Meralco’s energy efficiency strategy is working

The Philippine government’s long term vision is to make energy efficiency "a way of life" for Filipinos.
Published: Mon 15 Aug 2016

We wrote almost two years ago about how the Philippines is considering the adoption of distributed energy to cope with its power supply shortage which is caused mainly by poor infrastructure and energy inefficiencies [Philippines aim to save US$20 billion annually using distributed energy]. With a rapidly growing economy and a higher demand for reliable sources of energy, more energy generating solutions are certainly welcome but as income levels increase, consumers will want to buy more appliances which will only place increased pressure on energy resources. This is where a sound energy efficiency strategy comes into play.

The road to energy efficiency

The Philippine energy efficiency roadmap (2014 to 2030) and action plan (2016 to 2020) was put together by the government only two years ago. These were prepared with the support of the European Union. The 2016-2020 Action Plan is currently being implemented by the Energy Efficiency and Conservation Division of the Energy Utilization Management Bureau of the DOE.

The Philippine Energy Efficiency Roadmap 2014-30 is a detailed outline of a strategic plan that is directed at creating a more energy-efficient Philippines across all sectors of economic activity, namely industrial, transport, commercial and residential. It is presented and is seen as a set of plans, strategies and targets laid out on an annual and per sector basis.

The roadmap identifies overall vision, clear objectives and measurable targets; short, medium and long term potential actions, both cross-cutting and by sector; and plans for measuring and monitoring progress. The Roadmap also places a measure of importance on the development of activities in data collection, monitoring and evaluation, which is considered to be rather limited.

The existing National Energy Efficiency and Conservation Programme (NEECP) long term vision is to make energy efficiency "a way of life" for Filipinos.  It is then further stated as "an energy efficient nation that contributes in achieving the country's economic development and helps ensure energy security, optimal energy pricing and sustainable energy systems." The objective is also stated that the final energy demand of the country needs to be reduced by 10% cumulatively by the end of the 2011- 2030 period.

Coaching customers to save energy

Tony Valdez, VP, Head of Marketing, Customer Solutions and Product Development, Meralco, who spoke to Engerati in an interview at Asian Utility Week, says that consumption levels are growing due to high temperatures, low inflation and a powerful economy.  

He said that currently, appliance ownership is low with only 25% owing an air conditioner and 80% owing refrigerators but that this is set to change. He pointed to customer research which shows that there is a strong customer desire to purchase more appliances in a bid to upgrade their current lifestyles.

To relieve growing pressure on the grid and help customers ‘upgrade’ their lifestyles without them receiving shocking energy bills, Meralco aims to ‘coach’ or educate their customers about being energy efficient- a “win-win” situation for all concerned, says Valdez.

Utilities empowering the customer

Added to extensive customer communication, Meralco has also set up an appliance laboratory which helps customers budget their consumption more effectively. “This lab is meant to empower our customers as they upgrade their lifestyles.”

During the interview, Valdez explained the importance of communicating with customers via a number of resources: “We aim for transparency and efficiency when it comes to customer and media communication. This has improved our image in the public eye. Ever since we have adopted a more customer-centric view, there is less animosity towards us as a company.”

Valdez explained that alongside efficient customer interaction, accurate and up to date billing empowers customers when it comes to managing consumption levels. Through an AMI pilot project involving 25,000 customers, Meralco has seen a massive improvement in energy efficiency levels. Figures point to 18% savings.  

“The best way for customers to save is to know how much they are spending. Get to know your customers and their needs through research and pilots and both the utility and its customers will benefit in the long run.”

As we have written in the past, the billing experience is a key part of the customer life cycle and a major influencer on satisfaction so it makes sense for forward thinking utilities to follow this path. While in other countries this customer-focussed model is used to reduce churn, countries like the Philippines can use it to reduce grid pressure through energy efficiency measures and improve the utility-customer relationship. [Customer shock and the billing experience.]

Further reading

Energy Efficiency and Conservation Roadmap 2014-2030

Philippines Energy Efficiency Action Plan 2016-2030