EU envoy lauds CSP policy for power co-ops and distributors

by Lenie Lectura, 14 July 2015
from BusinessMirror

The European Union (EU) on Tuesday expressed approval on a recently issued policy of the Department of Energy (DOE) that seeks to bid out the power requirements of distribution utilities (DUs) and electric cooperatives (ECs).

“The recently adopted measure to require distribution utilities to secure supply agreements using competitive processes is much welcome and will contribute to increase competitiveness in the sector,” EU Ambassador Guy Ledoux said in his opening speech during the Third EU-Philippines meeting on energy.

Before he resigned, former DOE Secretary Carlos Jericho L. Petilla issued DOE Circular 2015-06-0008, requiring all DUs and ECs to secure their power requirements via a Competitive Selection Process (CSP) instead of entering into negotiated contracts with power producers.

The policy has yet to be implemented, pending the issuance of the implementing rules and regulations by the Energy Regulatory Commission (ERC).

When asked on his personal insight, Ledoux said the CSP, if and when implemented, will level the playing field for all industry players.

“Currently, the competitive segment in energy supply in the Philippines is not very large. With this decree, this obliges the distributor to secure any new supply through competitive process to get the lowest price and consumers will benefit from that. It’s a major measure that has been applauded,” Ledoux said when querry of his personal view on the new policy during a media briefing.

Ledoux noted that one of the challenges faced by the country is to ensure the provision of reliable and affordable energy. It was earlier projected that generation capacity must double between 2015 to 2025 to support the country’s growing economy.

The Philippines currently utilizes 26 percent of renewable energy (RE) in its power-generation mix. The EU wants to increase the share to at least 27 percent by 2030.

The European private sector is already strongly involved in the Philippine energy sector, said Ledoux. “We have a lot to learn from each other. The EU and the Philippines have been cooperating on energy for many years. Through our partnership agreement we committed to stronger engagement in energy and climate change,” he said.

DOE Officer in Charge Zenaida Monsada said her office welcomes the continuing interest and support of the EU in the energy sector, particularly in electrification, RE and energy efficiency. “The DOE looks forward to a more fruitful collaboration and cooperation with the EU in the coming years.”

A high level of cooperation between the EU and the Philippines can be illustrated with various initiatives, like the EU-sponsored SWITCH project, which has developed action plans for each energy-consuming sectors.

Germany has provided technical assistance for the formulation of the Philippines Renewable Energy Act and European investors are very present whether for the upgrading of the Malampaya gas offshore platform or the establishment of the solar power plant in Negros Oriental.

The EU has committed P12 billion for cooperation in energy between 2014 to 2020. A first program of P3 billion is intended to support the DOE’s 90 percent electrification target. Ledoux said the P3-billion grant will be finalized this year.

“We will work together to ensure that renewable energy technology also reaches people who need it the most. I am speaking of those four million households in the Philippines that do not yet have access to energy. Energy is now one of the priority areas for our partnership in the next six years,” he said.

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