Viewpoint: Phil power rates high because consumers pay for energy security and environmental sustainability

From Mr. Kris Balibukel
February 5, 2018

The recent past reveals that the country achieved high energy security (from a high share of indigenous energy comprising of Malampaya gas, a geothermal program that made the Philippines the second biggest geothermal producer in the world, and a number of large hydropower projects. The country also achieved the highest share of renewables in the region and ranked first in Environmental Sustainability in the 2017 World Energy Council Energy Trilemma Index. But we also suffer one of the highest rates in Asia because consumers paid for energy security and environmental sustainability.

We achieved high energy security and high environmental sustainability because we had a sellers market erstwhile driven by the monopoly of government in power generation.

We also achieved high energy security and environmental sustainability at the cost of paying the highest rates in Asia which muted GDP growth because manufacturing hardy contributes what with costly power.

You seem to forget that the biggest reform under EPIRA is the transformation of the industry from a sellers market to a buyers market empowering the latter to make the purchase decision. What you espouse is to diminish that power to buy from where it is cheap. You wish to maintain the same paradigm of energy security and environmental sustainability that festered the problem of high power rates which only generators like.

BTW, if you review the supply chain of coal and gas (or LNG), you will also realize that the gas supply is exposed to more risks and bigger too (e.g., limited number of suppliers and sources, specialized loading, transporting, unloading and storage requirements, etc).

Sometimes, gas proponents like to mention that coal suffers from transport risks on account of the cases where Indonesian-flagged coal barges (5,000 tons) are prevented from transporting to the Philippines. These cases hardly represent the coal supply to the Philippines. Because requirements run in the millions of tons, power plants normally transport coal in Panamax vesssels (60,000 to 80,000) with international flags not affected by bans on Indonesian-flagged barges by the Indonesian government.