PIPPA seeks gov’t assurance on supply, prices

MANILA, Philippines - The Philippine Independent Power Producers Association (PIPPA), a group of independent power generators, is urging the government to assure sufficient supply of reliable and competitively priced electricity in anticipation of more investments this year.

PIPPA president Ernesto Pantangco said the government should take advantage of the momentum indicated by the historic highs in the Philippine Stock Exchange index (PSEi) and the better-than-expected economic growth in the third quarter of 2012.

 â€œGiven the latest developments, it is already necessary to put up the necessary infrastructures that will secure the continuous supply of electricity,” Pantangco said.

Benchmark PSEi has already breached the 6,000-level, hitting 6,092.53 on Wednesday and is expected to breach the 7,000-mark this year on the back of strong investor appetite for stocks.

Pantangco said one way to provide reliable power, which is competitively priced, is through the utilization of baseload power plants.

 â€œAn unreliable power system charging high energy costs dissuades investments and investors both in the short and long-term.  On the other hand, baseload power plants that run on coal or natural gas produce energy at a constant rate, usually at a more competitive cost relative to other power facilities available to the system,” he said.

Baseload plants are facilities devoted to the production of baseload supply, which refers to the minimum amount of power that a utility or distribution company must make available to its customers.

According to the Department of Energy (DOE), the current electricity consumption rate in the Luzon grid means that one 600-megawatt power plant has to be online each year from 2015 to 2017.

The DOE’s Philippine Energy Plan states that the Philippines needs 11,000 MW in additional capacity until 2030, a projection based on a 4.79-percent annual growth in energy demand.

At present, the country has 13,000 MW in dependable capacity.

Aside from the use of baseload plants, PIPPA is also pushing for the diversification of fuel sources to balance the overall energy mix.

Several power producers are already lining up several projects in preparation for the need for additional reliable and competitive-priced capacity in the next three to four years.

However, one such project, which is targeted to go on stream by 2016 at the Subic Bay Freeport Zone, is facing challenges on the ground.

This is the project of Redondo Peninsula Energy’s (RP Energy) 600-MW coal-fired power plant, which already obtained an environmental compliance certificate (ECC) from the Environmental Management Bureau (EMB).

The power plant is facing a writ of kalikasan case filed by party-list groups in July 2012. The groups said the plant would damage the environment.

RP Energy assured that it is committed to properly address all issues.

For his part, PIPPA’s Pantangco said the different sectors should look deeper into these scenarios and put into consideration the impact on the economy and the people, should the increasing demand for power be unmet.

 â€œWe cannot afford to let the urgent need for power go unaddressed. We will lose the momentum we already have resulting in lost investments and unrealized potentials that could benefit the Philippine economy and ultimately the Filipino people,” he said.