DoE: Dumping fuel mix policy boosts baseload competition

Posted on December 05, 2016
http://www.bworldonline.com/content.php?section=Economy&title=doe-dumping-fuel-mix-policy-boosts-baseload-competition-&id=137292


THE Department of Energy (DoE) has maintained its position that it will abandon a fuel mix policy that sets a “quota” for each energy technology, saying developers should be left to decide the kind of power plants they want to build based on the country’s power system requirements.

“We want it to be competitive so it’s not possible to have a quota,” Energy Secretary Alfonso G. Cusi said, in response to a continuing clamor from some developers for the DoE to set a limit on the allowed capacity of new power plants that run on coal or oil-based technologies.

He said industry participants should not expect a fuel mix policy similar to what was adopted by the past government, which aspired to limit the sourcing of new power capacity to no more than 30% for coal, 30% for natural gas, 30% for renewables and 10% from other sources including diesel-fired plants.

Mr. Cusi said on his watch, industry should get used to a mix that set by a system requirement of 70% baseload, 20% mid-merit and 10% peaking power.

“We want an energy mix where there will be competition,” he said. “So coal, gas, geothermal, hydro or nuclear can compete in that 70% baseload.”

Mr. Cusi previously said that the country’s demand for electricity should reach 30,189 megawatts (MW) by 2030, or nearly 70% more than the current dependable capacity. He had said that around 1,100 MW more will be needed per year.

With dependable capacity currently at 17,925 MW and a number of ongoing projects that have committed to deliver 6,178 MW, around 6,086 MW more is needed.

The secretary said that a policy that is set by the system’s power requirement will lead to greater competition and the lowering of electricity costs for consumers.

Based on the DoE’s initial evaluation, the Philippines requires 70% in baseload power, which is provided by plants running on coal, natural gas and geothermal power on a 24-hour basis.

Nuclear energy has also become a baseload option, although the department does not expect this to come any time soon because of existing hurdles, including the lack of a regulatory policy, funding and wider social approval.

Around 20% will be needed from mid-merit plants, mostly running on natural gas. Only 10% will come from peaking plants or mainly oil-based facilities and renewable energy resources wind and solar, whose output peaks at around the same time the demand surges to its highest level. -- Victor V. Saulon