DOE wants entry of non-flexible baseload plants moved to 2029

12/10/2019

https://www.doe.gov.ph/energist/doe-wants-entry-non-flexible-baseload-plants-moved-2029

The entry of greenfield non-flexible power generating facilities as baseload capacity, which could cover coal technology, is being moved to 2029 or 10 years from now, according to the energy planning trajectory being set forth by the Department of Energy.

That was laid down by Energy Undersecretary Felix William Fuentebella in a recent Energy Investment Forum hosted by the department, with him noting that this is a plan currently under review by the power bureau of the DOE.

He had not given specific parameters yet on why the accommodation of non-flexible plants is being pushed 10 years from now despite forecasts of supply-demand equilibrium by year 2021-2022.

The energy official noted that at present, 80-percent of the country’s baseload capacity are non-flexible plants, “so we are reviewing it.”

It was not specifically stated that this is an aim to temporarily halt new coal plant developments, but the categorical assertion on “non-flexible baseload capacity” is deemed warranting that.

The study and review of the modified energy planning of the DOE are currently being carried out based on the instructions of Energy Secretary Alfonso G. Cusi.
At its completion, the DOE will be issuing a policy direction as to the fate of the non-flexible plants primarily within the 2020-2028 timeframe.

Industry players, nevertheless, indicated that the proclivity of the DOE to temporarily pause on installations of non-flexible plant developments could be part of the play to provide market leverage for gas – since several investments for liquefied natural gas (LNG) had already been given go-signal by the department.

It was gathered that lenders on the proposed LNG ventures as well as the accompanying gas-fed power installations are keenly requiring that these be backed with power supply agreements (PSAs), preferably with the country’s biggest power distribution firm Manila Electric Company.

Gas, in particular, is seen as the “perfect match” for the integration of more variable renewable energy (VRE) installations in the power system – which will be ushered by the implementation of the government-underpinned Renewable Portfolio Standards (RPS) starting next year.

In energy planning and development sphere, gas is seen as the most flexible generating capacity – as it could be set for baseload, mid-merit and peaking as the power grids would need it.