The Electricity Demand in the Philippines During the COVID-19 Pandemic Period

By: Jeremy B. Estillore

Corona Virus Disease of 2019 or commonly known as COVID-19 has brought a great distress to the country, Philippines, and to the whole world. The threat that it brought greatly affected the economy sector. Many were cancelled from their jobs, travel from city to city or even country to country have been restricted to avoid the spread of the disease. Due to these reasons, there have been inflation in the country.  It can be observed in Figure 1 the change in food inflation from 2019 to 2020 that the food inflation in the Philippines has increased in 2020. [1]

Figure 1. Food inflation from 2019 to 2020.

However, despite the inflation, due to the threat of COVID-19 and restriction from going outside their homes, people started panic buying and opted to hoarding of necessary products as well as foods [2]. Thus, there have been an increase in demand of these products. However, there is also one necessary factor to be discussed if there has been an increase or decrease in demand of it during the COVID-19 period: the Electricity.

In this section will discuss the background of the topic, electricity demand in worldwide view, and specifically the demand of electricity within the Philippines during this period.

1.1  Background

Since the emergence of COVID-19, people have been wary because of the danger it brings. The government, to protect every individual, has then decided to have a lockdown in the country which lasted for almost two years since January of 2020. Due to the lockdown, many Filipinos have been out of their job like those who work in the construction that need to be fired since interaction with other people have been restricted. While some also continue their work through working from home, but only those workers that can continue their jobs via internet. A monitoring survey has been conducted on August 2020 for economic update by the World Bank and the results show that about 40 percent of households reporting a fall in income and among households engaged in non-farm business, entrepreneurial income reportedly declined particularly [3]. In addition, it can be observed in Figure 2 that there has been an increase in unemployment rate from 2019 to 2020 in the Philippines due to COVID [1]. Furthermore, travel ban has been enacted to avoid new cases to enter in the country which has greatly affected the economic sector of tourism in the country especially those individuals that depend their livings on tourism. PwC Philippines conducted some survey, and some results were that with the travel restrictions and closure of businesses, 88% of the respondents expect losses of over 50% of their 2020 revenues [4].  

Figure 2. Unemployment Rates in Asia and the Pacific Economies from 2019-2020.

Therefore, it is curious to know, as people started working from their homes and some manufacturing companies put to stop, on how is this situation caused by COVID-19 affected the demand in electricity during the period.

1.2 Electricity Demand During COVID in Global Aspect

In the global aspect for electricity demand during the period of COVID-19, similar situations have been observed. Since people have been restricted from working in their companies and some are asked to work from their homes by using their gadgets and internet, there have been an increase in electricity demand in Residential sectors which is opposite to the state of Industrial and Commercial sector that were observed to have a drop in electricity demand [5]. It has been observed that due to the emergence of the feared virus and enacting different rules, regulations, and actions to prevent the spread of the said virus, the demand in electricity has dropped to the same level during Sundays especially to the commercial and industrial sectors [6]. The level has been compared to the Sunday’s level because it is the common day where people are off from work to spend time with their families and during this day, consumption of electricity for industrial sectors is much lesser compared to commercial and residential sectors where people are commonly found during Sundays. This is for the general global aspect.

In agreement to what have been stated above, a study on the impact of covid-19 to electricity demand in Qatar has been conducted. It was observed that there have been an increase in electricity demand for residential sector due to high consumption of electricity because of the implementation of mitigation measures such as staying at home which can lead to high consumption of electricity by enjoying themselves to different things such as watching shows all day, baking, online gaming, and working from home. Oppositely, it was observed that there has been a decrease in electrical consumption for industrial and commercial sector since both were affected by the lockdown policies and many of the commercial services were asked to shut down during the lockdown period [7].

Other countries have also experienced the drop in electricity demand during this period, among them is Indonesia that faced 15% drop in electricity demand for 2020 according to the state electricity corporation Perusahaan Listrik Negara (PLN), and India who faced a 25% in electricity demand from March 25 to April 24 of 2020 compared to the demand in 2019 for the same period [8]. In Bangladesh, due to the imposed lockdown and other restrictions, there has been a 50% reduction in consumption of electricity in 2020 compared to 2019 according to the study Effect analysis of the COVID-19 pandemic on the electricity consumption of Bangladesh which also observed that the sector that significantly declined in electricity consumption is the industrial and commercial sector compared to residential sector [9]. Furthermore, even countries without domestic lockdowns like some countries in Sub-Saharan Africa (SSF) have been impacted indirectly because of lockdown measures outside their countries and border controls have led to a significant amount of decrease in trade and/or sectors related to tourism that require electricity [5].

1.3  Electricity Demand During COVID In the Country

In the Philippines, since the arrival of the virus, many restrictions have been imposed by the President. All companies have been asked to stop operating and change to a work from home setup. Also, Filipinos were instructed to only stay at home and were forbidden to interact with other people so as to avoid the spread of the virus. This has lead to a spike in energy consumption of the Philippines and it was anticipated during the period that the demand in electricity would fall to the same level of weekend consumptions where people are often given day-off thus, a reduce in electricity consumption for industrial and commercial sector but an increase in electrical consumption for residential sector [10]. Moreover, a drop by around 30% of electricity consumption during the Luzon-wide enhanced community quarantine from 15 March to 16 May 2020 has been observed [8]. Since the decline in electricity demand and consumption, the business of electricity distributors such as the Aboitiz Power, specifically on generation and distribution businesses were greatly impacted as stated by the President and CEO Emmanuel Rubio of Aboitiz Power Corp. However, since the enhanced community quarantine (ECQ) was imposed during the summer months, the situation was different for power distributor such as Manila Electric Co. (Meralco). Due to the quarantine and lockdown protocols, there has been an increase in electrical consumption in residential sector due to increase in demand and hot temperature [11].

On the other hand, this situation has opened different opportunities to some residential end-users. They now have what we call “prosumers” who are both considered as consumers and producers. In the report made by the webpage eco-business, Filipino resident Mike de Guzman has had to pay nothing since they use solar panels and even produce more electricity than they can consume which can be delivered back to the distribution sector through net metering system. This has supported the law RA 9513 or also known as Renewable Energy Act of 2008 [12].

1.4  Conclusion

Through the presented reports, it can be concluded that the electricity demand, not only in the Philippines but as well as in the Global aspect has been significantly affected. Especially the Commercial and Industrial sector compared to the Residential sector that has shown a result of increase in electricity demand since people are locked up in their homes. This situation greatly affected the businesses of the power and electricity distributors. On the other hand, it opened great opportunities to some as they have discovered the net metering system where residents may produce electricity and consume them so they can pay nothing if they produce more electricity than they usually consume and may earn instead.

1.5  References

[1]	"Food Inflation and Food and Nutrition Security Situation in Developing Asia During the COVID-19 Pandemic," Asian Development Bank, 2021.
[2]	C. R. S. Madarang, "interaksyon," Philstar, 12 March 2020. [Online]. Available: https://interaksyon.philstar.com/rumor-cop/2020/03/12/164036/panic-buying-metro-manila-covid-19/.
[3]	D. Llorito, "PHILIPPINES: While Battling the Pandemic, Strengthening Disaster Risk Reduction and Management Needed to aid Recovery," World Bank, Manila, 2020.
[4]	"PwC," July 2020. [Online]. Available: https://www.pwc.com/ph/en/publications/pwc-publications/tourism-covid-19.html#:~:text=Impact%20of%20COVID%2D19%20outbreak,50%25%20of%20their%202020%20revenues.. [Accessed 19 February 2023].
[5]	S. Apfalter, M. Hommes, M. P. Mendes and N. Toba, "Lessons for Electric Utilities from COVID-19," EMCompass, 2020.
[6]	IEA, "Covid-19 impact on electricity," IEA, Paris, 2021.
[7]	A. Abulibdeh, E. Zaidan and R. Jabbar, "The impact of COVID-19 pandemic on electricity consumption and electricity demand forecasting accuracy: Empirical evidence from the state of Qatar," Energy Strategy Reviews, vol. 44, no. 100980, 2022.
[8]	ADB, "COVID-19 and Energy Sector Development in Asia and the Pacific," Asian Development Bank, 2021.
[9]	A. Alavi, M. S. Sadid, M. Ahmed and F. Abid, "Effect analysis of the COVID-19 pandemic on the electricity consumption of Bangladesh," Heliyon, vol. 8, 2022.
[10]	M. Sanchez, "THE IMPACT OF COVID-19 ON ELECTRICITY," SolEnergy Systems Inc..
[11]	PE2, "Disrupted by COVID-19, power sector resets," Philippine Energy Efficiency Alliance, Manila, 2021.
[12]	H. A. Fernandez, "As power bills surge amid Covid-19, will prosumers be the Philippines’ next big energy trend?," Eco-Business, 2020.