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Sunday, May 13, 2018 Vol. 13 No. 211
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Stakeholders seek D.O.E. clarification on pronouncement to alter power mix
‘Just let market forces decide’
By Lenie Lectura
ower-industry stakeholders are still clueless on how the Department of Energy (DOE) would implement its plan to alter the country’s energy mix. The DOE’s pronouncement, they said, remains vague and ambiguous, thus, the need for further clarifications on whether it is a policy or a mere guideline. At the end of the day, energy players stressed, market forces should be left as the deciding factor on which energy mix the sector would follow. The proposal involves a possible shift of the current mix to 50-percent baseload and 50-percent flexible plants, from the current 70-20-10 mix in favor of baseload, followed by mid-merit then peaking. The rationale of the proposal is to accommodate renewable-energy (RE) projects that are coming into the grid. Baseload plants are power facilities that operate on a 24/7 basis, while flexible plants are those that are easy to start up, and are able to ramp up their generating capacities immediately, such as natural gas, geothermal and hydro. Mid-merit plants run on long hours, but not on a 24/7 basis.
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Policy or guideline?
“In my view, the key question is whether energy mix is a policy or a guideline. If it is in fact a policy, then the critical issue is how to formulate and enforce the rules. Without specific rules, it becomes mere guidelines, and getting to an eventual mix would be primarily market driven,” AC Energy Holdings Inc. President Eric Francia said in an interview with the BusinessMirror. Francia said as a matter of direction setting, “It does make sense to prepare the system for the growth of variable renewable energy.” This, he added, also would ensure adequate load and minimize use of more expensive energy supplied by peaking power plants. AC Energy currently has 1,300 megawatts (MW) of thermal gen-
50-50 The new direction on the country’s power mix, as the DOE now wants 50 percent of electricity to be supplied by baseload plants, and the other half from flexible power plants
erating capacity and 300 MW of RE. It plans to ramp up its power portfolio to 5,000 MW by 2025.
Deciding factor
Aboitiz Power Corp. President Antonio Moraza, meanwhile, in a text message, said that he is “not fully aware of DOE’s thinking.” “I am sure they have their reasons…. To me, market forces will decide [the] mix. Investors will respond to the need,” he added. At end-2017, Aboitiz Power’s energy portfolio stood at almost 3,000 MW. It expects to add 536 MW more into its generation portfolio with hydro plants Maris Canal and Manolo Fortich, plus its baseload plants Pagbilao 3 and Therma Visayas online. It has set a goal of 4,000 MW by 2020.
Broad choice
Manuel V. Pangilinan, chairman of Manila Electric Co. (Meralco), said prices play an important role in determining what type of energy source one must purchase. “You have two broad choices. One is a predetermined mix of energy sources. The question is whether that is a wise thing to do given the uncertainty of prices of crude, gas, solar and the technological advances that will impact the pricing of fuel sources,” he said. Continued on A2
Ed Davad
Six years hence, ₧54-B MRT 3 buyout plan still in limbo
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By Lorenz S. Marasigan
ECTIFYING what was deemed as a “messy” contract with a private rail company has been on the government’s drawing board for over six years now. Up to this day, however, the multibillion-peso initiative remains in limbo. PESO exchange rates
The P54-billion buyout plan for the Metro Rail Transit (MRT) Line 3—commonly seen as the most problematic of all three overhead railway systems in the Philippines—has yet to move an inch from the 2012 plan. It has been a six-year rollercoaster ride for the program, as government agencies and branches could not align themselves on the manner of executing the plan, or just simply how to move for-
ward with it. Today, with the new administration on board, the plan is still in limbo, being discussed on different levels due to the complexity of the issue, which is marred by legal tussles and economic implications. Transportation Undersecretary Timothy John R. Batan said the agency and the Department of Finance (DOF) are now reviewing the viability of the plan.
Restart of discussions
“Discussions are ongoing among the DOF, DOTr [Department of Transportation] and other concerned government agencies on this subject,” Batan told the BusinessMirror. “The government is reviewing the best approach that will best serve the public’s interest.” Under the buyout plan, the government aims to acquire MRT Corp., the owner of the train line, controlled by businessman Robert
John L. Sobrepeña, through a holding company. This will free the government up from the equity rentals that the State pays to operate the railway system. To recall, the government entered into a build-lease-transfer agreement with MRT Corp. two decades ago for the construction of the train facility along Edsa to cater to the growing public transportation needs in Metro Manila. Continued on A2
n US 51.8870 n japan 0.4744 n UK 70.1408 n HK 6.6101 n CHINA 8.1764 n singapore 38.8027 n australia 39.0813 n EU 61.8337 n SAUDI arabia 13.8354
Source: BSP (May 11, 2018 )