Meralco expects 5% power sales growth in second half of 2023

By Alena Mae S. Flores – August 6, 2023, 7:25 pm
from manilastandard.net

Power retailer Manila Electric Co. expects power sales volume to grow 5 percent in the second half and 4 percent in the whole of 2023.

“We’re projecting close to 5-percent growth for the second half, mainly driven by residential and commercial still,” Meralco senior vice president Ferdinand Geluz.

“We sort of had some talk with SEIPI president, and he’s confident that semicon might have a rebound towards the latter part of the year,” Geluz said.

Meralco posted consolidated distribution utility energy sales volume of 24,792 gigawatt-hours in the first haf of 2023, up 3 percent from 23,968 gWh a year ago.  Volumes of Meralco and Clark Electric Distribution Corp. also increased 3 percent and 7 percent, respectively.

The higher temperature and humidity during the dry season drove the increase in demand for electricity from the residential segment, while the continuing recovery and growth in the economy were drivers of commercial segment sales.

Sales mix continued to shift towards pre-pandemic levels, with commercial segment accounting for a bigger 37-percent share from 35 percent in 2022.

Share of residential was the same at 35 percent, while industrial sector’s share slipped to 28 percent from 30 percent.

Meralco expects core income to reach “north of P30 billion” this year on the back of its strong financial performance in the first half.

Consolidated core net income in the first six months reached P19.2 billion, or 47 percent higher than P13.1 billion realized in the same period last year, driven by the 186-percent increase in contribution of the power generation business.

Meralco chairman and chief executive Manuel Pangilinan said there was no “quick fix solutions” and “no magic bullet” to the country’s power needs.

“We get excited about new technologies right, simply because it’s new. Nuclear, hydrogen, ammonia, everything under the sun that scientists or magicians can conjure up. But the reality is that is not what this country needs and these are not quick fix solutions,” Pangilinan said.

He said the Philippines needed conventional power solutions to support large industries and power users such as data centers to thrive.

“What this country needs where there is a very thin margin of supply to demand are very conventional power plants. Probably gas more than coal. So we have to approach it on that basis. Everybody wants a quick fix solution. There is none,” Pangilinan said.

“These are the things that Meralco should be focusing on. New plants, new gas plants, existing gas plants, if you can buy into them, why not right? Because that is needed by the country as a very basic need,” he said.

He said government should also relax some rules to help the private sector manage risks.

“At the end of the day, it is private sector money that will be put into these generation plants, whether it’s coal, gas, solar or wind, whatever. And it will be the private sector, and quite rightly, should take the risk alone, no government funding, no government guarantees, no government subsidies. If we fail, we fail,” Pangilinan said.