PH energy sector needs $30B in 15 years – MVP

by Madelaine B. Miraflor – June 22, 2016

from Manila Bulletin

The Philippines needs to invest up to $30 billion over the next 15 years to beef up power capacity and ensure enough capacity, said Meralco Chairman Manuel V. Pangilinan. .

But then, if the large number of the supply will come from renewable sources, this would also mean higher cost for consumers and the

Pangilinan said during the “AIM for Change” roundtable discussion on Wednesday that the power sector should receive more attention than what it is getting from the incoming administration.government should make this clear as early as now.

“In broad terms, the industry as it stands today has about 16,000 megawatts [MW ]of installed capacity or a little over that. Currently, demand for power is at 12,000 MW and it’s growing. On paper, it looks like we do have sufficient reserves,” Pangilinan told reporters.

“But I just got a text that it’s now the second day we’re on yellow alert, which means the actual nameplate capacity in relation to the actual capacity to produce power versus the capacity is much lower, especially if some plants are on planned or unplanned shutdowns,” he added.

Pangilinan said that by 2030, the demand could go up as high as 20,000 to 24,000 MW.

“Clearly, the country needs more capacities to be built in the next 15 years or so. We do know we have to build more plants with at least 10,000 MW capacity, at least $2 million per MW, so you’re talking $20 billion to $30 billion of investments needed in the next 15 years or so,” he specified.

Another factor to consider is the direction towards the use of renewable energy, which still uses expensive technology.

If the trajectory that the government wants the industry to follow is moving towards more RE, Pangilinan said, consumers would eventually have to contend with higher power cost.

“The argument for renewables is that the sun shines everywhere, wind is everywhere, biofuels are everywhere etc. The seduction for renewables is there.  But can you build RE to build enough renewables to fill up this 10,000 to 12,000 MW of additional capacity and more importantly, how much would it cost,” Pangilinan said.

“You have to address that, it’s not cheap, it’s not going to be cheaper than coal or gas. Remember, there’s always a price to protect the environment. We need a policy direction, [we need to specify] what is the appropriate fuel mix for our people. And once that’s decided, businesses will build the plants, whether it is a gas plant, coal plant or renewable plant. So we just need a direction,” he added.

To recall, the Department of Energy (DOE) has already passed on to the next administration the responsibility of deciding on the country’s desired fuel mix.

As of now, the largest sources of power in the country are still coal and gas.

 

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