Members of the electricity value chain underscored the importance of clear and fair policy guidelines and regulation due to the huge investments needed for energy projects.
“[There are] risks that the private sector needs to take,” Aboitiz Power Corp. chief corporate services officer Carlos Aboitiz said, referring to private investments in more generation capacities and emerging technologies.
“The capital intensity of the industry [highlights] the importance of orchestrating and creating an environment of certainty for investors,” said Aboitiz who served as a moderator during a recent Philippine Chamber of Commerce and Industry panel discussion on the energy sector.
First Gen Corp. president and chief operating officer Francis Giles Puno said the Philippine Energy Plan (PEP) requires a significant amount of investment.
The PEP 2020-2040 (PEP) estimates that an additional capacity of 92.3 gigawatts of renewable energy projects by 2040 under a Clean Energy Scenario will cost P5.8 trillion in investments.
Renewable energy will have a 35-percent and 50-percent share in the power generation mix by 2030 and 2040, respectively.
“First Gen’s balance sheet cannot do it all alone. AboitizPower’s balance sheet cannot do it all alone,” Puno said. “So, it does require a lot of collaboration.”
The panel discussion focused on perspectives of industry stakeholders, featured representatives from the generation, transmission, distribution and retail electricity supplier (RES) segments.
National Grid Corpo. of the Philippines (NGCP) assistant vice president and head of transmission planning Redi Remoroza said their priority is to complete all the required transmission facilities to ensure that all committed power plant projects can be accommodated.
NGCP recommended that the Energy Regulatory Commission (ERC) allow them to build the transmission backbone in identified high resource areas for renewable energy even if the power plant projects are still at their indicative stage.
“In our experience, in the third regulatory period, the ERC allowed us to implement transmission projects if the power plants are committed… But the plant won’t become committed if there are some uncertainties [on whether] the lines will be available,” Remoroza said,
Meanwhile, Manila Electric Co., a part of the distribution segment, said their priority is to provide reliable service at the least cost possible and help end-users transition to innovations like solar rooftops and net metering.
“We have to adjust and learn to accommodate innovations [like] solar rooftops,” said Meralco vice president and head of utility economics Lawrence Fernandez.
“We’re now seeing even end-users injecting power back to the grid, making the distribution system more complex…Because of this, we’ll have to continue to work closely with stakeholders and even policy leaders and regulators,” he said.
Energy Secretary Raphael Lotilla and ERC chairperson Monalisa Dimalanta emphasized the importance of effectively regulating and guiding the electrical power sector, especially since it cuts across different parts of the economy.
“It is important for us to engage with the private sector, especially in the context of a primarily private sector-driven energy and power sector,” Lotilla said.
“All the risks are with the private sector, and therefore we have to take into account what if later on there are changes in the regulatory regime, not only in the domestic market, but [also] externally,” he said.
