DOE crafts policy on retirement of power plants

Published January 8, 2021, 7:00 AM

by Myrna M. Velasco

The Department of Energy (DOE) will be sorting out a policy to mark off power generation plants that shall already be retired in the country, so provision of electricity to consumers could be improved.

Energy Secretary Alfonso G. Cusi explained that the government will not just be looking at the age of the power plants, but also the facet of their operations as to how efficient and reliable these have been in delivering power supply and service to the consumers.

Energy Secretary Alfonso G. Cusi (Source: https://www.bloomberg.com)
Energy Secretary Alfonso G. Cusi (Source: https://www.bloomberg.com)

He noted that the energy department is similarly weighing on prospective replacements of the power facilities to be retired or to be ordered to cease their operations – primarily the type of technology that shall be deployed for their capacity replacements.

“In what we’ve been processing as power projects in the department, we’re also looking at the retirement of the old power plants,” the energy chief stressed.

He qualified though that it is not just the age or years of operations of the power facilities that are being factored in; because several power companies have opted to upgrade and reinforced the capacity of their assets through the years, so these somehow improved their efficiencies.

“We will be considering all factors – not just the age, because we need power. So we can’t just have arbitrary decision,” Cusi pointed out.

The energy secretary said they are still firming up the list as to which power plants shall already be rendered as ‘candidates for retirement’; but he noted that the DOE will not make the list public yet until after they have weighed all factors that will become the basis of their decision to terminate the operation of certain power facilities.

Many of the country’s electric generating plants were built in the 1990s with the flurry of independent power producer (IPP) investments when the Philippines was pummeled by its worst power crisis.

Several other facilities – primarily hydros and geothermal plants – were also built way back in the 1970s, being part of the energy diversification as well as energy independence strategies pursued by the State then.

Power plant technologies have their respective operating life cycles – ranging from 25-30 years to 50 years (or even 80 years with refurbishment); and even the old fleets could still be producing electricity reliably through stretch decades especially if these were operated efficiently throughout their life cycle.

Cusi cannot categorically state yet if the power plant retirements will start this year; or while the energy sector braces through transition when demand is still comparatively lower because of the economic slump caused by the pandemic.

The energy chief emphasized though that a policy will have to be crafted on it first, so the relevant stakeholders and investors will be apprised on the guidelines and they can also strategize on their investment plans moving forward.

“In the power sector, we continue to build the capacity because you know that our supply was barely meeting the 2019 demand prior to the pandemic; and we’re trying to prepare the power supply into a level where we will have normal operations already,” Cusi pointed out.

He acknowledged that gestation period for power plant projects could take some time, hence, it is highly necessary to re-calibrate policies now as it could take several years more before power supply in the country could burst through tight conditions anew.

 
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