The Philippine government and the power sector are preparing for a surge in energy demand as the country transitions to an upper-middle-income country (UMIC) by 2025.
“A possible impact of being UMIC on energy is that there will be more economic activities, and our energy consumption will possibly increase,” Department of Energy Undersecretary Rowena Guevara said.
Based on the Philippine Energy Plan 2023-2050, total gross generation is expected to increase at an annual rate of 5.1 percent.
Under the plan, the country’s total electricity sales are seen rising by 5.5 percent annually from its 2022 level of 91.3 terawatt-hours (TWh) to 408.1 TWh by 2050, with the Luzon grid capturing the biggest share at 70 percent.
Meanwhile, peak demand is expected to post a threefold increase from 16.6 gigawatts (GW) in 2022 to 68.5 GW by 2050, corresponding to a 5.2-percent annual average growth rate.
“There are studies in other countries that show that there is a positive correlation between per capita income and consumption of energy, which increases as per capita income rises. If the Philippines is expected to transition to UMIC status, which means higher GNI per capita and greater prosperity, then we expect a more robust economic growth and accordingly higher demand for power following some empirical findings,” former DOE Undersecretary, Divina Law senior partner and Developers of Renewable Energy for AdvanceMent Inc. (DREAM) president Jose Layug Jr. said.
DREAM is the umbrella organization of all renewable energy associations in the Philippines.
“Given this, the power industry, in collaboration with the Philippine government, must ensure sufficient supply of power to meet the growing demand as the country reaches UMIC status,” Layug said.
Meralco PowerGen Corp., the power generation arm of the country’s biggest power retailer Manila Electric Co., said the power sector has a significant role to play once the Philippines achieves the UMIC status.
“We are excited to hear NEDA’s pronouncements that the country is on track of reaching its goal of becoming an upper-middle-income country by 2025. As a partner of government, we remain supportive of the administration’s initiatives that will propel our country towards a brighter and sustainable future,” Meralco PowerGen president Emmanuel Rubio said.
“Mindful of the role of the power sector and how affordable energy plays a significant role in breaking free of the so-called ‘lower middle-income trap’ — we continue to invest heavily in our balanced energy strategy that maximizes advanced thermal technologies to support our baseload requirements while we continue to advance the with our aspiration to transition to clean and renewable energy. Our robust pipeline of projects is key in increasing the country’s current power supply which is seen to impact cost and spur economic activity,” Rubio said.
