Danessa Rivera – The Philippine Star
June 6, 2022 | 12:00am
The country needs to build more power plants to meet the ever-growing power demand and to create a truly liberal electricity spot market, but government must lay down clearer policies on the generation mix, business titan Manuel V. Pangilinan said.
“We just have to build more power plants,” Pangilinan said in an interview aired over The Chiefs on One News channel Friday night.
He said the country has not added enough generating capacity since the MVP Group bought into Manila Electric Co. (Meralco) in 2009.
“You know, it dates all the way back to 2009, when we invested in Meralco,” Pangilinan, who chairs the country’s largest power distribution utility, said.
“And we have not added significant capacity to raise the margin and create a truly free market in this spot market,” he said.
Without significant new capacities in the power grid, yellow alerts have been common in the power grid, especially during dry months.
“I think we’ve seen a number of yellow alerts in the past few months and we just don’t have enough (capacity),” Pangilinan said.
The National Grid Corp. of the Philippines (NGCP) raised yellow alert notices in the Luzon grid in May, June, July and October last year due to insufficient supply.
Last month, some generating units extended their maintenance shutdowns while others derated to decrease their committed generation output which led to yellow alert notices raised on the Luzon grid.
A yellow alert is issued when the excess power is insufficient to meet the transmission grid’s regulating and contingency requirement, pegged at the time at about 495 MW and 647 MW, respectively. While it does not lead to power interruptions, it pushes up prices in the wholesale electricity spot market (WESM).
“A spot market like that would operate well if you have significant margin to demand,” Pangilinan said.
He said the country has not added significant generating capacity due to lack of clear policies on generating mix.
“There’s no policy on fuel, what power plant we will build. Is it coal, is it gas, is it diesel?” he said. “So we need…to understand where we’re going in terms of (technology).”
The businessman cited issues in sourcing fuel for gas and coal.
“The problem now is sourcing of fuel, because with gas supplies, gas prices are volatile, gas supplies are volatile as well. as we understand it, it’s difficult to get long term gas supply. And at what price? The same goes for coal. Indonesia has banned coal for a while, so we were very concerned on where do we get the coal and where do we turn,” Pangilinan said.
On renewables, the people need to understand that pursuing and developing clean power sources would have a higher price tag.
“Renewables also, people don’t understand (that) it’s expensive. And people don’t want to pay the price…We want renewables and we want it cheap. (But) there’s no such thing exists in this planet, not yet anyway,” Pangilinan said.
Under the National Renewable Energy Program (NREP) for 2020-2040, the Department of Energy (DOE) has set a target of 35 percent share of renewable energy in the power generation mix by 2030 and 50 percent share by 2040.
To meet these targets, the country needs to develop around 34,000 MW of renewable energy installations by 2040.