YEARENDER) Energy dept powers up new administration’s plan to provide affordable and clean energy

Energy Secretary Alfonso Cusi has jump-started the Duterte administration's agenda to provide the country electricity at competitive prices, while setting new policies that would benefit the people.

"I am committed to accomplishing the marching order of President Rodrigo Duterte to provide our people the chance to enjoy a more comfortable quality of life through the delivery of safe, stable and reliable electricity services," Secretary Cusi said.

Shortly after assuming his post as energy chief, Cusi held a dialogue with the Manila Electric Co. (Meralco) to discuss the latter's ongoing construction works, concerns such as right-of-way and peace and order issues, and other barriers to the immediate energization of target communities. He also urged Meralco to provide electricity to more poor areas, naming Smokey Mountain, Payatas and Muntinlupa, and to check relocation sites that are potential fire hazards.

From July 8 to Oct. 14 last year, the Department of Energy (DOE)-Meralco partnership energized a total of 18,026 households in Barangay Gaya-Gaya (Towerville) in San Jose del Monte, Balagtas, Sta. Maria and other municipalities in Bulacan; San Pedro, San Pablo and Calamba in Laguna; Angono , Cainta and other parts of Rizal; Happy Land Aroma, the BASECO Compound, Isla Puting Bato and the Parola area in Tondo, Manila.

To address the spate of yellow alert status declared by the National Grid Corp. of the Philippines (NGCP) back in August, the DOE assessed whether there were enough measures for power generation companies to ensure that their power plants are in good shape to meet their obligations to their customers.

"We are keen on improving the power supply situation in the country. We will strengthen the policies and programs and we will work with the Energy Regulatory Commission (ERC) to ensure that all standards are enforced to ascertain reliable, stable and reasonably priced electricity, because we cannot let the people suffer from power interruptions," Cusi said.

The DOE said it was looking into the provision of replacement power for contracted capacities and the creation of technical audit teams to assess the operations and contracts of generation companies and distribution utilities, as well as strengthening the promotion of energy investments to augment the supply of electricity in the country.

Acknowledging the bottleneck in the permitting processes for energy projects and fuel operations, the energy chief said they should be transparent and predictable.

Cusi meanwhile also urged the National Electrification Administration (NEA) and National Power Corp. (Napocor) to "go down to the cooperatives" and address their issues and concerns, such as ensuring right-of-way for the delivery of electricity, including the interconnection of islands; pushing for tax reforms to address consumer concerns; and putting up a One-Stop Shop and Fast Lane for the processing and issuance of permits and licenses of energy projects.

Power mix

Moving from the energy mix of the previous administration -- composed of 30 percent coal, 30 percent natural gas, 30 percent renewables and 10 percent for other resources -- Cusi pushed to alienate the fuel mix and let the power players compete for better prices. "We want it to be competitive, so it's not possible to have a quota," he said last month.

He however said the system requirement of the grids should be composed of 70 percent baseload (running on 24/7 basis), 20 percent mid-merit (running on long hours but not 24/7) and 10 percent peaking (with easy start-up and can be used during peak hours). In this regard, Cusi said, power developers can compete with one another accordingly and can picture the situation in each of the main grid for the kinds of investment needed.

The department inaugurated four power plants last year -- the 405-MW FDC Misamis coal, 97-MW Avion natural gas, 414-MW San Gabriel, and 150-MW Panay coal.

Cusi however noted that the country's demand for electricity will rise by 70 percent of its current dependable capacity by 2030, skyrocketing from 17,925 MW to 30,189 MW. He stressed that the country needs to build a capacity of 1,100 MW per year.

The energy head further made it clear last November that he does not support the expansion of the feed-in tariff (FiT) -- a subsidy granted to power developers of emerging renewable technology -- pointing out that it will only make life more difficult for consumers who are already burdened with high electricity bills.

"I've already talked with the Climate Change Commission international organizations (for a funding for FiT), not for our people to be burdened for this, motivating them to do something or try something," Cusi said.

Cleaner fuel

Following its review of the energy and power mix, the DOE embarked on fuel diversification that envisions achieving energy security but with preference for cleaner fuel, reducing dependence on fossil fuels and working towards reducing greenhouse gas emissions.

The DOE said it is moving to realize its goal to expand renewable energy capacity in power generation by 2030.

Looking at all viable alternative energy sources, Cusi said, "The DOE is evaluating the use of nuclear energy and its possible contribution to the energy mix. But initial steps have to be made first, such as the establishment of a Nuclear Energy Program Implementation Organization (NEPIO), creation of a National Policy and Program on Nuclear Energy and even extensive public consultations to identify the public's concerns or reservations on nuclear energy utilization."

The energy chief meanwhile disclosed the administration's plan to scrap the privatization of the 982-MW capacity of the Agus-Pulangi hydropower plants to impoverished areas and various Philippine Economic Zones Authority in Mindanao.

"I wrote a letter to PSALM (Power Sector Assets and Liabilities Management Corp.) to allocate the output of the Agus-Pulangi power plants to the ARMM region and Maguindanao to develop the areas and Philippine Economic Zones Authority sites to encourage manufacturing," he said last November.

Cusi is also pushing for the inter-connection of the Visayas and Mindanao grids through the project of the NGCP. He said the power link could be implemented during his term at the department. A feasibility study on different routes to connect the two main islands is being done.

Mindanao is also expected to benefit from the full implementation of the Wholesale Electricity Spot Market (WESM) in the region, as the Philippine Electricity Market Corp. (PEMC) targets to start it this year.

Overall, electricity prices fared better last year as the PEMC bared trading prices at the WESM hit its five-year lows last November at PHP2.27 per kilowatt-hour caused by the higher energy volume offers in the market and colder temperature.

Shell's debut at the Stock Exchange

A total of 18 years in the making and spanning four presidents, Pilipinas Shell Petroleum Corp. finally made its debut at the Philippine Stock Exchange last year, as required under the 1998 Oil Deregulation Law. The oil giant offered 10 percent of its common stock, amounting to 300 million shares, last November 10.

"By its entry to the stock market, Pilipinas Shell subjects itself to State regulation and public scrutiny on another front, this time as a publicly listed company," Cusi said, adding that the company "will owe utmost diligence and protection not only to consumers in the form of cleaner and more affordable petroleum supply, but to the investing public as well, in the form of high-value and profitable investments".

Controversy at the ERC

The energy sector was not without controversy last year, after ERC director Francisco Villa Jr.'s suicide was linked to corruption in the commission. President Duterte threatened to abolish the ERC if its commissioners refuse to resign. For his part, Cusi urged ERC chairman Jose Vicente Salazar to take a leave of absence to make way for an independent investigation on the controversy. Salazar obliged last December, going on a one-month leave.

Meanwhile, the oil benchmark Dubai crude, which majority of Filipino oil firms rely on for supply, ranged from USD45.83 to USD43.78 per barrel from June to November, while major international organizations are estimating oil prices will rally from USD50 to USD60 per barrel this year.

As of Jan. 1, gasoline prices in Metro Manila ranged from PHP36.90 to PHP47.90 per barrel and have a common price of PHP46.30 per barrel.

Source: Philippines News Agency

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