RE generators say industry competitive, market abuse unlikely
By Jenina P. Ibañez – July 18, 2021 | 8:00 pm
from Business World
RENEWABLE ENERGY (RE) developers said there is sufficient competition in the industry to make market abuse unlikely, noting that any pricing issues that have emerged are due largely to capacity constraints.
The Developers of Renewable Energy for AdvanceMent, Inc. (DREAM) industry association made the remarks at a forum organized by the competition regulator.
“We have enough players in the industry to avoid market abuse,” DREAM President Jose M. Layug said Saturday at a Philippine Competition Commission (PCC) event.
“Particularly during times where there’s a lot of supply, market concentration is limited. In other words, there is inability on the part of the generators to control the market.”
Although there are market leaders, the entry of small players has widened ownership in power generation, he said. The Herfindahl–Hirschman Index, which measures market concentration, indicates that the industry has a sufficient number of entrants to avoid such abuse, he added.
The PCC is conducting an investigation into the industry following recent power outages on the Luzon Grid and whether they were the result of collusion. The PCC is working with the Energy Regulatory Commission (ERC), which ordered generation companies to explain the interruptions.
Energy Secretary Alfonso G. Cusi said his department is also looking into claims of sabotage.
The grid was placed on red alert after a series of unscheduled power plant outages, causing a spike in market prices.
Mr. Layug, who is a former Energy undersecretary, said that the country needs to build more transmission and distribution lines, along with more power plants, noting the increase in prices when supply is down.
“That’s why we’ve been pushing government to make power plant construction and development more efficient,” he said.
PCC Chairman Arsenio M. Balisacan said more work needs to be done in defining the roles of the PCC and ERC in regulating competition in the energy sector.
“I think that there… are places that are available for better coordination between the two regulators. In fact, we have signed a tripartite memorandum of agreement (MoA) — DoE, ERC, and PCC — toward improved coordination and exchange of information,” he said.
“So far with respect to the brownout case that was brought up to the commission by the Office of the President, we’re using that MoA… to get that sharing of information.”
