PH needs $30b worth of energy projects

by Alena Mae S. Flores – June 22, 2016 at 11:05 pm

from Manila Standard Today

The Philippines needs an additional 10,000 megawatts of power capacity in the next 15 years, which will require investments of up to $30 billion to support the growing economy, a top executive said Wednesday.

Manila Electric Co. chairman Manuel Pangilinan told reporters the current available capacity might not meet the growth in demand.

Pangilinan said total demand was currently at 12,000 megawatts, while installed capacity was estimated at 16,000 MW.  “On paper, it looks like we do have sufficient reserves,” he said.

Pangilinan, however, said the actual capacity from the existing power plants was lower as evidenced by the second day of ‘yellow alert’ for the Luzon grid, which reflected the thin reserves.

System operator National Grid Corporation of the Philippines on Wednesday declared Luzon under ‘yellow alert’ from 2 p.m. to 4 p.m. due to low level of contingency reserves brought about by insufficient supply.

Available capacity for Luzon was placed at 10,208 MW as of 8 a.m. Wednesday while peak demand was at 9,370 MW.

Meralco said Calaca 1 and Malaya 2 power plants were on limited output while Pagbilao 2 and Kalayaan 3 were on scheduled maintenance.

Other plants such as GN Power 1, South Luzon Power Generation Corp. 1, Angat Main 2 and Malaya 1 were still offline.

“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,” Pangilinan said.

He said there was a consensus that demand could rise to as much as 24,000 MW by 2030.

“Clearly the country needs more capacities to be built in the next 15 years or so. The question to this country is, you know you have to build power plants, because the economy will grow at 6, 7 to 8 percent. Whatever it is, and some of these plants especially some of the oil fired plants are too old, too expensive to operate,” he said.

“We do know we have to build at least 10,000 MW more plants, [for] at least $2 million per MW. You’re talking $20 billion to 30 billion of investments needed in the next 15 years or so,” Pangilinan said.

He said government should come up with a clear fuel mix, whether coal, gas or renewables, which the private sector could follow.

“We need a policy direction, what is the appropriate fuel mix for our people. And once that’s decided, businesses will build the plants, whether it’s a gas plant, coal plant or renewable plant. So we just need a direction,” he said.

Pangilinan said while there was a push towards clean energy, the government needed to quantify the cost of building renewable energy, which he said was more expensive.

“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. You have to address that. It’s not cheap. It’s not going to be cheaper than coal or gas,” Pangilinan said.

“Remember, there’s always a price you need to protect environment,” he said.