On Asian energy and economies
Many foreign leaders, Presidents and Prime Ministers of 20+ countries will come to Manila next week for the…
Many foreign leaders, Presidents and Prime Ministers of 20+ countries will come to Manila next week for the ASEAN Summit and Related Summit meetings which run from Nov. 16 to 18. For some context, I assembled some energy and economic data of the countries whose leaders are likely to be in Manila, plus data from some big European economies.
China has become the largest merchandise exporter in the world. It has also become a huge exporter of capital (FDI outstock), as can be seen in Table 1.
Last Monday, I joined friends and fellow energy columnists, Myrna Velasco of the Manila Bulletin and Ben Kritz of the Manila Times, in a freewheeling exchange of ideas and observations of the Philippines’ energy sector with Energy Regulatory Commission (ERC) Chairman Nino Juan.
Energy policy is economic policy, and, by extension, energy regulation is also economic regulation. As shown in Table 1, countries with a great deal of power generation are also the countries with very large GDP sizes, especially in Purchasing Power Parity (PPP) values — China, India, Japan, the US, Brazil, Canada, Russia, and Germany.
I asked Mr. Juan what country in Asia he thinks has the best energy regulation policy, and he quickly replied “Singapore.” Yes, I agree with him. In the ASEAN, only the Philippines and Singapore have largely deregulated and competitive power generation sectors. Singapore has the advantage of being small in land area and non-archipelagic, so energy infrastructure, from generation to transmission, distribution, and supply are generally dense and can enjoy economies of scale.
ENERGY SUPPLY
Yesterday I attended a press conference of the Independent Electricity Market of the Philippines (IEMOP). The prices at the Wholesale Electricity Spot Market (WESM), as expected, were high in the October 2026 billing, double those in October 2025 (see Table 2).
Luzon has plenty of big coal and gas plants and enjoys an ample supply of electricity compared to Visayas and Mindanao, and hence, Luzon has lower prices. And that is the key — the best price regulator that favors consumers is an ample power supply.
The ERC is under pressure from the Department of Energy, legislators, media, and the public to focus on price regulation and, thus, schemes like secondary price caps or price controls in WESM are being done, even in the reserve market. The ERC does not build power plants, but it can encourage or discourage the building of certain plants via price signals, the prices that generation companies are allowed to pass on to the distribution utilities and ultimately to the consumers.
The high prices in 2026 are due to a dependence on more expensive oil-based peaking plants, with prices between P5 to P32 per kilowatt-hour (kWh), and battery energy storage system (BESS) at P32/kWh. Too many solar farms will need too many BESS with high prices (see Table 3).
High electricity prices are like a fever — they are just symptoms, not the causes of disease in the energy sector and human body respectively. The disease is the lack of ample baseload plants, those that run 24/7, even when the sun is not shining, even when the wind is not blowing, even when it is not the rainy season.
Then there is either the lack of transmission facilities (or the facilities are there, but the power plants are built far from them). The National Grid Corp. of the Philippines (NGCP) is explicitly telling generation companies to set up their plants near its existing transmission infrastructure as it has available facilities that can handle more than 4,000 megawatts.
We need to build more large baseload power plants. We need to prioritize high terawatt-hour generation targets, not high renewable energy targets as a share of total generation. China, India, the US, Japan, Korea, Taiwan, Indonesia, Vietnam, Malaysia, etc. — they have huge coal power capacity that ensures their huge overall power generation.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.
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