Robust GDP growth outpaces new power capacity additions
By Myrna M. Velasco – 01 March 2018
from Manila Bulletin
Faster-than-anticipated growths in some segments of the economy, as measured by Gross Domestic Product (GDP) have been outstripping capacity additions in the country’s electricity supply, according to the country’s biggest power utility firm.
As noted by Manila Electric Company (Meralco), it has been manifest from last year that demand growth in electricity seem to be surpassing commercial installations of power plants, hence, this may need closer attention relative to the State’s energy planning.
Meralco Vice President Lawrence S. Fernandez qualified that based on 2017 trends, “grid demand in Luzon had gone up by 2,900 megawatts, but capacity addition was only at 2,600MW – so demand has been outpacing capacity addition.”
In that assessment, he said, “we’re not even considering potential maintenance or replacement of old capacity yet, so the grid itself needs new more capacities – not just this summer, but moving forward if the demand continues to grow.”
On Wednesday (February 28), Luzon grid suffered short-lived power interruptions from 8:17-8:30 a.m. reportedly “due to tripping of the Sual plant.”
Energy Secretary Alfonso G. Cusi indicated that their energy planning has been anchored on 7.0 to 8.0 percent GDP growth and population expansion of 1.3 percent.
The Department of Energy, he added, has also thoughtfully factored in the infrastructure development under the “Build, Build, Build” paradigm of the Duterte administration.
“Power capacity requirements for Build, Build Build is planned on the basis of historical relationship between GDP, population and power consumption,” Cusi expounded.
Relative to recent developments in the power supply-demand terrain, a ‘new king’ in electricity consumption is likewise emerging in Philippine Offshore Gaming Operations (POGOs) amid the perceptible tapering off of demand in the business process outsourcing (BPO) sector.
Meralco Senior Vice President Alfredo S. Panlilio noted “there could be slowdown in sales to BPOs but this will be replaced by POGOs.”
He explained that the decline in BPO demand had been “due to automation and technology disruption, regulatory and fiscal issues, adequacy of qualified human capital and increasing competition.”
POGOs, on the other, are seen as “the fast emerging market with 5.0 to 7.0 percent growth in demand for building spaces in 2017.”
Other factors that could spur hikes in electricity demand would be brisk tourist arrivals, which already reached record level of 6.5 million travelers last year, a significant number of which had been registered with the Entertainment City.
Meralco emphasized that “airline budget fares, the growing number of boutique hotels and condominium units joining the transient hotel networks like AirBnB, provided travelers with more affordable options.”
Industrial sales were also registering parallel uptrend of 5.0 percent annual growth, and driven mainly by semiconductor, food and beverage, and basic metals industries.
“The electronics industry continues to be the country’s top exporter, accounting for around 50 percent of Philippine export volumes,” Meralco has noted.
Continued development of high-rise facilities and ongoing housing and ongoing reconstruction activities across horizontal developments are similarly pushing up electricity demand in the country’s main power grid.
