By
Lenie Lectura - February 14, 2017
GLOBAL Business Power
Corp. (GBPC) urged the government to issue a more defined policy that will
guide power-plant operators and owners regarding their investment plans in the
years to come.
“We are business
developers. We build power projects in line with government policy. Just give
us a clean state of rules then we, power developers, will pursue these
projects,” GBPC Assistant Vice President for Business Development Janssen de la
Cruz said on the sidelines of the Asian Power Utility Forum held in Makati City
on Tuesday.
GBPC is one of the
leading independent-power producers in the Visayas and Mindoro, with facilities
located in Cebu, Iloilo, Aklan and Mindoro.
When asked what
existing policies in the power sector need to be improved, he identified the
Competitive Selection Process (CSP), among others.
With
CSP, distribution utilities (DUs) and electric cooperatives (ECs) are
required to undertake competitive bidding to secure power-supply agreements
(PSAs) with generation companies.
“The regulatory
environment now is CSP. For lack of a better term, the cheapest guy wins. For
as long as there’s coal, then coal will always have the advantage because it’s
going to be the cheapest in the room. Where is this going? It depends on the
regulators,” said de la Cruz during a panel discussion.
He said as long as CSP
is enforced, then “it will predominantly be coal because of its price”.
I think it will stay
the same for the moment until they change the selection process,” de la Cruz
said.
The company official
said power firms should be ready with the impending overcapacity in power
generation as anticipated to happen between 2020 and 2025.
“The problem is a lot
of the reliable 20-year-old plants will eventually go offline and we must be
prepared for that. Short term to midterm, I don’t think we will be experiencing
a lot of demand versus supply. There will be a little bit more supply available
because of supply coming in. But if we do not start building and planning
now…there has to be some security for us developers to start telling our
investors it’s ‘go build new plants going forward,’” de la Cruz said.
In Mindanao oversupply
is happening now, with 1,000 megawatt more of additional capacity coming in.
Energy Secretary
Alfonso G. Cusi said he is aware of the situation. He, however, downplayed the
possible disadvantages, if any, that may result in the oversupply of power.
“I just had a meeting
in Mindanao. The generation companies there see Mindanao has already excess
power. The latest peak demand is 1,600 MW and Mindanao is now running at
2,800 MW of power supply and another 1,000 MW more forthcoming up to
late-2017. So, they are saying there could be excess capacity. But I
asked this. Which is a better problem? Having a power shortage or excess in
power?” Cusi said.
From the point of view
of the consumers, having excess power supply is a “welcome development”.
“It really depends on
who is talking. The one selling power says there is oversupply. From the point
of view of the regulators, we would like to have sufficient supply to encourage
development in tourism, for instance. It is also good for the households.
Manufacturing plants also need power. We have to factor all of those.
Oversupply, in case there is one, that will not be a problem,” Cusi said. “I
don’t care where power is coming from for as long as there is power. Beggars
can’t be choosers.”
Latest data from the
Department of Energy said by 2020, the committed projects in Luzon could reach
4,101.375 MW; 1,687.94 MW for Mindanao; and 471.58 MW for the Visayas.
The data further showed
17,145.415 MW of indicative capacity are listed to come in by 2021 and 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.
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