Freeman Cebu Business

Phl short-term energy measures very costly

Carlo S. Lorenciana - The Freeman

CEBU, Philippines - The European Chamber of Commerce of the Philippines said the short-term measures the Philippine government is planning to take to avert the looming energy crisis can be very expensive and may result to increase in power costs.

Vice President Guenter Taus of ECCP Board of Directors said the bilateral foreign chamber is recommending concrete and constructive solutions which can be administratively executed.

Taus, who was in Cebu yesterday for the Energy Smart Cebu 2014 conference, urged government leaders and the private sector to invest in energy efficiency which could have a pay-back period of three to five years; and in fact, several banks are committed to finance energy efficiency initiatives of companies.

ECCP has been pushing for energy conservation particularly in businesses in the country, targeting to save 20 to 30 percent of electricity.

Efficient energy consumption should also be implemented by all sectors in the society – government, households, private sector, industrial zones, malls, call centers, among other industry consumers.

Executives of various local government units and the national government in general should strongly promote investments in energy saving measures in many aspects, he added.

"We need reliable, affordable and competitive power. Without power, we can't drive our economy further. So, we really need to act," he stressed, pointing out businesses must really consider conserving power and investing in energy efficiency. As much as 400 megawatts can be saved if only to invest in LED/lighting between now and the end of the first quarter of 2015.

The business group also wanted to introduce a viable interruptible load program to ease energy demand in the country. More commercial establishments should participate in the ILP, which asks them to operate their own generator sets to ease power demand.

In an earlier statement, Henry Schumacher, ECCP vice president for External Affairs, said: "Businesses with large embedded generators make those available during peak demand time. We are working on this in Luzon just now and hope that we can get companies to commit as much as 700 MW for that."

The ECCP official also called on the government particularly the Energy Department to streamline the approval process of the construction of new power plants.

While it takes a minimum of three years to build a power plant in other countries, Taus stated it could not be the same case in the Philippines with all the 162 environmental and other clearances that need to be approved by government agencies.

It is high time that the number of permits and clearances be reduced so investors can move faster in building power plants.

The chamber likewise emphasized the need to remove the power price caps in the electricity spot market so to allow market forces to dictate costs. Spot market means that prices are settled in cash on the spot at current market prices.

The ECCP described the artificial market manipulation as a disincentive that may prevent the private sector from investing in power generation development in the future.

He explained existence of the basic economic supply-demand forces and healthy competition is one effective and sustainable policy to lower power costs for Filipino consumers; thus, creating more attractive electricity prices. This will then invite the private sector to invest in energy projects.

Furthermore, the foreign chamber also suggested the government should develop a sustainable energy mix policy and feed-in-tariff implementation.

With the energy mix policy, the government can consider other energy sources such as coal, geothermal, liquefied natural gas and renewable energy. FIT is an economic policy created to promote active investment in renewable energy sources.

The government should also fast track the tender for the Malampaya banked gas which is expected to have an additional gas by 2016 to power a 200-MW plant.

Taus stressed "We have a lot of options. (The government must) show political will to do all these."

In the end, he said, reliable power sector is what sustains economic momentum and maintains the confidence of investors in the country. (FREEMAN)


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