DOE set to audit all power-related firms

by Lenie LecturaJuly 21, 2016

from Business Mirror

The Department of Energy (DOE) wants to conduct an audit on all power-generation firms and distribution utilities to determine if they are in compliance with existing laws and regulations.

In a roundtable organized by GE Philippines, the Department of Energy (DOE) spokesman said results of the audit will “better guide” the agency in crafting future policies under the watch of Energy Secretary Alfonso G.  Cusi and future energy secretaries.

“Yesterday [Wednesday], the DOE secretary already told the power bureau to draft a circular to conduct an audit not only on coal-fired plants, but also on the transmission and distribution sectors,” former lawmaker Wimpy Fuentebella said.

On the transmission sector, Fuentebella said “Transco [National Transmission Corp.] may conduct an audit on the transmission side, while it could be the NEA [National Electrification Administration] for the electric cooperatives.”

“There are already standards in place, so we will look into each power plant whether they are complying with all existing standards,” including those set by the Department of Environment and Natural Resources (DENR).

The audit would be conducted by competent people in the agency. Fuentebella said the result of the audit would be submitted to the Climate Change Commission and the DENR.

The DOE, he added, is also crafting an energy-mix policy. “We already have one but we will revisit that. It will be a fair classification. We are also looking at energy security from the consumer point of view. It should be fairly priced, reliable and secure,” Fuentebella said.

Coal power-plant operators who were present during the roundtable said they welcome an audit spearheaded by the government.

“We are open to government initiatives. We understand the need to do this, and we do not oppose it. What they intend to do makes a lot of sense,” they said.

“If they will try to formulate an energy policy that will guide the country in the next 20 years, then we need to know where we are starting from. I don’t think the industry will oppose that. We will support it,” said Frank Thiel, managing director of Quezon Power (Philippines) Ltd. Co.

Quezon Power owns and operates the 460-megawatt (MW) coal-fired power plant and the 31-kilometer transmission line in Mauban, Quezon.

GN Power also expressed support to the planned audit. “We welcome that, as long as the guidelines are clear and subject to existing policies,” company Vice President Ariel P. Punzalan said.

A new requirement imposed on new coal-power projects, however, does not sit well with the coal- plant operators.

“It would be tough for any coal- plant developer. With the new requirement, it’s going to be harder,” Punzalan said.

The Environmental Management Bureau has directed to require in the application for Environmental Compliance Certificate for operation of coal-fired power plants a clearance from the Climate Change Commission and the office of Sen. Loren B. Legarda prior to processing and approval of their applications.

Thiel said he has yet to read a copy of the memorandum issued by the DENR. “I was just informed about that, but I haven’t seen the memorandum yet, so I can’t comment,” he said.

Power-plant operators need to secure over 100 permits. Thiel said the number of permits that needed to be secured is 165. With the new requirement, “then that would now be 166 [permits].”

Meanwhile, GE Steam Power Systems Senior Sales Executive for Asia Pacific Massimo Gallizioli said his company offers power-generation technologies that provide high efficiency with less emission.

He said the newest coal plants being built using ultra-supercritical technology deliver up to 49-percent efficiency rates—significantly higher than the global average of 33 percent, leading to lower emissions and operating costs.

GE’s new double-reheat technology delivers an additional 1.5 percentage points of efficiency, leading to 3 percent lower emissions, which, Gallizioli explained, “can add up to $80 million in value for a 1,000-megawatt plant.”

Meanwhile, the Federation of Philippine Industries (FPI), which is composed of 34 industry associations and 120 manufacturer-members, fully supports the stand of President Duterte not to honor the government’s recent  Paris Protocol pledge to reduce greenhouse gases (GHGs) by 70 percent.

FPI Chairman Dr. Jesus L. Arranza noted that the Philippines is already a minimal contributor to carbon emissions—both on a total and per-capita basis—relative to the rest of the world, and already has a relatively high penetration of renewable-energy capacity.

“Economic growth and poverty alleviation are closely intertwined with power costs, which, for the Philippines, is one of the most expensive in the region.  Thus, coal power plants are without question the most viable option at this time and through the next several years,” Arranza said.

He said compared to the thousands of coal-fired power plants in developed countries, the Philippines has only 23 coal-fired power plants. These, Arranza said, are the backbones of the country’s generating sector, as the aggregate power produced by these plants constitutes 35 percent of the country’s total power generated at about 6,000 MW.

He said, “Coal power plants are base-load power plants that provide stable and dependable power that addresses the requirements of manufacturers and producers on a 24/7 basis.”

“Hence, compared to countries that are already fully industrialized, the Philippines should not be shackled by the Paris Protocol commitment and must pursue its own development and industrialization based on the best interest of its people, by addressing the GHG emission through reforestation and other cobenefit measures, such as improved energy efficiencies and usages, decongestion of traffic, which is a major cause of GHG,” Arranza said.