Lopez-led First Gen Corporation (FGen) is hoping for proactive reforms in the country’s current power policies to help encourage investors to push for renewable energy (RE).

During the Annual Stockholders Meeting on Thursday, May 29, FGen President Francis Giles Puno said that certain regulations pose challenges to power investments, as he shared suggestions for the energy sector to help address these issues.

“In recent years, we have faced an increasingly challenging power situation. The country’s dwindling reserves are symptomatic of aging power plants struggling to respond to drastically increasing power demand,” he said in his keynote speech.

Stronger government support, according to the FGen chief, would benefit major RE technologies such as geothermal, hydropower, and liquefied natural gas (LNG), while an improved competitive selection process (CSP) would offer balanced commercial terms to power generators and investors.

Puno also pointed out that residential consumers could greatly benefit from being included in the Retail Competition and Open Access (RCOA) program, as it would allow them to choose their own electricity provider. 

He also hoped that the coal moratorium, which halts certain coal-fired power projects from operations, will “reverse the concerning trend of coal exceeding over 60 percent of our power mix from coal supply that is substantially imported from countries such as Indonesia and Australia.”

“In recent years, we have faced an increasingly challenging power situation. The country’s dwindling reserves are symptomatic of aging power plants struggling to respond to drastically increasing power demand. This increase in power demand is largely caused by intensifying heat and rapidly growing economic activity. Each year, the urgency to address capacity issues has become more and more pronounced. These are not business issues, but extremely important national issues which require the need for stronger, more collaborative partnership. We look forward to this elevated collaboration,” he elaborated.

He also highlighted the need to re-evaluate market price caps, which limit electricity rates that affect power generators’ profits, which in turn, makes investors hesitant to fund their projects.

“In an ideal world, they [market price caps] can be removed, but then, they [government or regulator] can also adjust it so that you allow generators to make money, because it’s merchant. It’s not running every day,” he told reporters in an ambush interview.

“Merchant financing becomes very problematic because even the market mechanisms are not rewarding you for the risk that you are taking.”

FGen’s chief financial officer Emmanuel Singson added that the company’s capital expenditures (CAPEX) is worth about US$601 million or approximately ₱33 billion.

“Ninety percent is actually for the Energy Development Corp. (EDC), so geothermal, for the drilling, [the] batteries,” he cited.