Energy mix rule needed

Gov’t told: This is to protect consumers from fuel price surges

Manila — Power generator First Gen Corporation is urging government to formulate an energy mix policy that would help shield consumers from price surges affecting specific power plant fuels.

First Gen — the country largest electricity producer which has been relying on natural gas as its main source of power — aired the call as prices of coal exhibited more volatility than usual this year.

“Prices of coal have more than doubled between January and October this year,” First Gen president and COO Francis Giles Puno said. “Such price volatility should give us reason to pause and think of other fuels we can use to protect consumers from erratic fuel price movements. One solution is to cap the share of specific fuels we use to generate our electricity.”

Coal is the largest source of power for the country’s power generators. Data from the Department of Energy (DOE) showed that, as of June 2016, coal-fired power plants accounted for 33 percent or 6,666 megawatts out of the country’s 20,055-MW total generating capacity.

But coal’s share in the mix is expected to expand significantly in the coming years.

According to the think tank Institute for Climate and Sustainable Cities (ICSC), there are 4,600 MW of committed and another 6,900 MW of indicative coal-fired power plants in the pipeline in the Philippines also as of June 2016.

With all those coal projects lined up, the country’s dependence on coal would increase to as much as 80 percent by 2030, global analytics firm IHS said.

“We recognize the role of coal in the mix, but that kind of dominance being forecast for this single fuel source will not be good for the economy, especially now when coal prices have turned volatile,” Puno said.

Coal prices, based on the benchmark Newcastle, traded as low as $49 per metric ton at the start of 2016, but surged as high as $108 in late October. So far this month, coal prices have hovered between $90 and $110/MT.