DOE taps Japan agency for help in crafting fuel policy mix

MANILA, Philippines - The Department of Energy has sought the help of the Japan Ministry of Trade, Economy and Industry (METI) in crafting the country’s fuel policy mix, Energy Undersecretary Zenaida Monsada said.

 “Japan (METI) is helping us on the fuel mix policy,” she said.

Specifically, Monsada said METI would help determine which would provide the least cost fuel mix and at the same time remain compliant with the Electric Power Industry Reform Act of 2001, the power reform law.

Other factors being considered for the fuel mix aside from costs include impact on the environment, Monsada added.

Initially, the DOE is looking at a fuel mix that would have 30 percent natural gas/liquefied natural gas and 35 percent coal with the rest oil and renewable energy.

The DOE hopes to release the full details of the fuel mix within the year.

Earlier, Energy Secretary Carlos Jericho Petilla stressed that the mix is “non-firm,” which means it cannot be mandated in the Philippines as the power generator sector is market driven.

The fuel mix policy will also come amid the entry of LNG players in the country. Petilla has said that a fuel policy mix may be necessary to keep domestic pump prices affordable to consumers because LNG is expensive.

LNG is natural gas that has been converted into liquid for ease of storage or transport.

Numerous power players have already expressed interest in developing LNG terminals around the country.

Monsada said industry players are keenly waiting for the mix before they can decide on how much they would invest on their respective LNG plans.

Pilipinas Shell Petroleum Corp., for instance wants to build an LNG regasification terminal beside its refinery in Batangas with an estimated cost of $1 billion.

Lopez-led First Gen Corp., meanwhile, is developing up to 1,300 megawatts of power generation capacity fueled by natural gas from its facility in Batangas.

The energy chief said the situation is expected to improve – meaning LNG prices can go down –- when the LNG market in the Philippines matures.