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Electricity consumption in the Philippines continues to grow every year, and in 2017, it reached a new peak of 94,370 gigawatt hours (GWh), latest data from the Department of Energy (DoE) shows. But consumption growth in 2017 slackened considerably to 3.9% from 10.2% in 2016.

Among the factors that contributed to the large increase in power consumption in the latter year were “the increase in temperature and utilization of cooling equipment aggravated by the strong El Niño, the conduct of National and Local elections during the first half of the year, increase in economic growth, and entry of large power generating plants,” the DoE said in its 2016 Philippine Power Situation Report.

The residential sector expended 26,782 GWh of electricity last year, making it the main driver of electricity consumption in the country. Meanwhile, the commercial and industrial sectors, consumed 22,768 GWh and 25,573 million GWh of electricity, respectively.

When it comes to power generation, the country is still reliant on coal; this source accounted for 46,847 million GWh or 49.6% of the total generated power. But it managed to substantially reduce the power it generated from oil, from 5,661 GWh in 2016 to 3,793 GWh in 2017.

Meanwhile, power generated from natural gas increased 3.5% from 19,854 GWh to 20,547 GWh. But the growth of power generated from renewable energy sources — from 21,979 GWh to 23,183 GWh — was bigger at 5.5%. Intriguingly, the country generated less power from geothermal (from 11,070 GWh to 10,270 GWh) and wind (975 GWh to 690 GWh), and more from hydro (8,111 GWh to 9,605 GWh), biomass (726 GWh to 1,335 GWh) and solar (1,097 GWh to 1,283 GWh) sources.

“Coal remains the main supply for our baseload and we also rely on indigenous sources such as the Malampaya gas and conventional renewables such as geothermal and hydro,” Meralco PowerGen Corp., the power generation arm of Manila Electric Co. (Meralco), said. “Recently, there is a significant entry of variable renewable energy such as solar, wind, and biomass.”

“A review of the last 40 years shows that the government steered the industry with the goal of achieving energy security by reducing dependence on oil, increasing our indigenous energy, and pursuing diversity of supply,” the company added.

Rogelio L. Singson, president of Meralco PowerGen, noted in an interview with BusinessWorld that the share of solar may still be small but it may significantly increase in the coming years.

When it comes to power generation by grid, Luzon came out on top with 68,512 GWh, an amount dwarfing Visayas’ 14,054 GWh and Mindanao’s 11,804 GWh.

The country’s installed generating capacity went up 6.1% from 21,423 megawatts (MW) in 2016 to 22,728 MW 2017. This capacity came mainly from coal (8,049 MW) and renewable energy sources (7,079 MW). The rest came from oil (4,153 MW) and natural gas (3,447 MW). Dependable generating capacity also rose from 18,346 MW to 20,515 MW

Mr. Singson pointed out, however, that many of the country’s power plants are old — about 60% of them have been in existence for 15 years or more. “Typically you can prolong the life of a plant for 10 to 15 years from the conventional 30 years. But as a plant gets older, it becomes less predictable,” he said, adding that it also becomes less efficient. This unpredictability and inefficiency can result in unplanned outages.

Meralco PowerGen aims to improve the situation by building two technologically advanced coal-fired power plants in Quezon province. One is a 455-MW plant located in Mauban, which, upon completion, will be the first power generation facility to utilize supercritical technology. The other one is a 1,200-MW ultrasupercritical plant that will rise in Atimonan. These coal-fired power plants will operate at higher temperatures and pressures compared to sub-critical power plants, allowing them to achieve higher efficiencies and reduce their carbon dioxide emissions. (The company is also looking at a number of solar and energy storage projects.)

To be able to meet the growing power demand more cost-effectively and sustainably, several critical issues must be tackled, including bureaucratic red tape. “In fairness, the energy direction, policies are in place,” Mr. Singson said, “but processing remains a headache.”

Meralco PowerGen is calling on the government to streamline the processing of government permits and licenses to shorten the four to six years it currently takes before a power project can be carried out. The company also suggests reassessing the regulatory approval process to the reduce the amount of time — almost two years — that the Energy Regulatory Commission takes to approve power supply agreement.

“The government should let the power market work as intended by EPIRA whose principal reform was to transform the industry from a sellers market under a government monopoly (Napocor) to a buyers market where DUs (distribution utilities) and Contestable Customers are empowered with choice and competition,” the company added.

EPIRA stands for the Electric Power Industry Reform Act of 2001, while Napocor stands for the state-run National Power Corporation.