Market Trends of Philippines Power Generation EPC Industry
Conventional Thermal Power Expected to Dominate the Market
- Conventional thermal power is the power that is generated through fossil-fuel sources, such as coal, natural gas, and oil. In 2022, nearly 77% of the electricity generated in the Philippines was from conventional thermal power.
- According to the Department of Energy (Philippines), in 2022, the Philippines had a total installed capacity of about 28.3 thousand megawatts, with over 12 thousand megawatts coming from coal-powered power plants.
- Out of the various sources of generating conventional thermal power, the majority of energy came from coal in 2022. Coal contributed approximately 46.31% of the Philippines' electricity generation. With such a huge percentage of electricity generation through fossil fuels and upcoming power plant projects, the demand for conventional thermal power is expected to increase during the forecast period.
- In March 2022, San Miguel Corporation announced that it would build two gas-fired power plants in the central Philippines for USD 1.14 billion. The construction of both plants was to start in the third quarter of 2022 and is expected to be completed in 2025. This development will aid in the growth of the EPC market as well since projects of such a large scale require extensive engineering, procurement, and construction planning, which a distinguished player does.
- Moreover, in January 2022, Gen X Energy and a unit of AC Energy Corp plan to jointly develop an 1100 MW combined cycle power plant project in the Philippines to run on natural gas as well as green hydrogen as its fuel.
- Therefore, from the above points, it is evident that conventional thermal power is expected to dominate the Philippine power generation EPC market during the forecast period.
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Upcoming and Ongoing Power Plant Projects Expected to Drive the Market
- In 2022, the total electricity generation from various sources in the power sector in the Philippines was 114.4 terawatt-hours (TWh). Energy sources contributing to the country's energy generation include coal, natural gas, wind, hydro, geothermal, biofuels, and solar energy.
- According to the Statistical Review of World Energy Data, in 2022, the total electricity generation accounted for 114.4 terawatt-hours (TWh), with an annual growth rate of 4.8% compared to the previous year. With the increasing power plant projects and government focus on renewable energy generation, electricity generation is expected to increase, which, in turn, will drive the power generation EPC market in the future.
- In July 2023, Solana Solar agreed to ink a power purchase agreement (PPA) with Philippine firm Kratos RES to supply 10-20MW of electricity from its upcoming Solana Solar Power Project in the Philippines. The project will have a total capacity of 20MWdc, and its owners have already signed an agreement with the National Grid Corporation of the Philippines to connect the project to the national grid.
- In July 2023, the Department of Energy (DOE) of the Philippines announced plans to develop 68 renewable energy projects in Western Visayas, with a combined capacity of 14.24 GW. The planned projects will include 24 hydropower facilities, 17 offshore wind energy, 14 solar power, 12 onshore wind, and one will be geothermal.
- Hence, owing to the above points, upcoming and ongoing projects are expected to drive the Philippine power generation EPC market during the forecast period.
