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MANILA, Philippines – The Department of Energy (DOE) plans to come up with a fuel mix policy that will encourage energy diversification and wean the Philippines off its dependence on coal.
Currently, most of the country’s power plants run on coal. The proposed fuel mix policy will include renewable energy sources and liquefied natural gas (LNG).
On Sunday, May 11, DOE Secretary Carlos Jericho Petilla said the proposed mix would include LNG, which is considered preferable for sustainable economic growth because it is cleaner than fossil fuel, although it is more expensive.
Petilla did not specify the proportion of each energy source in the mix.
“I don’t want to say 25 percent will be gas and then all of a sudden the price of which will shoot up. I will be blamed for it,” he said.
“However, we have to have a proper mix. It can’t be always coal,” Petilla added.
Malampaya: next phases
Over 30% of the Philippines’ energy requirements are sourced from the Malampaya Deep Water Gas-to-Power Project off Palawan.
Three power plants in the Luzon grid depend on Malampaya. These include Sta Rita, San Lorenzo, and Ilijan.
Petilla earlier warned the Philippines’ largest natural gas producer could start to lose output starting 2015 and might run out by 2024 “if no further activities are undertaken until 2024.”
To maintain the current level of gas production and ensure ample supply of power for the country, the gas project is currently undergoing the next phases of development.
Two additional subsea wells worth $250 million will be installed for Phase 2 of the project, while the $756-million Phase 3 involves the installation of a platform.
The gas project is a joint undertaking of the DOE and Shell Philippines Exploration B.V. on behalf of joint-venture partners Chevron Malampaya LLC and PNOC Exploration Corporation.
Support for renewable energy
Petilla said the government has received proposals from the private sector to support and improve natural gas investments in the country. Among the suggestions raised were providing more fiscal incentives, consistently implementing policies and regulations, creating a conducive investment climate, and improving infrastructure and interagency collaboration.
To support the government’s renewable energy programs, the DOE has signed a $1-billion financing guarantee from the US Export-Import Bank.
Under the memorandum of understanding, the DOE and the US Eximbank will work together to identify options for the use of up to $1 billion in loan guarantees or direct dollar loans to finance US exports in support of Philippine energy projects, and promote development opportunities on renewable energy facilities such as regassication facilities, pipelines and transportation infrastructures, among others.
The MOU was signed by DOE Energy Policy and Planning bureau director Jesus Tamang, DOE undersecretary Ramon Allan Oca, DOE undersecretary Raul Aguilos, DOE undersecretary Loreta Ayson, US Eximbank director Patricia Loui, and US Department of Commerce deputy assistant secretary Holly Vineyard.
DOE Undersecretary Raul Aguilos said the MOU can support the development of energy projects in the Philippines.
He added, “The signing of the memorandum of understanding is an important venue to cultivate partnerships and cooperation between the Philippine government and the American private sector.” – Rappler.com
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