Philippines Grapples with Worsening Power Shortages, Supply Deficit Hits Nationwide

The Philippines is grappling with a worsening electricity shortage across the nation, with power supply becoming increasingly unstable, particularly in Mindanao and the Visayas. The Wholesale Electricity Spot Market (WESM) has seen unprecedented price spikes, with prices on September 22 reaching P25/kWh in Mindanao and P20/kWh in the Visayas, significantly higher than Luzon's P10.80/kWh. Average prices in August were also starkly high at P19.56/kWh in Mindanao and P18.59/kWh in the Visayas, compared to P4.80/kWh in Luzon. A primary cause of this shortage is the extended maintenance shutdowns of large, aging coal power plants. The Department of Energy (DOE) anticipates the return to service (RTS) of several power plants in Cebu, Iloilo, and Mindanao, but the timeline remains uncertain. The deployment of Battery Energy Storage Systems (BESS) is also underway, though these systems primarily store excess electricity rather than generate it. To combat soaring electricity prices, the Energy Regulatory Commission (ERC) has ordered the regional application of a secondary price cap (SPC). However, concerns remain that price controls are merely symptomatic relief and do not address the fundamental issue of supply deficit. Reflecting on the nationwide blackouts of 1991-1992, the government is exploring a range of short-, medium-, and long-term solutions. For the short term, the Interruptible Load Program (ILP) in the Visayas and Mindanao, proposed by Manny Rubio (President and CEO of Meralco PowerGen Corp.), is gaining support. This program encourages large consumers to switch to their own generators, thereby reducing the burden on the grid. In the medium term, there are calls to lift the moratorium on new coal power projects, which was issued by a former DOE Secretary in 2020. Advocates argue that Visayas and Mindanao require more coal and gas power plants to ensure a stable 24/7 electricity supply, independent of weather conditions. For the long term, a revision of the current agenda to achieve 50% renewable energy (RE) by 2040 is being proposed. Instead, the focus should shift to expanding total electricity generation (TWH) by 50% from the 2025 level. Compared to neighboring countries like Thailand, Malaysia, Vietnam, and Indonesia, the Philippines' total electricity generation remains low. The increasing power demand from major infrastructure projects like the Metro Manila Subway and North-South Commuter Railway, slated to begin operations by 2033, underscores the urgent need for a substantial increase in generation capacity. Recently, President Ferdinand Marcos Jr. visited the Global Technical Center of Excellence (GTCOE), a joint venture between Aboitiz Power Corp (AP) and Japan's JERA, aimed at developing technical talent in thermal power generation. This visit highlights the importance of international cooperation and human resource development in the energy sector. Source: Philstar Business