Government return to power generation cannot be ruled out, says former official

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PSALM.GOV.PH

By Angelica Y. Yang, Journalist

The Department of Energy’s proposal to embark on new power generation projects should not be dismissed out of hand because of the difficulty of balancing energy security and affordability, said a former official. the National Office for Renewable Energies (NREB).

“Perhaps the proposal is for the government to undertake or pursue new power generation projects – if so, I think this should be carefully assessed, perhaps resisting the temptation to reject the idea immediately,” said Monalisa C. Dimalanta, former president of NREB. Business world via Viber during the weekend.

“As we continue to chart the course towards an energy transition that meets both our energy security requirements and accessibility challenges, everyone really needs to be on deck,” she added.

Energy Secretary Alfonso G. Cusi has asked the Senate Energy Committee to consider allowing the government to engage in “limited” electricity generation – not to compete with the private sector – but to increase network reserves. The proposal would reverse a decades-long trend towards the privatization of electricity.

Ms Dimalanta said the government remained in the power generation sector despite the privatization mandate of the Electricity Industry Reform Act 2001 (EPIRA).

“(Government) continues to own a significant portfolio of generating assets through PSALM (Power Sector Assets and Liabilities Management Corp.) which have not yet been privatized and through NPC (National Power Corp.) in off-grid areas “, she says.

She added that allowing the government to reinstate power generation cannot only solve the country’s energy problems.

“Relying on government alone is not enough, especially to address the enormous challenge of energy security. (But the) government plays an important role as it (seeks to promote) good governance and enforcement of laws to create a stable investment climate…and ensuring it does not crowd out the private sector to ensure competition and a level playing field,” Ms. Dimalanta said.

If the government decides to go ahead with its plan to foray into electricity generation, it will have to revise the law, according to Alberto R. Dalusung III, who is currently the energy transition adviser for the non-profit organization. government Institute of Climate and Sustainable Cities.

“EPIRA should be amended. They should change the law… This means that the government (returns) in generation. My understanding as a layman is that this is not permitted under EPIRA (which states there should be) no new government investment in production,” Dalusung told BusinessWorld during a a video call last week.

He said Cusi’s proposal indicates the government intends to play a “supportive role” in power generation, not compete with private companies in doing so.

During a June 10 Senate hearing, Cusi said government-owned power plants are best used to provide backup power when needed. He said the arrangement could be the “antidote” to National Grid Corp’s repeated noncompliance. of the Philippines in securing the necessary firm reserves.

Luzon’s grid was placed under a series of red and yellow alerts between May 31 and June 2, triggering rotating brownouts due to forced plant shutdowns, thinning reserves and warmer temperatures. high.


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