BAGUIO CITY—The government has encouraged the private sector to build more conventional power plants because these produce electricity that is cheaper than power supplied by hydroelectric and other renewable energy facilities, Energy Secretary Jericho Petilla said.
But the Department of Energy (DOE) has also pushed for renewable power projects to maintain a balanced mix of conventional and nonconventional power plants and to curb their environmental impact, Petilla said at the sidelines of a renewable energy planning workshop here on Monday.
Renewable energy plants, like wind farms, represent 30 percent of a mix of electricity producers in the country, he said.
As more conventional plants are activated, he said, the government must encourage investors to produce more renewable plants to “sustain the energy mix.”
“More coal-fired plants are being built because [their electricity production] is sold directly to rural electric cooperatives and local governments,” he said.
But Petilla said the government is considering other avenues to address the impact of conventional power producers, including a proposed environmental tariff for plants that use coal.
“It is not the DOE which should say we should cut down on coal. That is the call of the DENR (Department of Environment and Natural Resources). Our concern is to promote energy [production] that is allowed in this country,” he said.
Instead of banning coal-fired plants, some Cabinet officials are proposing to impose tariff on coal that would be used to subsidize the production of renewable power plants and reduce the price of renewable energy, he said.
But Petilla warned that the consequence of these proposals could be higher power rates.
Unlike other countries, such as Indonesia, the Philippines has removed state subsidies in energy production. A market-driven industry still puts a high price on electricity produced by renewable power plants, Petilla said.
Republic Act No. 9136 (Electric Power Industry Reform Act of 2001) also bars the government from owning and developing power plants, he said.
In Indonesia, state-run power plants are allowed to increase the number of renewable power plants because it enforces a uniform price for electricity through subsidies.
Indonesia spends 22 percent of its annual budget on energy subsidy, he said. “If you have a growing economy, a 22-percent annual subsidy is a disaster waiting to happen [because] one of these days, it would blow up [in their face] so Indonesia is trying to remove its subsidy,” Petilla said.
The Philippines is a “no-subsidy regime” by comparison, he said. Vincent Cabreza, Inquirer Northern Luzon