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Power Industry Disruptors and Prospects of the Electricity Demand in the Greater Metro-Manila Area

Author

Listed:
  • Raul V. Fabella

    (School of Economics, University of the Philippines Diliman)

  • Geoffrey Ducanes

Abstract

The power industry is being severely disrupted globally and local industry stakeholders have every reason to be worried. The question is how stakeholder capital should henceforth be deployed to reduce the risk of stranded assets. This study is undertaken to assess the impact of power industry disruptors on the near-term prospect of the electricity demand in the most important submarket of the Philippine power market, the greater Metro-Manila area. The emphasis is on the impact of technology disruptors, especially of solar photovoltaic generation and storage, on top of and in conjunction with policy disruptors. Part One tackles firstly the risks to sustained economic and income growth which will, in turn, impact on the demand for electricity?the macro-economic risks, the global risks, and the policy risks; secondly the risks internal to the electricity industry itself?the technology disruptors especially coming from growing adoption of rooftop and mini-grid solar photovoltaic installations and battery storage. The challenge of solar distributed generation counsels a more sober outlook and a more inclusive portfolio diversification by centralized power generation capitalists. Part Two employs an error correction model to forecast the growth of aggregate and disaggregate (by customer types) demand in a distribution utility franchise, in this case, the Meralco franchise, over the next five years. This model can be adopted as benchmark and adapted by industry stakeholders especially other distribution utility franchises for their own forecasts which should inform the rate setting exercise between the distribution utilities and the regulator, the Energy Regulatory Commission.

Suggested Citation

  • Raul V. Fabella & Geoffrey Ducanes, 2019. "Power Industry Disruptors and Prospects of the Electricity Demand in the Greater Metro-Manila Area," UP School of Economics Discussion Papers 201901, University of the Philippines School of Economics.
  • Handle: RePEc:phs:dpaper:201901
    as

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    File URL: https://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1520/999
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    References listed on IDEAS

    as
    1. Desiree A. Desierto & Geoffrey M. Ducanes, 2013. "Philippines," Chapters, in: Hal Hill & Maria Socorro Gochoco-Bautista (ed.), Asia Rising, chapter 13, pages 385-407, Edward Elgar Publishing.
    2. Andrew G. Berg & Jonathan D. Ostry, 2017. "Inequality and Unsustainable Growth: Two Sides of the Same Coin?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(4), pages 792-815, November.
    3. Sarah Lynne S. Daway & Geoffrey M. Ducanes & Raul V. Fabella, 2017. "Quality of Growth and Poverty Incidence in Low Income Countries: The Role of Manufacturing," UP School of Economics Discussion Papers 201708, University of the Philippines School of Economics.
    4. Raul V. Fabella & Sarah Lynne S. Daway-Ducanes, 2018. "Federalism and Inclusion in Developing Economies," UP School of Economics Discussion Papers 201804, University of the Philippines School of Economics.
    5. Joseph D. Bergesen & Leena Tähkämö & Thomas Gibon & Sangwon Suh, 2016. "Potential Long-Term Global Environmental Implications of Efficient Light-Source Technologies," Journal of Industrial Ecology, Yale University, vol. 20(2), pages 263-275, April.
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    More about this item

    Keywords

    Electricity demand; Forecast methods; Distributed Solar Photovoltaic; Rooftop and Mini-grid systems; Policy disruptors;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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