Energy sector players raise 2016 concerns


The Department of Energy (DOE) expressed concerns over the stability of fuel supply this year, particularly during the election period, as local demand increases while world oil prices remain unpredictable.

“Not much with electricity, but we are more concerned with fuel supply during the campaign period,” Energy secretary Zenaida Monsada told reporters.

She noted that candidates were traveling from one province to another for the elections, thus requiring consumption of more petroleum products.

Monsada said that though power supply was seen to remain stable, there were other related concerns due to the effects of the ongoing El Nino phenomenon.

She did not give a definite power outlook, saying the department still has to present its assessment and recommendation to President Benigno S. Aquino III.

Monsada gave assurances that the department would create a task force to look into power issues related to the forthcoming elections.

Manila Electric Co. (Meralco), meanwhile, is more concerned on the post-election period, which is after summer.

”The problem next year is the generation companies are trying to avoid the scheduled shutdowns, so part of the pressure is moved to the second half,” Meralco president and chief executive officer Oscar Reyes said.

He explained most of the power plant shutdowns have been scheduled for the first half of the year.

He also expects better power supply next year as the 100-megawatt (MW) Avion and 414-MW San Gabriel power plants will start commercial operations soon.

As to oil prices, local firms said they could not assess when these would bounce.

“At the rate world oil prices have been behaving, even analysts admit that no one could accurately and consistently forecast the price of oil more than a few months ahead let alone for years or decades in the future,” Eastern Petroleum chief executive officer Fernando Martinez said.

PTT Philippines Corp. said the bounce could occur if turmoil breaks in the oil exporting countries.

The oil price crash started in the international market in 2013, when shale oil became a threat to crude oil.

The Organization of Petroleum Exporting Countries (OPEC), which supplies most of the world’s fuel, moved to defend its market share by reducing crude prices to compete with shale oil.

On the local front, the Energy Regulatory Commission (ERC) is re-organizing posts and hiring more people in a bid to improve operations.

ERC commissioner Jose Vicente Salazar said the agency would hire 508 more people “to strengthen legal offices, services and elevate divisions to create services.”

Field offices are also included in the enhancement program.

Salazar added the commission was also planning to upgrade its IT infrastructure, which would help stakeholders submit documents through the internet.

The ERC has created a technical working group (TWG) for the project, which will be helped by experts from the World Bank.

Salazar noted that the bank wanted to fund the project but the ERC declined and instead requested for technical assistance.

The ERC is targeting to complete the project study in 3-4 months from its planned start in January.

Meanwhile, National Power Corp. (Napocor) is set to provide off-grid or Small Power Utilities Group (SPUG) areas with 62 more generator sets this year.

Napocor currently has 290 SPUG power plants in islands, powering 800,000 households.

The National Electrification Administration (NEA) also reported that its Sitio Electrification Program (SEP), which targets to power 32,441 sitios by the first quarter of 2016, is on track.

In November, NEA electrified a total of 30,023 sitios.

Last year, the DOE also conducted the Philippine Energy Contracting Rounds 5 (PECR-5) for petroleum in June and the Open and Competitive Selection Process (OCSP) for potential hydro and geothermal project sites last May.

The PECR-5 had a low turnout with two firms qualifying for three petroleum blocks, while the OCSP had better results with 31 bids for 14 hydro sites and eight bids for two geothermal prospects.



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