Energy firms see strong demand amid oil crisis

By Sheldeen Joy Talavera, Reporter

PHILIPPINE energy companies expect electricity and fuel demand to remain strong in the second half, although rising oil prices and supply risks linked to the Iran war are likely to keep pressure on costs and project execution.

Meralco PowerGen Corp. (MGEN) President and Chief Executive Officer Emmanuel “Manny” B. Rubio said the company is prioritizing stable operations and careful fuel sourcing as volatility in global energy markets persists.

“We remain optimistic about the second half of the year as we execute our strategy,” Mr. Rubio told BusinessWorld in a Viber message.

He said tensions involving Iran and the US had already created long-term effects that the energy sector would continue to manage in the coming years.

Power companies are facing higher fuel and shipping costs as well as supply-chain risks for critical energy infrastructure amid continuing geopolitical tensions in the Middle East.

Mr. Rubio said MGEN remains financially stable after posting P5.1 billion in net income in the first quarter.

He said the company’s priorities for the rest of the year include keeping projects on schedule, particularly the MTerra Solar project, which the company has described as the world’s largest integrated solar-and-battery facility.

MGEN, the power generation arm of Manila Electric Co., has a combined net salable capacity of 5,069.7 megawatts (MW) from conventional and renewable sources. The company aims to expand capacity to more than 10,000 MW by 2030.

Mr. Rubio also said MGEN expects to benefit from broader participation in the retail electricity market after regulators lowered the threshold for the retail competition and open access program.

Beginning June 26, electricity users with demand of at least 100 kilowatts (kW) may directly choose suppliers, lower than the previous 500-kW threshold.

The program lets qualified customers negotiate directly with electricity providers for potentially lower rates.

Meanwhile, ACEN Corp. President and Chief Executive Officer Eric T. Francia said uncertainty in global energy markets highlights the need to strengthen domestic energy infrastructure.

“Accelerating the deployment of renewable energy, complemented by energy storage solutions… will be critical to achieving greater energy independence,” Mr. Francia told BusinessWorld via Viber.

ACEN has about 7 gigawatts (GW) of attributable renewable energy capacity from operational, under-construction and committed projects across the Philippines, Australia, Vietnam, India, Indonesia, Laos and the US.

Mr. Francia said the company remains on track to deliver about 1 GW of solar, wind and battery-storage projects under construction, while more projects are expected to move into construction in the second half.

He added that demand in the retail electricity market remains strong, supported by broader access to renewable energy programs and lower participation thresholds.

Outside the power sector, fuel distributors and retailers are also preparing for continued swings in oil prices and supply conditions.

Top Line Business Development Corp. Senior Vice-President and Chief Operating Officer Brigitte Carmel C. Lim said geopolitical tensions had increased uncertainty across the energy industry.

Despite this, she said the company expects demand in the Visayas to remain steady due to transport activity, tourism, trade and local commerce.

“At the same time, we recognize that the market environment can change quickly,” Ms. Lim told BusinessWorld. “This is why we continue to strengthen our depot capacity, importation capabilities and retail network.”

The Cebu-based company has been expanding its fuel importation, storage, and retail network to meet rising demand in the Visayas.