DOE: El Niño may raise power demand, electricity prices

MANILA—The Department of Energy (DOE) on Tuesday said it is preparing for higher electricity demand and possible power supply problems as El Niño brings hotter temperatures.

Energy Secretary Sharon Garin said electricity prices could rise, citing the relationship between supply and demand in the Wholesale Electricity Spot Market (WESM).

“Demand-supply relationship always has an effect on the market, on WESM. So it might affect that. But I’ve talked to ERC to try to find ways to do something about the market so that there is no abuse on the part of the ones selling electricity in the market,” Garin said.

Garin said the hotter weather expected during the latter part of the year and extreme heat and dry conditions could also affect the country’s power generation capacity. Hydropower plants are unable to operate at capacity when rivers dry up, while the efficiency of coal plants also suffers.

“So it will affect our supply, and DOE is preparing to cover for that based on the other options that we have. But the appeal is for the public to be aware of this so that we can already start having the mindset of energy savings,” she added.

Garin also said China’s moves to restrict or reduce exports are not currently affecting the supply contracts of Philippine oil companies.

China accounts for about 21 percent of the Philippines’ LPG supply, 5 percent of gas supply and around 25 percent of diesel supply, according to Garin.

“Basically, China is stockpiling because they released so much of their reserves previously. We have, in fact, checked with all our oil companies. So wala pong impact on our oil companies as of this moment. So their orders, ‘yuong natapos na or their ongoing long-term contracts are still being honored by all traders, even if it comes from China,” she said.

Garin said fuel prices are expected to remain elevated for the next few months and are unlikely to return to pre-conflict levels soon.

“That’s the cost of being dependent on imported fuel, and that’s also the cost of not having our own,” she said.

The DOE also said the bidding for the Semirara coal is expected to take place by the end of the year.

“The Semirara is scheduled to be bidded out this year, end of November or early December. On coal during El Niño, coal will still be there whether the contract expires or not. There’s still production, and the current contract is up to 2027,” she said.

However, she said that Semirara is not enough to significantly affect the country’s overall coal supply because about 95 percent of Philippine coal is imported.