DOE urges more private sector investments in power

MANILA, Philippines – More private sector investments in the power sector are needed as the Philippines sets its sights on raising infrastructure development to service the basic needs of the people throughout the Duterte administration.

The new administration has set a gross domestic product (GDP) target of 6-7 percent in 2016, 6.5-7.5 percent in 2017 and 7-8 percent from 2018 to 2022, hinged on aggressive infrastructure spending.

These growth projections will translate to “higher growth for energy use specifically for electricity is expected, entailing significant amount of investments mainly coming from the private sector,” Department of Energy (DOE) OIC-Undersecretary Mylene Capongcol said during the 4th Annual Philippines Power and Electricity Week yesterday.

Currently, the DOE is in the midst of transition and evaluation, as what DOE Secretary Alfonso Cusi had said.

“In this process, we will make sure that the interest of the end-consumers and investors are balanced and that any actions and policies implemented shall redound to better protection of public interest and keeping and sustaining the robust pace of the country’s economic growth,” Capongcol said.

In terms of new generation capacities, DOE data showed Luzon will need 5,000 megawatts (MW), Visayas with 1,300 MW, and Mindanao with 900 MW until 2030.

To meet government’s goal of a secured electricity supply, Capongcol said the agency is in collaboration with the Climate Change Commission (CCC), National Economic and Development Authority (NEDA) and Department of Environment and Natural Resources (DENR) in crafting a sustainable national energy policy that will decide on the future of coal power projects in the country.

“For now, we encourage power generation using high efficient and innovative technologies to meet the expected demand in electricity,” she said.

To attract new developments in Mindanao, in particular, Capongcol said government is eyeing to put in place an electricity market and to interconnect the grid with the Luzon and Visayas grids.

“This is one of the priorities of Secretary Cusi that the Mindanao grid would be connected to the Luzon-Visayas grid during this administration to allow sharing of excess capacity among all grids all over the country,” she said.

In January this year, the Energy Regulatory Commission (ERC) gave the go signal to National Grid Corp. of the Philippines (NGCP) to conduct of a desktop study and hydrographic survey for the western route of the Visayas-Mindanao Interconnection Project (Cebu-Negros to Zamboanga del Norte).

Capongcol also said the development of renewable energy (RE) projects is also seen to continue as the DOE works on policy mechanisms under the Renewable Energy Act of 2008, namely the Renewable Portfolio Standards (RPS), and the RE Market, where trading of certificates will occur and compliance to RPS will be monitored.

“The implementation of RPS will translate to higher demand for RE necessitating more RE capacities to be put up. We will likewise study further if there is a need for another round of installation targets for FIT or can we now make RE market-based without prejudice to the need of the consumers of having affordable power rates,” she said.

As the country pushes for a balanced energy mix, the DOE official said it is necessary to have more investments in exploring and developing potential areas amid the impending depletion of the Malampaya deepwater gas-to-power project.

“Another option is to enable the importation of natural gas in the form of a liquefied natural gas (LNG) which requires infrastructure to receive, store, re-gasify and transport the imported LNG to the demand centers,” Capongcol said. Earlier, Cusi said there were initial discussions with the World Bank to do a study through the International Finance Corporation (IFC) on converting the mothballed Bataan Nuclear Power Plant (BNPP) into an LNG receiving and distribution center.