Napocor prefers RE projects for Spug areas

Business Mirror
THURSDAY, 22 SEPTEMBER 2011 20:55 PAUL ANTHONY A. ISLA / REPORTER


THE National Power Corp. (Napocor) on Thursday said it would push for the development and construction of renewable-energy (RE) projects, notably in remote or missionary areas of the country, since RE power generation is cost-effective than operating coal- and oil-fired power generation plants.


Citing the escalating price of fossil fuels, Froilan A. Tampinco, Napocor president, told reporters in an interview that he would recommend the establishment of RE power plants in remote areas where the Napocor’s Small Power Utilities Group (Napocor-Spug) operate.


Napocor-Spug is primarily tasked by government to generate and supply electricity among remote or missionary areas not reached by the country’s main power transmission supply grid.


Tampinco, however, stressed he would ecommend RE for Spug areas provided their equivalent generation costs would bring about a net lowering in the existing subsidy.


He further explained that RE sources such as hydro, solar and wind power are abundant in the country and could be acquired almost at no cost, unlike coal and oil which have be imported and paid in dollars from oil-producing countries.


Tampinco singled out Catanduanes) as among the Spug areas that has achieved initial success in RE power generation with the completion and activation of one of its three RE-based small hydropower plants by Sunwest Water and Electric Co. Inc (Suweco) that could now generate about 1.5 megawatts (MW) of electricity. A total of 6.4 MW can be generated from the same Suweco plant after the projected completion and activation of the rest of the two hydropower plants. Suweco has a supply contract with the First Catanduanes Electric Cooperative (Ficelco).


In a recent House Committee on Energy meeting, Tampinco said Napocor-Spug plants are heavily subsidized by Napocor since the cost of generating power is higher than the socially acceptable power rate. “In Catanduanes the generation cost alone is P13 per kilowatt-hour [kWh], while the socially accepted rate is only P6.60/kWh,” he explained.


He said the subsidy is sourced from the Universal Charge for Missionary Electrification that consumers pay to power retailers like the Manila Electric Co., which are remitted to the Power Sector Assets and Liabilities Management Corp. and later to Napocor.


Tampinco revealed that Suweco’s cost of generating power is P5.39/kWh and it sells at P5.70 kWh, which is still lower than the P6.54/kWh.