BY RUEL “Mapalakapak” CAMBA
The high cost and unreliable supply of
electricity in the Philippines are now the main deterrents to investing in the
country, according to foreign business leaders who see the problem as a
persuasive reason to invest 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.
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 1,000 megawatts a year.
Ovetaken
Data from the regional grouping showed that “erstwhile
tailender” 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
groundbreaking 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 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, Sual residents said this would mean hundreds of
jobs for the people and millions of pesos of additional revenues for the
municipality.
This, they said, should be a welcome
development for the province which dovetails the thrust of Gov. Amado I. Espino
III to transform Pangasinan into an investment haven to create jobs and income
opportunities for the people.
The prospective investor, Korean
Electric Power Company, is spending some two billion US dollars for the power
plant project.
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