Government urged to firm up energy mix policy

MANILA, Philippines – The government should firm up its energy mix policy to provide a clear direction for power developers, businessmen said yesterday.

Phinma Corp. president and CEO Ramon del Rosario said yesterday in a forum hosted by the Economic Journalists’ Association of the Philippines and ING Bank, the government must make up its mind on the energy mix that it wants to allow power developers to plan ahead.

“It’s important for government to adopt an energy strategy that will include the energy mix that they would like to promote,” he said.

Del Rosario said the energy mix policy should be a mutual partnership between government and the private sector.

“I think, probably, that’s the best way to go. This is something that can be done with the private sector and government -- talking to each other, consulting with each other on what is realistic and what really can be implemented,” he added.

Under the Department of Energy’s current fuel mix policy, the country should source 30 percent of its energy requirements from coal, 30 percent from renewable energy and another 30 percent from natural gas. The remaining 10 percent will come from oil-based power plants.

Currently, the government is pushing for investments in renewable energy (RE) to meet commitments to reduce carbon emissions by 70 percent.

However, the Philippines is not ready for an all-RE power source because it is still expensive than coal, DMCI Holdings Inc. chairman and president Isidro Consunji said in the same event.

“The price of power is expensive, but coal is the cheapest. Until we can find a better solution, we just have to rely on coal. But all-coal today is compliant with the Clean Air Act, which is very strict,” he said.

In the next five years, 70 percent of new power plants will come from coal, DOE data showed.

Del Rosario said the country’s reliance on coal “is a reality we cannot do away with for the time being” but power players are moving toward cleaner technologies.

“There is also such a thing as clean coal technology. Of course, there are still emissions but there are responsible ways of handling coal-fired power plants. We would like to believe we are doing that, those who are in the business in coal-fired power plants,” he said.

Meanwhile, government support will be critical in pushing for RE and cleaner technology investments, Del Rosario said.

“When they decide that there’s a certain amount of clean energy they want to push, the reality of it is that those investments will take place only if there is significant support from government in terms of like FIT (feed-in tariff) or a certain degree of subsidy,” he said.

FIT is a set of incentives given to power developers for a period of 20 years to invest in the more expensive RE sector.

Phinma has coal, geothermal and wind power investments through its subsidiary, Trans-Asia Oil and Development Corp.

Meanwhile, DMCI mainly invests in coal-fired and bunker-fired power plants through Semirara Mining and Power Corp. and DMCI Power.