DOE readies new fuel mix policy

MANILA, Philippines - The Department of Energy (DOE) is working to diversify the country’s sources of energy through a new fuel mix policy.

Energy Secretary Carlos Jericho Petilla said “the fuel mix is already out. It’s going to be non-firm (or not mandated). It’s a target.”

Initially, the DOE is looking at a fuel mix that would have 30 percent natural gas/liquefied natural gas and 35 percent coal with the rest oil and renewable energy.

Petilla said the DOE hopes to release the full details of the fuel mix within the year.

He stressed that the mix is “non-firm,” which means it cannot be mandated. In the Philippines the power generating sector is market driven, he added.

The fuel mix policy will come amid the entry of LNG players in the country. Petilla has said that a fuel mix policy may be necessary to keep domestic pump prices affordable to consumers because LNG is expensive.

LNG is natural gas that has been converted into liquid for ease of storage or transport.

Numerous power players have already expressed interest in developing LNG terminals around the country.

Pilipinas Shell Petroleum Corp., for instance wants to build an LNG regasification terminal beside its refinery in Batangas with an estimated cost of $1 billion.

Lopez-led First Gen Corp., meanwhile, is developing up to 1,300 megawatts of power generation capacity fueled by natural gas from its facility in Batangas

The Energy chief said the situation is expected to improve - meaning LNG prices can go down - when the LNG market in the Philippines matures.

The DOE is currently crafting an LNG masterplan to guide investments in the sector and attract LNG players in the country. 

It is also looking at nuclear energy as a possible energy source for the Philippines on a long-term basis.

 “We are looking for power diversification so we are looking for all sources such as coal, natural gas and renewable. Maybe on a long-term basis, even nuclear power plants,” said Energy Undersecretary Loreta Ayson during the Philippine Economic Briefing at the Philippine International Convention Center in Pasay City.