December 26, 2016 By Lenie Lectura
THE Duterte
administration’s campaign “Change is Coming” has, indeed, brought
change in a positive way, as claimed by stakeholders in the energy sector.
Six months after
President Duterte was sworn into office as the 16th President of the
Philippines, a former energy secretary noted that competition has improved for
the better.
“Yes, competition has
flourished, had attracted and is continuing to attract more investors and
players,” said Francisco Viray, who is also the concurrent president and
CEO of Trans-Asia Oil and Energy Development Corp., when asked to provide
insights of the changes he has noticed as the year 2016 ends.
“Prices are relatively
lower compared to previous years. Sufficiency of supply is assured up to 2020
in all grids,” Viray added.
The Manila Electric Co.
(Meralco) noted that innovation and technological transformations, increased
productivity, international quality product and service offerings, and
resilient brick-and-mortar business remain high on the business agenda of the
company and its subsidiaries.
“The new
administration’s indicative openness to unsolicited offers for major projects
is very encouraging,” Meralco Chairman Manuel V. Pangilinan said.
Meralco’s
power-generating arm, MeralcoPowerGen (MGen), is involved in a number of power
projects. With partners, MGen is schedule to commission by middle of 2019 a
455-megawatt (MW) coal plant in Mauban, Quezon. It is also finalizing all
development works to enable to achieve financial close and commence
construction of a 300-MW coal plant in Subic, Zambales. Construction of the
first 600-MW coal plant in Atimonan, Quezon, is targeted by 2020, while the
second 600 MW by early-2021. There is also a 700-MW coal plant in Calaca,
Batangas, being eyed.
A former energy
undersecretary and now the CEO of GE Philippines said the country is “in
good shape” in terms of power-generating capacity.
“This year we saw new
power capacity coming online and more projects getting sanctioned for
development. From a supply security standpoint, it is very encouraging to note
the positive signals being sent by the market to power developers,” Jose
Victor Emmanuel de Dios said.
Power supply in Mindanao,
for instance, is seen to almost double with 1,000 mW more of additional
capacity that would come from power producers, such as Alsons Power, SMC Power,
FDC Misamis Corp. and Aboitiz Power Corp. This new capacity adds to Mindanao’s
installed capacity of 2,414 mW as of 2015, of which 2,044 mW are considered
dependable.
More power projects are
also lined up in Luzon and the Visayas, as well.
Latest data from the
DOE incidate that by 2020 the committed projects in Luzon could reach
4,101.375 mW for Luzon, 1,687.94 mW for Mindanao, and 471.58 mW for the
Visayas.
The data further show
that some 17,145.415 mW of indicative capacity is listed to come in by 2021 to
2022 across the three grids, with the bulk, or 11,607.505 mW, to be located in
Luzon.
In the Visayas and
Mindanao there are around 3,027.97 mW and 2,509.94 mW of indicative capacity.
With abundant capacity,
this could translate in lower electricity prices.
According to the
Philippine Electricity Market Corp. (PEMC), operator of the Wholesale Electricity
Spot Market (WESM), prices at the electricity spot market have been on a
downtrend this year owing to the continued stability of power supply and lower
demand caused by the cooler temperature.
There is also adequate
capacity from old and new power generators, particularly from renewable-energy
(RE) projects.
In fact, the effective
settlement spot prices (ESSPs) on the WESM in November plunged to P2.27 per
kilowatt-hour (kWh), the lowest since January 2011.
ESSPs refer to the
average prices paid by wholesale customers for energy purchased from the spot
market.
PEMC President Melinda
Ocampo said the decrease in WESM prices was driven by higher energy volume
offers in the market and colder temperature. Such a sharp decline in the market
prices is welcome as long as wholesale customers, like distribution utilities,
pass on the historically low market prices to their end-users.
“You can see that there
is a lot of available capacity. Plus, RE also has a big impact in lowering
prices, because of the must dispatch and priority dispatch,” Ocampo said.
She said this trend
would continue in the early part of 2017, mainly on account of a cooler
temperature in January and February, which normally results in lower
demand.
The WESM is a
centralized venue for buyers and sellers to trade electricity as a commodity
where its prices are based on actual use (demand) and availability (supply).
Meanwhile, Alsons
Executive Vice President Tirso Santillan said business has never been this good
for the company.
“Our own business is on
track. Our expansion plan has been on track for the last few years. We’ve done
very well. All our plants are duly contracted. We think this is the right
approach. Before you build, you should be fully contracted. Others build first
and contract later, that’s expensive,” Santillan said.
AboitizPower President
Antonio Moraza said power firms are aggressive in investing into more power
projects as they see demand picking up in the years to come. “I think the
drafters of the Epira [Electric Power Industry Reform Act] should be very
proud. Power plants of all sizes and types are being built by the private
sector where power sufficiency is positive and prices coming down.”
Just recently, the DOE
has cleared 16 power projects with nearly 2,500 mW in capacity for grid
impact studies (GIS).
Eleven projects are
seen to generate 1,877.9 mW of power. The GIS for these 11 projects were
cleared by the agency in October.
The remaining five
power projects, with a total installed capacity of 566.7 MW, received the green
light from the DOE to proceed following the approval of their GIS.
A clearance for the
conduct of a GIS is necessary for a power company before it can proceed with
the construction of its power project. It is necessary in determining if the
electricity to be generated by the power project can be absorbed by the grid.
Among the planned power
projects include the 600-mW coal-fired thermal power plant of SMC Global
Power Holdings Inc. in Sariaya, Quezon; the 344-mW subcritical coal-fired power
plant of Masinloc Power Partners Ltd. in Masinloc, Zambales; and the 64-mW
Power Barge 103 of Phinma Energy Corp. in Lapu-lapu City, Cebu.
As of November 2016,
the DOE issued GIS clearance to the 4.5-mW Sawaga River mini-hydro power plant;
the 6.2-mW Katipunan River mini-hydro power plant; the 500-MW LNG-fired power
barge; the 24-mW biogas power plant; and the 32-mW SPC Power Barge 104.
On the policy side, the
DOE is working on a comprehensive and responsive energy mix policy to support
and sustain the growing economy, while also guiding energy developers on the
business environment.
In the power sector,
for instance, Energy Secretary Alfonso G. Cusi mentioned about having to
classify power plants into baseload (running on 24/7 basis), midmerit (running
on long hours but not 24/7) and peaking (with easy start-up and can be used
during peak hours). In this regard, 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.
According to Cusi, the
Philippine energy sector offers a number of investment opportunities,
especially that incentives, sound policy mechanism and regulatory framework are
in place.
“We are supporting the
advancement of the Philippines national social and economic agenda, by
undertaking policy and market reforms complemented by an active stewardship of
the public interest in the country’s energy resources and
industries.” Cusi further stated.
No comments:
Post a Comment