Electricity supply and consumptionThe total power capacity in the country, both installed and dependable, was composed primarily of fossil fuels. Despite its environmental implications, fossil fuels, particularly coal, had been the biggest source of electricity in the Philippines. The country’s reliance on coal was evident from its total consumption figures, which was about twice the volume of coal produced domestically. Hence, it resorted to coal imports to meet its demand, leading to increased electricity rates for its residential consumers. Along with coal, natural gas contributed about a quarter of the total power generated in the Philippines, which was primarily supplied by the Malampaya offshore gas field.
While there had been considerable increases in the total power capacity of renewable energy sources, particularly hydro and solar energy, fossil fuels were still pegged as the main source of power. This was largely due to the inconsistency and higher costs of generating electricity from green sources. Currently, renewable energy sources had an electricity capacity share of about 26.5 percent, reflecting a decreasing share since 2015. To address this, continued efforts to strike a balance between electricity generation from renewable energy and fossil fuels is required. In particular, this means regulatory shifts and additional investments that would maintain a baseload capacity necessary to meet the growing electricity demand while at the same time cutting power consumption fees.
Understanding the Philippines’ energy landscapeThe Philippine electricity sector underwent privatization upon the implementation of the Electric Power Industry Reform Act of 2001 (“EPIRA”). As a result, the generation, transmission, and distribution of electricity were transferred to the private sector to liberalize and unbundle the power sector, as well as to promote competition. Meanwhile, government agencies such as the Department of Energy oversee energy governance and policy while other agencies were responsible for regulating utility charges, administering power supply, and ensuring total electrification level nationwide. The current electrification rate now stands at 94.5 percent.
The electricity distribution system was composed of private investor-owned utilities, electric cooperatives, local government unit-owned utilities, and multi-purpose cooperatives, all of which were allowed to sell and provide electricity within their franchise areas. The largest distribution franchise in the country was owned by the Manila Electric Company (Meralco) which provided electricity across Metro Manila, including the whole of the National Capital Region and Mega Manila.