Philippines Power Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Philippines Power Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Philippines Power market is expected to register a CAGR of more than XX% during the forecast period of 2022-2027. Due to the COVID-19 pandemic, the power consumption in 2020 decreased, and according to the Philippines Department of Energy, the power consumption decreased to 101.76 terawatt-hours in 2020 compared to 106.04 terawatt-hours compared to the previous year. Further, the growing demand for electricity due to rapid industrialization and urbanization will aid the development of the market. In addition, the growing demand for renewable energy in the country due to limited fossil fuel on the island is going to be a major driver for the market. However, according to the International Trade Administration, the Philippines is facing a mounting energy crisis due to an administration-mandated infrastructure boom and high electricity costs in Southeast Asia.

Key Highlights

• Renewable energy is expected to grow to be the fastest growing market in the nation due to the growing demand for clean energy to reduce carbon emissions in the nation.
• Solar distributed energy is one of the major opportunities in the nation, as renewable energy is growing at a relatively lower rate than the nations, and distributed solar energy can provide electricity to rural areas spread across 7,000 islands in the Philippines.
• Thermal power will play a key role in providing energy and meeting the growing demand for energy in the business.

Key Market TrendsRenewable Energy Growth in the nation

• The Philippines is a tropical country consisting of thousands of islands in the pacific ocean. The country has abundant renewable energy resources and limited availability of fossil fuels, which is not reflected in the current energy use patterns. The bulk of electricity generated in the country comes from coal-fired power plants.
• Moreover, the country is a signatory of the Paris Climate Agreement 2015, where the primary objective is to reduce the threat of climate change by limiting increasing global temperatures to below 1.5 degrees above pre-industrial levels. The Philippines has set ambitious plans to become a leading clean energy nation in Southeast Asia, which is likely to foster the growth of renewable energy during the forecast period.
• Although wind and solar PV installations are in the early stages, they are expected to grow rapidly in the coming years as per the country’s development plans. For instance, in 2022, Solar Philippines Neuva to expand its 500 MW solar project to about 3.5 GW solar power.
• Overall, the renewable energy power market is expected to grow in the forecast period in the nation due to the abundance of renewable energy potential coupled with high energy demand.

Thermal Energy to play a vital role to meet energy demand

• The thermal power industry across the Philippines holds a significant market share in the total power generation mix. As of 2020, coal is one of the essential primary power sources for the country. The country also produces natural gas, oil, and other fossil fuels, which account for a substantial share of the total power generation installed capacity. In 2020, the total thermal power capacity driven by coal-fired thermal power plants stood at around 18 GW, which is further likely to increase during the forecast period.
• According to the Department of Energy (DOE), in the Philippines, coal accounted for more than 57% of the total power generation, which is the highest, and natural gas and oil accounted for around 19.2% and 2.4% of the country’s electricity generation mix in 2020. Power generation from coal-fired power plants has witnessed a rise of more than 50%, from 36.69 million MWh in 2015 to 58.18 million MWh in 2020.
• The DOE is keenly aiming to increase the coal reserves to 766 million metric tons (MT) by 2030, which might stimulate the nation’s indigenous supply of energy. This is likely to increase domestic coal production resulting in reduced dependence on coal imports. This goal for sustainable development includes proper monitoring of the coal stocks and the changes to these stocks caused by the extraction of coal.
• Overall, the growing electricity demand in the nation is expected to be primarily met by thermal power systems in the forecast period.

Competitive Landscape

The Philippines Power Market market is moderately consolidated. The major companies include San Miguel Corporation, AboitizPower Company, First Gen, Power Sector Assets and Liabilities Management Corp. (PSALM), and DIANTER Renewable Energy Resources Philippines.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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