to the generation mix], it went down especially new and variable RE, wind and solar. So we have to make the environment for RE conducive, including hydro,” he said.
RE developers are also optimistic, but the road towards clean energy remains fraught with challenges.
“The transition to renewable energy will continue to gain momentum, as more of the country’s power companies will shift away from fossil fuel developments towards RE,” Solar Philippines founder Lean Leviste said.
Salvador Antonio Castro Jr., president and chief executive of CleanTech Global Renewables Inc. said the road to energy security “will be a long and challenging road.”
“We need a clear policy and new market mechanisms to entice the investors to invest in long-term energy and infrastructure projects,” Castro said.
He said while the Green Energy Auction Program is a start, developers are waiting for the auction mechanism so that they can prepare bids and be part of the solution to the energy shortage.
Triconti Windkraft Group director Theo Sunico said recent policy and regulatory steps allowed the RE sector to be more optimistic.
“I believe that all these global and local industry developments bolstered by a successful roll-out and implementation of the GEAP and the Renewable Portfolio Standards targets will provide the momentum that will help us hit our RE targets by end of the 2020s,” said Sunico.
Capellan said the Philippines should raise its clean energy ambition and act more to achieve the net zero emission future in 2040.
“We have to find a solution allowing greater penetration of RE without compromising grid stability,” Capellan said.
“There is certainty that the policy regime in the next generation will provide incentives that allows private sector to innovate and create solutions that will ensure a net zero emission future,” she said.