Beat the heat

Peak electricity demand is just months away. It’s not yet officially summertime but, according to
the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (Pagasa),
high heat indices of 33 to 45 degrees Celsius have already been hit in some parts of the
Philippines this year; falling between the “extreme caution” and “danger” categories. By the time
you’re reading this, the heat indices may have already gone into deeper territory, with April and
May projected to be the warmest months.

For us consumers, increasing temperatures would mean more use of our electric fans and air
conditioners to combat the heat, which — combined with other consumers doing the same —
can result in higher aggregate demand for electricity, thinner supply-demand margins, and
higher prices. Case in point, the spike in temperature and, hence, demand last March 5, which
led to a yellow alert over the Luzon grid. The highest peak demand for the year thus far was
recorded last March 6 at 12,467 megawatts but the Department of Energy forecasts a peak of
14,769 megawatts for Luzon in mid-May.

Let us pray that the heat won’t result in more forced or unplanned outages of power plants
and/or transmission and distribution facilities, which will only exacerbate the strain on electricity
supply. The grid operator assured the public that there will be no supply issues, provided that
there will be no sudden power outages. Still, they are correct to suggest that we must prepare
for a “worst case scenario” of multiple red and yellow alerts.

For one thing, it is reasonable to expect that hydro power generation will be derated as high
temperatures would evaporate the reservoirs and reduce water supply. For context, around 59%
of allocated water is used for hydro power generation; considered non-consumptive as the
water (if there is any) is returned to its source.

On average, hydro power accounted for 8.9% of gross energy generation in megawatt-hours
(MWh) in 2024. But its contribution went as low as 4.1% in May 2024, the same month when
aggregate power generation was at its highest that year. On various dates between April to May 2024, seven hydro power plants were on forced outage due to “low water level and hydrological constraints”, costing the grid 440 megawatts. Recall that from April 16 to May 2024 the Luzon, Visayas, and Mindanao grids experienced a collective total of 13 red alerts and 42 yellow alerts; albeit not all because of derated hydro power generation.

Much of the blame is summarily assigned to the large baseload power plants that are on forced
outage; after all, they are indeed a big loss given the sheer amount of power they generate, with
coal alone already accounting for 62% of gross energy generation in MWh in 2024. Yet, let’s be
mindful how these forced outages are really weather- or season-related. In fact, many hydro
plants schedule their preventive maintenance procedures during the summer, when the water
supply is anticipated to be low.

While the situation might be ideal for solar power, its power generation capabilities (low capacity
factor; only 2.9% of gross energy generation in MWh in 2024) are not enough to supplement the
loss in hydro power generation or any baseload plant on forced outage, much less support the
grid in a significant way at times of high demand.

With peak electricity demand expected soon, along with the probability of derated power
generation, expect prices to go up. Again, the grid operator is correct to suggest that the country
would be needing more baseload or “non-intermittent, non-variable” sources of power moving
forward, especially during the summer months, for grid stability and reliability.

Amidst heightened electricity demand it is also wont to observe how power distributors —
particularly private utilities and cooperatives — will prepare and respond. There is certainly more
reason to worry more for some electric coops since, as I have pointed out in a previous article
(“A power sector alphabet soup”), investments in upgrading their infrastructure have been
lacking. Specifically, it was found that, from 2022 to September 2024, seven electricity
distribution coops in the Panay and Guimaras grids only allocated 3.1-3.7% of their total
spending on infrastructure development; basically, just for maintenance and not really for
upgrade.

As an example, consider the breakdown of the sole submarine cable transporting electricity to
the islands of Siargao and Bucas Grande last December, which isn’t an encouraging sign for its
residents and tourists, especially as higher demand amidst the rising heat might be a new pain
point. Meanwhile, Samal, Davao del Norte must also be worried, with its mayor being critical of
its service provider, the Northern Davao Electric Cooperative Inc. or Nordeco, for unresolved
issues that cost the island economic losses of around P120-150 million annually since the
2010s.

In contrast, the likes of MORE Electric and Power Corporation (MORE) and Davao Light and
Power Company (DLPC) appear to be doing the right thing by continuing to invest in their
respective distribution infrastructures to deliver more electricity for the customers they serve.
MORE recently said that it has plans to rehabilitate and construct more substations in Iloilo City,
while DLPC recently energized its Lanang Substation in a developing business district in Davao
City, making it its sixth fully digital substation within its current franchise area.

Figuratively speaking, the heat is on; more so for power distributors if they are prompted to
implement a Manual Load Dropping (or in other words: rotational brownouts) due to tight supply
and demand conditions or, worse for them, if there is a breakdown in their power network
infrastructure. After all, they are the ones who face the consumer. That’s why I call for power
distributors to really prepare and be at their best, especially during the dry seasons, so that the
blame game doesn’t fall squarely on them. Power distribution has to get better as the rest of the
electricity supply chain gets better. They should’ve invested in and started upgrading their
infrastructure yesterday!