by Myrna Velasco October
24, 2016
To get discussions
moving to the next level on the proposed energy mix for the country, former
Energy Secretary and PHINMA Energy President Francisco L. Viray offered
insights on what metrics the energy planners shall be assessing and taking into
consideration for the policy.
At this stage, energy
mix had become the industry’s buzzword but the Department of Energy (DOE) is
still at ground zero when it comes to the specifics of the plans and parameters
for such policy crafting.
The fixed 30-30-30
prescription of technology sharing for coal, gas and renewables remained a deep
puzzle and still too-complicated terrain for the industry players, hence, they
have been seeking for clarity of the energy mix economics being presented by
the energy department.
In an exclusive
interview, Viray noted that the starting point for the DOE planners shall be to
analyze the power system’s load duration curve (LDC), and from there, they
should “determine the mix on the basis of the components of the load curve –
namely, the system’s need for base load capacity, mid- to peak load and then
the system’s need for ancillary services (reserves).” A load curve is applied
in power generation to demonstrate the relationship between the generating
capacity requirements of a system and how that capacity is being utilized.
Viray said it is
paramount for energy planners to “determine technologies for each component of
the load curve using basic rule of power system economics of a
vertically-integrated utility.”
In essence, that must
reflect realities that the base load capacities “are supplied by technologies
with high capital expenditures (capex) and low variable fuel costs,” he said.
In the Philippines, that reality is the dominance of coal-fired power plants;
while for mid-merit to peak load capacities, these are often supplied by
technologies with “low capex and high variable/fuel costs.”
Following that, Viray
emphasized the need to distribute the mix among the technologies based on the
realities of power developments trended by the private investors in the
restructured electricity sector.
Factoring all of that,
he emphasized that the other important step for energy planners would be to
optimize such capacities, but with consideration of the constraints posed by
each technology.
The deeper technical
and economic analysis of the proposed energy mix will then require them to
flesh out the more detailed elements, such as cost of electricity generation,
environmental impact, and security of supply relating to indigenous versus
imported fuels; weather dependency of technologies and geopolitics.
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