ISIDRO A. CONSUNJI, chairman and executive officer of Semirara Mining and Power Corp., said in a briefing on Friday that he expects power prices to continue rising next year, with any relief to be provided gas imports, which will start arriving in significant volumes in 2024, to depend on how high gas prices will be.
“In my opinion, next year will be difficult, I think 2024 will be okay because of the entry of LNG (liquefied natural gas) but the issue is the price,” Mr. Consunji said.
In 2023, at least two LNG projects are expected to start operations — those of Atlantic Gulf & Pacific Co. and First Gen Corp. subsidiary FGEN LNG Corp.
Mr. Consunji’s assessment is roughly in line with the government’s.
“We are expecting that by next year, we will see increasing energy prices,” Michael O. Sinocruz, director for Energy Policy and Planning at the Department of Energy, said at the BusinessWorld Economic Forum Forecast 2023 last week.
Energy Secretary Raphael P.M. Lotilla has said power supply will be tight during next year’s dry season.
In November, Manila Electric Co. announced that its customers should expect higher electricity bills due to the increase in the generation charge.
The generation charge is the direct cost of obtaining energy from power generators. It accounts for over half of a typical consumer’s power bill.
“We expect energy prices to rise in lockstep with fossil fuel prices in the market, which are unlikely to come down as the global tug of war for coal and gas supply continues,” Avril de Torres, deputy executive director of Center for Energy, Ecology, and Development, said in a message on Saturday.
“I think in view of the projects that we see coming online (as Malampaya’s gas reserves deplete)… I think frankly, the country is in a difficult position. Hopefully we are able to get more progress in the few years,” Miguel de Jesus, executive director and head for commercial operations of ACEN Corp. said during the BusinessWorld Forum.
The Malampaya gas field currently supplies 20% of the Philippines’ total power requirements and 27% of the Luzon grid’s supply. The concession agreement for operating the gas field is expected to expire by 2024 while its gas reserves started dwindling this year.
Ms. De Torres said high electricity prices will continue for as long as the Philippines relies on fossil fuels and resorts to passing through fuel costs to consumers.
“The only real solution is to tap renewable energy, the largest single source of power we have,” Ms. De Torres said.
James A. Villaroman, chief renewable energy officer of Aboitiz Power Corp., told BusinessWorld in a recent interview that the entry of renewables has helped to reduce power costs. — Ashley Erika O. Jose