Philippines seeks investors to power growth, extra 7,000 MW needed

Philippines seeks investors to power growth, extra 7,000 MW needed

The Philippines needs to build an additional 7,000 megawatts of power
generation capacity over the next five years to support its fast-growing
economy and wants foreign investors to help, its energy minister said on
Monday.

Firms from China, South Korea, Russia and Japan were interested in new
Philippine power projects, and the president would soon sign an executive
order to address soaring power demand by giving priority status to get new
projects ready in half the time, Energy Secretary Alfonso Cusi told Reuters.

The Philippines, with a population of more than 100 million people and one
of the world's fastest growing economies, aims to double its power
generation capacity by 2030 to avoid a return to the frequent blackouts
suffered during the 1990s.

At the end of June 2016, installed capacity was 20,055 megawatts, a third of
it fuelled by coal, according to government data. Power is generated 34
percent by coal, 34 percent by oil and gas and 32 percent from renewable
sources.

The Philippines would be technology neutral, Cusi said, to avoid being
shackled to caps and quotas and create more competition, with the aim of
slashing electricity prices for industry and consumers. With no state
subsidies, prices are the highest in Southeast Asia.

"What we want is to build our supply to a level that is meeting the demand
with sufficient reserve for industry," Cusi said in an interview.

"So it's competition at work. Whoever comes first, offers a good project
development, and it will bring down the cost - yes."

CHINESE INTEREST

Chinese firms were interested in a lead role, he said, in areas such as
hydro, nuclear, coal and LNG areas, plus construction of those facilities
and their financing.

"We were there basically to tell (the Chinese) that our energy sector is
open for business," he said, asked why an energy ministry delegation was in
Beijing last month.

At least three Japanese firms, including Osaka Gas and Tokyo Gas had been in
talks about investments in new LNG projects, he added.

Plans for gas power plants and storage facilities are in preparation for the
anticipated depletion by 2024 of gas fields at the Malampaya project, an
offshore field that fuels 40 percent of Luzon island, home to the capital
Manila.

Although energy security was a priority, Cusi said it was too early to
discuss exploration of offshore gas fields known as SC 72 and SC 75, at the
Reed Bank in the South China Sea.

Though those are located within the exclusive economic zone of the
Philippines, the sites fall within the vast area of the waterway that China
lays claim to. By some industry estimates, SC 72 alone may have triple the
reserves of Malampaya.

But Cusi said the energy ministry needed to await direction from the foreign
ministry on the status of diplomatic relations with China before lifting a
suspension on exploration in those areas.

"It needs to be clarified," he said. "We want to go forward with it without
any disruption."

He said it was too soon to discuss whether the two countries could share the
resources, as has been suggested by President Rodrigo Duterte.

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Link to Original Article:
http://energy.economictimes.indiatimes.com/news/power/philippines-seeks-inve
stors-to-power-growth-extra-7000-mw-needed/57377740

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com