Power demand growth to benefit flexible generators
From AB Capital's The Opening Bell: Three Moves
Event
NGCP projects electricity demand to rise across all grids in 2026, led by Visayas (+24%), followed by Luzon (+13%) and Mindanao (+12%), noting that recent peak demand levels have already breached forecasts. DOE said Luzon supply remains adequate, while Visayas faces tighter conditions, supported by contingency measures and planned capacity additions.
View
The outlook points to a return to demand growth off a low 2025 base, with Visayas remaining structurally tighter. While new supply is expected to come online, seasonal and regional constraints could still lead to modest spot price upticks, particularly in Visayas and during the summer months. We see this offering incremental margin support for exposed gencos.
Catalyst
Watch 1Q grid demand trends, outage scheduling under NGCP’s GOMP, and delivery of new capacity. Upside centers on tighter conditions, while faster-than-expected commissioning of new plants could temper volatility.
Action
We see the demand reacceleration as more supportive for gencos with higher spot-market exposure (ACEN, SCC) where tightness can translate into incremental margin upside, albeit well below prior WESM cycle highs. For more contracted portfolios, earnings remain more stable, with limited pricing upside but better downside protection.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
- Latest
