Different Factors Affecting Energy Costs in the Philippines

Different Factors Affecting Energy Costs

It may come as a surprise that the Philippines is one of the most energy consuming countries in the world. One factor is that we are located in a tropical location where the sun hits directly at those countries. The use of electrical fans and air conditioners are widely consumed in order to ease the heat. 

No doubt electricity must be generated and delivered through equipment that operates on fuel and requires building and maintenance costs. When the prices of these things increase or decrease, so does your electricity bill. In actuality, prices change every minute depending on the demand of energy but as customers, we are charged based on seasonal demand.

These are the factors affecting the energy cost in the Philippines that determines the price of electricity:

  • Cost of Fuels

Fuels and electricity go hand in hand in terms demand and supply. For electricity, it has to be generated and delivered and in order to process it is to be supplied by fuels. Whenever the fuel prices vary, it affects the cost of electricity in return.

  • Power Plant Costs

The use of power plants has to be built and maintained. With the impact of electricity, it needs to operate to supply the needs in our household. These will affect the prices in energy consumption.

  • Transmission and Distribution System Costs

Just like power plants, distribution and delivery systems also need to be built and maintained. This added consumption to the use of electricity that will take effect in price demand.

  • Weather

Electricity costs when inclement weather happens. Rain can provide cheaper hydropower generation while wind keeps turbines spinning. Worst case scenario will approach when extreme weather happens. This means the demand for electricity increases and makes it more expensive.

  • Regulations

Regulations vary per location. Some service or utility commissions controlling costs and others implementing both unregulated and regulated prices.

  • Seasons

Seasons affect us greatly during the summer where the demand of electricity is high. When more people need more power, the need to efficiently generate and deliver electricity increases, along with the cost.

  • Location

From the factors mentioned, no doubt that it comes no surprise that location greatly affects electricity demand. Factors like power plant availability, local fuel costs, and regulations all impact the cost of electricity depends on where you live. 

  • Type of Consumer

Customers who live in industrial type of home usually pay less per kilowatt hour (kWh) than those who live in commercial and residential. This is because they can be supplied a larger amount of electricity at one time, making delivery and generation quicker and cheaper. However, getting power to consumers who use smaller amounts takes more effort, time, and money. Think of it as buying in bulk for wholesale pricing versus getting a little at a time.

Energy consumption is very much important in our everyday activities. From a simple need of electricity to our appliances to providing large amount of energy that can light up a town, all can be done with proper usage but with the right demand. With the help of the Envision Monitoring System, you get access to an intelligent system with real-time and historical energy data for your needs that is both easy-to-use and accessible. Learn more by visiting our website at envision-monitoring.com/.

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