The high cost and unreliable supply of
electricity in the Philippines are now the main deterrents to invest in the
country, according to foreign business leaders who see the problem as a
persuasive reason to pour their monies elsewhere.
Vietnam, for instance, has overtaken the Philippines in terms of
foreign direct investments.
While Manila lagged behind its neighbors in Southeast
Asia, Hanoi – the capital of Vietnam- is now enjoying a double-digit foreign
direct investment (FDI) levels.
According to a survey done by the International
Energy Consultants (IEC), an Australian-based consulting firm specializing in
Asian power markets, electricity rates in the Philippines are the third highest
in Asia and fourth in the Asia-Pacific region.
The Philippines’s power rates are also
the 16th highest in the world.
Given these circumstances, the government is
working hard on adding more capacity and acknowledged that it needs to add
around 1,000 megawatts of new generating capacity every year between now and
2030 if it is to overcome the country energy crisis.
This means construction of more power plants,
more in particular coal-fired power plants that are cheaper to construct and
operate with greater capacity than the so-called renewable power sources.
The Philippines electricity prices at an
average cost of P15 per kilowatt hour are some of the highest in Asia and have
become prohibitive to many investors. Compared to booming countries like
Malaysia, Thailand and Indonesia, the Philippines is badly suffering from a dip
in foreign direct investment with expensive electricity cost as the main
culprit.
Solution?
Construction of more coal-fired power plants
to meet the need to produce about thousands of megawatts a year.
Overtaken
Data from the regional grouping showed that “erstwhile tail
ender” Vietnam, whose population stood at 96 million as of July 2017, has
overtaken the Philippines in attracting foreign direct investments with $12.6
billion in FDI in 2016.
The Philippines obtained $7.9 billion, according to three
investment watchdogs Moody’s, Standard & Poor, and Fitch Ratings.
A total of $53.9
billion in FDI went to Singapore; the same year $11.3 billion went to Malaysia.
Both
the Philippines and Vietnam have at least 300,000 square kilometers in total
land area.
Coal
plants
To address the situation, President
Rodrigo Duterte said
the Philippines will continue to use coal in power generation but will
implement new technologies to minimize emissions.
“But for as long as the most
viable fuel is coal and cheapest so that the power can also be delivered the
energy to the people at a much lower price, then we’ll have no other
alternative except to upgrade the technology to its fullest―to limit,” Duterte
said during a recent visit to Sarangani for the ground-breaking of another
coal-fired-power plant.
The President said he sees
nothing wrong with the government’s plan to put up new coal-fired power plants
to boost power supply in the country.
“You open the Philippines for all
power players, I guarantee you the electricity will become cheaper,” he pointed
out.
The President said in January
that building more coal-fired power plants is necessary to meet the nation’s
growing energy needs and for the Philippines to stay competitive in attracting
foreign investors.
These pronouncements of President
Duterte delighted residents and officials of the municipality of Sual led by
Mayor Roberto Arcinue following a report that a multi-national company is keen
on putting up another coal-fired-power plant in their town that would produce
1,000 megawatts.
The company, the report said,
will be using ultra-supercritical combustion technology that greatly reduces
pollution, as prescribed by the President.
In
welcoming the entry of another power plant in their locality, Mayor Arcinue
said this would mean hundreds of jobs for the residents and millions of pesos
of additional revenues for the municipality. (PRESS RELEASE)
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