THE Department of Energy (DoE) said it will continue to pursue a program inviting China to put up merchant power plants in the Philippines to help augment the supply deficiency.
Energy Secretary Alfonso G. Cusi told a legislative hearing on Thursday;
“We asked both Japan and China to help us put up a merchant plant and this is part of an MoU (memorandum of understanding) that we successfully signed in China.”
He was appearing before the Joint Congressional Power Committee (JCPC) to present the DoE’s initiatives to respond to the deficient power supply on the Luzon grid, which resulted in yellow and red alert notices from the system operator as reserve power thinned, resulting in rotational brownouts in April.
Aside from the China-funded coal-fired power plants, the DoE has encouraged private sector investment in the construction of an import facility for liquefied natural gas (LNG).
In March, Mr. Cusi said he had issued the notice to proceed to Lopez-controlled First Gen Corp. and Tokyo Gas Co., Ltd., which have signed a joint development agreement to build an LNG facility.
“I have received the invitation of Tokyo Gas and First Gen (for) their ground-breaking (on) May 29,” he said.
Mr. Cusi said his invitation to China was first brought up during his visit to that country in 2016, which led to the signing of the MoU in 2017, and further firmed up during the visit of President Rodrigo R. Duterte to China last month.
Mr. Cusi was part of that visit for the second Belt and Road Forum, which came at a time when tension between the two countries had been heightened.
He said instead of asking for a grant, he had asked China to provide funding to Chinese investors in building merchant power plants, or those without a signed power supply agreement (PSA), but sell their output on the electricity spot market.
“The available supply will be put in the electricity market and will be there upon demand,” he said.
He said China had committed to build merchant plants with a capacity of between 600-1,200 megawatts (MW). Chinese investors are looking at putting up a plant in Luzon and another in Cebu, each with a capacity of between 300-600 MW.
Mr. Cusi said the specific location of the two plants will be up to the Chinese investors after taking into consideration the system impact study.
“DoE is trying to build capacity and we are technology-neutral because we understand the need to have sufficient capacity. Some LGUs (local government units) are prohibiting the establishment of some technology,” he said, referring to resistance by local officials to coal-fired power plants.
“For example, Negros has a not-in-my-backyard policy,” he said. — Victor V. Saulon
