GDP growth to push 2025 power demand 5% higher 

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An expanding economy will likely push the demand for power by 5 percent this year, considering that the total value of goods and services produced by the county is forecasted to grow by 6 percent to 6.5 percent, according to online stockbroker colfinancial.com.

Energy consumption is estimated to have reached 101,556 gigawatt hours (GWh) last year, from 95,808 GWh in 2023, data from the Department of Energy showed.

The growth forecast for energy demand is lower compared to 6 percent recorded last year, as a result of ebbing inflationary pressures and higher average temperature. 

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Colfinancial sees power supply to remain ample, with the bulk in increase coming from renewable energy, including an additional 1,200 MW from liquefied natural gas (LNG) from Excellent Energy Resources Inc. Excellent Energy will start to operation this first quarter of this year, with its output likely boosting the baseload supply. 

“However, supply tightness could still occur during the critical summer months in May and June as peak demand is expected to rise due to high temperature and as the output of the country’s hydroelectric power generation plants diminishes,” the brokerage noted. 

Lending credibility to this scenario is the country’s aging baseload power plants that could potentially result in unplanned outages and affect the adequacy of supply, it said.  

Still, electricity prices in the spot market will likely average between P4.5 and P5.5 per kilowatt hour (kwh) should the forecast of a steady supply pan out, according to colfinancial. 

There were fewer instances of baseload plant outages and lower coal prices last year while prices at the Wholesale Electricity Spot Market (WESM) declined by 11 percent to P5.59/kwh for the first nine months.

Colfinancial cautioned that “temporary surges in prices” could still occur this year due to outages caused by the risk of large baseload plants suffering from unplanned outages, considering that 68 percent of the country’s power generation capacity is 16 years or older. 

“Unplanned outages could result in higher WESM prices and benefit companies with capacities that are not contracted (but detrimental to companies which have to purchase replacement power from the spot market),” it said.

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