DOE changes tack on energy mix: no cap, no quota on technologies

By Myrna M. Velasco – December 5, 2016, 10:01 PM

from Manila Bulletin

The Department of Energy (DOE) is changing the proposed energy mix metrics, as the measure propounded under the Duterte administration shall be based on a “70-20-10 formula” in meeting the country’s long-term electricity needs – and this goes without imposing quota or caps on specific technologies.

The newly proposed energy mix equation somehow ditched the “30-30-30 rule” that the past administration had thought out – wherein it prescribed 30-percent cap each for coal, gas, and renewable energy installations; and the balance of 10-percent representing other technologies.Energy Secretary Alfonso G. Cusi explained that the 70 percent in the mix shall account for the power system’s baseload capacity requirements; 20-percent shall be mid-merit capacity; and 10-percent for peaking generation facilities.

“The energy mix policy that we should have is based on the need of the system – so we are setting a percentage for baseload, mid-merit and peaking – but not on technology, because it’s like you are putting a cap on what technology shall meet those needs,” the energy chief expounded.

Cusi further averred “What I am trying to point out is: why do we need to put a cap and a quota? Some are arguing it should be gas … but then that could mean even if you are expensive, I will give that share to you in the mix because I imposed gas, I don’t think that will be a prudent step.”

He added “it would be like saying: if one technology becomes competitive and gaining ground, then we set a quota or we cap it to give way to the others. No we can’t do that because we are still in that situation wherein we are still trying to ensure our country’s need for sufficient power supply.”

For baseload, in particular, several technologies could swarm in to provide that need of the system – and such could either be coal, nuclear, geothermal, gas or even big hydro facilities, he said.

“But we will not cap any particular technology, what we’re saying here is, these technologies should be able to compete with each other,” Cusi stressed.

He also cited the recent statements of gas technology player First Gen Corporation that with rising coal prices, gas will turn out to be a “less expensive option” for the Filipino consumers. “If that was what First Gen was saying as I’ve read in the newspapers, that coal is becoming expensive, then that becomes beneficial for gas…then they can compete and ease out some coal capacities in the mix,” he reiterated.

“We are not anti-environment, we are also addressing that, but we should have a policy that shall address first our need for sufficient and affordable cost of electricity so we can achieve our aspired economic growths,” Cusi said.

He further indicated the DOE is setting a relatively high percentage for baseload capacity because the vision of the Duterte administration would be to widen the base of manufacturing in the country to prop goals of inclusive growth that shall have trickle-down effect on the Filipino people.

“We said we need 70-percent baseload, it’s like setting the foundation of your energy needs…if anything happens, there’s always that 70-percent of your capacity that you can rely on,” he said.