Industries back DOE’s flexible power gen mix


THE Federation of Philippine Industries (FPI), which is composed of 34 industry associations and 120 corporation manufacturing members, said on Friday it supports the Department of Energy’s (DOE) bid for a flexible power generation mix in the country.

“Secretary Cusi’s pronouncements are consistent with FPI’s stand on certain issues, especially on supporting industrial growth by ensuring stable baseload power supply,” FPI Chairman Jesus Lim Arranza said on Friday.
Energy Secretary Alfonso Cusi earlier said that the DOE will not impose a quota that would limit the technologies that can be utilized by power developers.

“What we need now is sufficient power supply or energy supply regardless of the source, whether it is coal, gas, because we want a sufficient, secure, reliable power source,” Cusi said in an earlier interview.

“Now if we get the amount, like in Davao which has sufficient supply, we have increased capacity. Like what I said before, which comes first, the horse or the cart? So now we have the power in place for the investors to come in. It is not the other way around, which is we invite investors first then we will just put power late. Now the power will be the anchor for the investors to be enticed to come into the Philippines,” he said

He said the DOE will implement a mix comprising of 70 percent base load, 20 percent mid-merit and 10 percent peaking power plants.

FPI welcomed the DOE’s plan, saying that this would indeed promote a more competitive market and eventually lower the power costs that consumers pay, as well as ensure ample supply of power for the country as it moves toward industrialization.

FPI also recognizes that the country needs diversified energy resources, but this can be achieved even without mandating a strict power generation mix that will limit the technologies that will be developed by the private sector.

Several groups have been actively pushing for an energy mix, with caps of 30 percent for natural gas, 30 percent for coal, 30 percent for renewable energy and 10 percent for other fuels, which was the policy of the last administration.

But this will make the mix inflexible and could even cause rate increases that could burden consumers, FPI said.

Allowing all kinds of fuels to compete in the market, as Secretary Cusi argued, would actually lower the power rates because the least costly capacity will be dispatched first, the group said.

At the same time, the flexible power generation mix envisioned by the DOE will encourage power players to continue developing the projects they deem to be the most competitive.

“Mandating an energy mix policy that caps the technologies will not only cut out flexibility but will also go against the idea of having a competitive market, where all suppliers can make offers,” Arranza said.

“Also, limiting the kind of technology to be developed will just unnecessarily block development of power plants and hinder more investments,” he added

The government should instead let the market forces work and just ensure a level playing field to avoid abuse and protect consumers’ welfare, the group said.


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