More investments in power sector sought

Richmond Mercurio – The Philippine Star

February 15, 2023 | 12:00am

MANILA, Philippines — Power producers are seeking an improvement in policies to encourage more investments in the power generation sector.

Philippine Independent Power Producers Association Inc. (PIPPA) president Anne Estorco Montelibano said power generators want to see proper regulation and policies that would reflect the true business of the industry.

She said the country’s power generation sector has absorbed “a lot of variables” and “been shouldering most of the costs already.”

“Right now our regulators are very specific on cost and they focus on the price of electricity and what is being passed on to customers… instead of the impact to investors and power generators,” she said.

“So in its effort to cushion the effect, they put it on our side, which is an unhealthy way of thinking about it because we are not really delving into the actual problem, which is that there are no generators that are willing to continuously invest,” Montelibano said.

Should this continue, Montelibano said there would be no players in the market that would make a healthier mix of technology, which could result in lower power prices.

“Passing on costs to investors is a band-aid solution, when in fact you have to examine policies that would encourage investment, and we have been – I’m speaking for power generators – shouldering most of the cost already,” she said.

She said PIPPA is pushing for the review of the current secondary price cap and reliabilty standards as these are outdated and do not reflect the current situation, especially on fuel prices.

The group has also been pushing for the removal of significant barriers to entry for power generators to make electricity rates more competitive in the country.

These include transmission connection issues as well as permitting and financing challenges.

PIPPA is a group of 28 generator members with 18,132-megawatt grid installed capacity.

Meanwhile, Energy Secretary Raphael Lotilla is pushing for investments in research and development for renewable energy, citing innovation in the sector as a key to the country’s energy transition.

“By embracing technology and innovation, we can develop a cleaner and greener energy system that will help us mitigate the effects of climate change and contribute to preserving our planet for future generations,” Lotilla said.

He said that while the shift away from fossil fuels to cleaner and more sustainable forms of energy is a great challenge, innovation in renewable energy such as wind, solar, geothermal, biomass and hydropower would be crucial to the country’s energy shift.

He said the present pace of technological innovation is paving a new era for next-generation renewable technologies to swiftly emerge.

“The achievements we have made in promoting renewable energy in recent years have been remarkable, and we must continue to support this program by broadening their use, accelerating their deployment, and investing in research and development activities in these areas,” he said.

The Department of Energy (DOE) has identified offshore wind energy as one of its top priorities in the country’s renewable energy sector.

The agency is, likewise, ramping up research and development activities on next-generation fuels such as hydrogen and ammonia.

Nuclear energy is also among the technologies being explored by the country, but it is still considered as a long-term option for the Philippines for power generation.

Nuclear energy is eyed to be included in the country’s energy planning until 2050.

On energy storage system in the power sector, Lotilla said the DOE is nearing completion of the enhanced ESS policy that provides a refined framework for its use.

He said the ESS technologies would serve multiple functions, including energy generation, peak shaving, ancillary services and mitigating the intermittent generation output of variable renewable generating plants, thereby ensuring power quality and system reliability.

“Our approach for transitioning to clean energy also includes energy efficiency and conservation measures and storage solutions, which will help us to use energy more efficiently and effectively,” Lotilla said.