Monday, March 13, 2017

Cusi wants more investments in merchant power plants

By Danessa Rivera (The Philippine Star) | Updated March 13, 2017 - 12:00am

MANILA, Philippines -  Energy Secretary Alfonso Cusi is seeking more investments in merchant power plants to further spur competition in the electricity spot market.
The energy chief is encouraging investors, particularly foreign, to put up new merchant plants, meaning those power plants selling their output to the wholesale electricity spot market (WESM).
“We want real investors willing to take (on) the business and they will cater to the spot market with the intent to, of course, later on being able to enter a contract,” he said.
Cusi said now is the time to invest in merchant plants since the country has a strong growth trajectory and there are more than enough plants coming in in the next couple of years.
He highlighted the country’s growing population and gross domestic product (GDP) “so demand is really growing.”
“The only encouragement is they have to believe in the Philippine economy…which is said to be the fastest growing in the region. Any business man believing in that will be willing to be test,” Cusi said.
Currently, 90 percent of the country’s power supply is sourced from bilateral contracts between power generators and distribution utilities.
This means only 10 percent of the supply comes from the WESM.
The DOE will undertake a study to raise WESM sourcing to 20-30 percent, Cusi said.
“We are looking at 20 to 30 percent (from) merchant (plants),” he said. “As a secretary it’s very important for me to have the PEMC working because of the policy we are implementing.”
PEMC, or Philippine Electricity Market Corp., is the operator of WESM.
There are several merchant plants in the country, such as the 98-megawatt (MW) Avion and  414-MW San Gabriel gas plants of the Lopez Group and the three diesel plants—103-MW Mapalad Power Corp. (MPC), the 100-MW Western Mindanao Power Corp. (WMPC) and the 55-MW Southern Philippines Power Corp. (SPPC) — of the Alcantara group.

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