Aboitiz Power Corp. (AboitizPower) is bracing for a challenging year, with expectations of increased electricity demand, global supply chain uncertainties, and the impact of the El Niño phenomenon creating tight market conditions.

In a statement, Emmanuel Rubio, AboitizPower president and chief executive officer, said geopolitical events, transmission infrastructure issues, and expected El Niño effects could worsen power supply constraints this year.

Rubio noted that these difficult conditions coincide with a projected 6.6 percent increase in consumption for the year, requiring an additional 600 to 700 megawatts (MW) of new or available electricity capacity.

“This substantial increase in electricity demand underscores the pivotal role of power generation, transmission, and distribution companies in meeting this need,” Rubio said.

The AboitizPower official then stressed the need to build new power plants—both conventional and renewable—, expand the grid to ensure power reaches demand centers, and improve the services and efficiency of electric cooperatives and distribution units.

“There needs to be sufficient transmission capacity that can support the influx of new generation capacity — mostly variable renewable energy — so that when it comes online it can immediately contribute much needed supply to the grid,” Rubio said.

“Finishing long-overdue transmission projects will also be very welcome as it can free stranded capacity like that in Mindanao and help support thin margins elsewhere in the country,” he added.

Currently, coal makes up about 60 percent of the Philippines’ generation mix.

Meanwhile, Rubio expressed confidence in AboitizPower's prospects for 2024, citing its proven ability to meet growing electricity demand and the development and launch of new generation capacities.

In 2024, AboitizPower expects the launch of the 17-MW Tiwi Binary Geothermal Power Plant in Albay and the 159-MW peak (MWp) Laoag solar project in Pangasinan. 

Several other projects are also expected to come online from late 2024 to early 2025.

These include the 44-MWp Solar Plant in Armenia, Tarlac; the 85-MWp Solar Plant in San Manuel, Pangasinan; the 206-MW wind project in San Isidro, Northern Samar in partnership with Vena Energy and Vivant Energy; and the 173-MWp solar power project in Calatrava, Negros Occidental.

Furthermore, AboitizPower plans to begin renewable energy projects this year, including the 212-MWp Solar Plant in Olongapo, Zambales; the 50-MW Camarines Sur wind project, which secured the second round of the Green Energy Auction in July 2023; and the 102-MW Rizal-Laguna Wind Project in partnership with Vena Energy.

To encourage and facilitate investments in the energy sector, Rubio raised the need for further enhancements to the implementation of the Ease of Doing Business Act and the Energy Virtual One-Stop Shop to streamline and simplify the permitting processes for energy projects.

“Little to no red tape and a rationalized bureaucratic process is a plus for prospective investors. Attracting new investments, particularly in generation — which accounts for more than 50 percent of an electricity bill — increases the supply and can make electricity prices more competitive,” he said.