The new Philippines Power Report forecasts that the country will account for just 0.75% of Asia Pacific regional power generation by 2013, with a modest generation surplus that provides a theoretical export capability. The Asia Pacific power generation assumption for 2008 is 7,116 terawatt hours (TWh), representing an increase of 3.2% over the previous year. We are forecasting an increase in regional generation to 9,149TWh by 2013, representing a rise of 28.6%.

Thermal power generation in 2008 totalled an estimated 5,590TWh, accounting for 78.6% of the total electricity supplied in the Asia Pacific region. Our forecast for 2013 is 7,046TWh, implying 26.0% growth that reduces the market share of thermal generation to 77.0%. This is thanks largely to environmental concerns promoting renewable sources, hydro-electricity and nuclear generation. The Philippines’ thermal generation in 2008 was 49.6TWh, or 0.89% of the regional total. By 2013, the country is expected to account for 0.81% of thermal generation in the region.

For the Philippines, oil is the dominant fuel, in 2008 accounting for 53.8% of primary energy demand (PED), followed by coal at 24.8%, gas at 12.5% and hydro-electric energy at 8.9%. Regional energy demand is forecast to reach 4,862mn tonnes of oil equivalent (toe) by 2013, representing 25.1% growth from the 2008 level. The Philippines’ 2008 market share of 0.64% is set to rise to 0.65% by 2013. The country’s 9.8TWh of hydro demand in 2008 is forecast to reach 11.5TWh by 2013, with its share of the Asia Pacific hydro market falling from 1.10% to 0.85% over the period.

The Philippines is ranked equal seventh with Malaysia in the enlarged and updated Power Business Environment rating, thanks to its relatively high level of renewables usage and healthy energy demand growth prospects. Country risk factors offset some of the industry strength, but the country should be able to keep Thailand at bay and potentially challenge and overtake Malaysia during the next few quarters.

The report is forecasting Philippines’ real GDP growth averaging 3.46% a year between 2009 and 2013, with the 2009 estimate at 1.50%. Population is expected to expand from 89.7mn to 98.4mn over the period, with GDP per capita and electricity consumption per capita forecast to increase by 42% and 7% respectively. The country’s power consumption is expected to increase from an estimated 51.8TWh in 2008 to 60.5TWh by the end of the forecast period, leaving theoretical surplus generation rising from 7.8TWh in 2008 to 8.2TWh in 2013, assuming 2.5% annual growth in electricity generation. Between 2008 and 2018, we are forecasting an increase in the Philippines’ electricity generation of 45.3%, which is around the middle of the range for the Asia Pacific region. This equates to 26.0% in the 2013-2018 period, up from 15.4% in 2008-2013. PED growth is set to decrease from 27.0% in 2008-2013 to 18.8%, representing 50.8% for the entire forecast period. An increase of 39% in hydro-power use during 2008- 2018 is a key element of generation growth. Thermal power generation is forecast to rise by 47% between 2008 and 2018. More details of our long-term power forecasts are at the end of this report.