Energy chief vows to reduce power costs and attract more investments

The new Department of Energy head on Tuesday vowed to fulfill the target of the Marcos administration to lower power costs, secure the country’s energy supply, ensure access to electricity and entice more investments.

Energy Secretary-designate Raphael Lotilla said in a phone patch during the post-SONA economic briefing President Ferdinand Marcos Jr. expressed concern over the country’s energy security and the need to develop indigenous energy resources.

Lotilla said the country’s fuel requirements were mostly imported, while 45 percent of power plants were using coal for fuel, with 80 percent of coal sourced from other countries. Another 11.8 percent of the energy for power was oil-based.

“These show our country’s vulnerability to volatilities in global prices. DOE will continue to work with the rest of the government to provide well-targeted assistance to the most vulnerable communities and to shift to more electrification in mass transport and industry,” Lotilla said.

He said the DOE would also pursue the electrification targets as there are still more than a million unserved households in the country, with more than 800,000 in Mindanao.

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“The president pointed out that our power supply is, however, inadequate. This is particularly true with the loss of Malampaya natural gas for the 1200-MW Ilijan plant due to declining field production,” Lotilla said.

The energy chief said Marcos wanted that “top priority be given to address decisively the uncertainties regarding investment incentives to the entire upstream sector, especially natural gas.”

“The uncertainty over the interpretation of PD [Presidential Decree] 87 allowing the service contractor’s corporate taxes to form part of the government’s 60-percent net share has hindered investments and rollout in this sector,” Lotilla said.

He said the DOE would submit a clear articulation of the proposed policy and seek legislative action to ensure a stable investment regime across different administrations.

Lotilla said Marcos also underscored a level playing field and promotion of competition to attract investments.

“This is clear in his inclusion of EPIRA [Electric Power Industry Reform Act] amendments relating to the ERC [Energy Regulatory Commission] in his legislative agenda,” he said.

Lotilla also cited the need to plan and roll out the transmission grid to avoid stranded RE power that could not be brought to the market, as what happened on Negros island.

“This forced solar to displace geothermal, a sad case of RE displacing RE resulting in wasted power,” he said.

“As for offshore wind and other renewable energy sources and technologies, laying out the vision, planning for the necessary support infrastructure and liberalizing the investment requirements demand that we address them now in order for the future to happen,” Lotilla said.

DOE director for power bureau Mario Marasigan said while the country has sufficient supply of power and oil, imported fuels dictate the cost of energy.

“As such, the Department of Energy’s goal is to reduce cost through the following—exploitation of our indigenous resources not only the renewable energy but also the aspiration to find additional Malampaya gas,” Marasigan said.

“We have to address the current concern of our investors, particularly in the renewable energy that will support our reliable and clean energy sources. and the thing is to address first the foreign ownership issues in terms of exploration and development of our renewable energy,” Marasigan said.

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