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Power industry warned against flouting gov’t rules on reserves

THE ENERGY industry can expect serious consequences if it continues to defy government policy on maintaining adequate reserves and plant shutdowns, the Department of Energy (DoE) said.

“We are recovering from COVID (coronavirus disease 2019) and we have elections next year. We have grave economic and political consequences if these power players do not comply,” Energy Undersecretary Felix William B. Fuentebella said during a virtual meeting of the Cabinet Cluster on climate change adaptation, mitigation, and disaster risk reduction.

“We expect compliance because the President has already acted on this. The Cabinet was informed. Enforcement agencies are on their toes, and we’re not only talking about (them addressing) anti-competitive behavior but also the implementation of penal provisions,” he added.

He said the rules for which compliance is expected include the competitive selection process in power procurement.

He added that the system operator should also adhere to the guidelines on ensuring sufficient reserves, and submitting the grid operating and maintenance program on time.

“Last March… we were seeing our reserves go down but more importantly what triggered (this were) power players that were refusing to follow specific policies laid down by the department,” Mr. Fuentebella said.

Asked to elaborate on the possible consequences, he noted that the DoE had no power to penalize industry members, though complaints may eventually be elevated to Congress in a process outlined in the Electric Power Industry Reform Act of 2001.

“The DoE can only recommend (to Congress) the cancellation or revocation of the franchise,” he said.

Between May 31 to June 2, the grid operator placed the Luzon grid under a series of yellow and red alerts, eventually triggering rotating brownouts amid forced outages, thinning reserves and higher temperatures.

Energy Secretary Alfonso G. Cusi, who was also present at the virtual meeting, detailed his department’s plans for tapping into renewable energy to enhance energy security.

“We need to improve our energy security and to do that, we have to tap the indigenous sources and renewable sources. So what we’re doing is, aside from solar, wind, tidal, we are expanding our hydro and the geothermal (capacities),” he said.

Mr. Cusi cited the opening up of large-scale geothermal projects to foreign investment during the third round of its open and competitive selection process, the upcoming green energy auction, and the moratorium on new coal-fired plants.

The DoE’s recent freeze on building greenfield coal plants is intended to mitigate the impact of climate change, he said.

“The position of the DoE has been (to pursue) climate justice… We are doing our share to contribute on reducing carbon emissions by increasing the share of renewable sources of energy,” Mr. Cusi added.

The Philippines’ first nationally determined contribution (NDC) to meet the goal of reducing greenhouse gas emissions by 75% by 2030, involves developing low carbon and resilient energy projects, he said.

NDCs are key to the Paris Agreement on Climate Change, which hopes to cap the global temperature rise to below 1.5 degrees Celsius. — Angelica Y. Yang

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