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Myrna Velasco

New WESM design to improve market trading efficiencies

The new design of the trading platform of the Wholesale Electricity Spot Market (WESM) will expectedly improve efficiencies in the buying and selling of power commodity and will similarly bring the maturity of the deregulated electricity sector to higher notches. One of the key features of the WESM’s new market management system (NMMS) will be the shortened dispatch interval – that was originally from one hour to just five minutes, parallel to practice in more mature jurisdictions, such as Australia. With that, WESM operator Philippine Electricity Market Corporation (PEMC) noted that inter-hour deviations and imbalances in power trading would be lessened. Additionally, the system improvement calls for a “single pricing mechanism as a result of the shortened dispatch interval that will no longer require ex-post runs.” Prior to the changes, WESM pricing had …

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Mindanao’s base load power investments on halt for 7-10 years

Investments for base load power plants in Mindanao will be on standstill for the next 7-10 years given the overcapacity situation that the grid will be putting up with in the short- to medium term. This has been the assessment of Alsons Energy Development Corporation of the Alcantara group – a company of which power investments had been concentrated in Mindanao grid. “Speaking only of Mindanao, there will be no need for new baseload capacity in the next seven to 10 years,” Alsons Power Group Vice President for Business Development Joseph C. Nocos said. He noted “Mindanao will have enough power supply to support its development plans.” This is a shared prognosis by many power project developers in Mindanao, with the grid now seeing at least 50-percent overcapacity in supply. Nocos further qualified “the …

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Meralco’s 9-month profit declines to P15.7 billion

Amid continuing robust sales growth, the net income of Manila Electric Company (Meralco) in nine months this year had been down 3.0-percent to P15.676 billion from last year’s P16.149 billion. The utility firm’s core income had also been trimmed down 5.0-percent to P14.966 billion, from the year-ago level of P15.795 billion. This translates to reported P13.91 earnings per share, hence, affording the power utility firm to declare regular and special dividends to its shareholders.  Meralco’s prospective dividend policy is equivalent to 50-percent of its core income for this year. Juxtaposed with its overall performance in the first nine month, the company expressed confidence that they are on target achieving their P19 billion profit guidance for this year. Meralco Chairman Manuel V. Pangilinan said in terms of core net income for the entire year, …

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Slight hikes in fuel prices today

Pump prices are on slight adjustments this week, with the price of gasoline up by a very lean P0.20 per liter; while diesel prices had been down P0.10 per liter and kerosene by P0.15 per liter. On the pricing advisory of the oil companies, this round of adjustment will still be effective either 12:01a.m. or 6:00 a.m. today (October 25). As of press time, the oil companies that already adjusted prices include Pilipinas Shell Petroleum Corporation; and Eastern Petroleum Corporation. The fundamentals of global oil markets, often having spillover effect on heavily import-dependent market like the Philippines, had seen the string of price hikes in the past several weeks but settled a bit in recent days. With swings in developments, analysts and oil producers portend that the ‘era of down cycle’ in oil prices …

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Former DOE chief offers his view on ‘energy mix economics’

To get discussions moving to the next level on the proposed energy mix for the country, former Energy Secretary and PHINMA Energy President Francisco L. Viray offered insights on what metrics the energy planners shall be assessing and taking into consideration for the policy. At this stage, energy mix had become the industry’s buzzword but the Department of Energy (DOE) is still at ground zero when it comes to the specifics of the plans and parameters for such policy crafting. The fixed 30-30-30 prescription of technology sharing for coal, gas and renewables remained a deep puzzle and still too-complicated terrain for the industry players, hence, they have been seeking for clarity of the energy mix economics being presented by the energy department. In an exclusive interview, Viray noted that the starting point for …

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P80-B subsidy needed to lower PH power rates

The government will need to shell out at least P80 billion in annual subsidy for the power sector to gain that leverage of lowering rates to the level of the subsidized energy markets of Asian neighbors. This has been the assessment of Australian consulting firm International Energy Consultants (IEC) and its prescription on the never-ending debate if there are measures that can be done to bring down power rates similar to those enjoyed by other countries. Filipinos are incessantly complaining about perceived high electricity tariffs, despite recent result of the IEC survey indicating that power rates in the franchise area of Manila Electric Company (Meralco) had already been down 28 percent (excluding the value-added tax component) compared to 2012. IEC Managing Director John Morris said “government subsidies continued to play to make power …

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PNOC-RC could take over Agus-Pulangui operations

Instead of decommissioning the Philippine National Oil Company-Renewables Corporation (PNOC-RC), the Department of Energy (DOE) is proposing that it be positioned to takeover the operations of the 982-megawatt Agus-Pulangui hydropower complex in Mindanao in case the final decision is to retain these assets under government ownership. Energy Undersecretary Felix William Fuentebella said this is an option they are seriously considering at this point – and also a proposal that the department would lodge to Congress relative to the future of the Mindanao hydropower facilities. “Instead of creating a new company, our course of action is to align PNOC-RC for the operations of Agus-Pulangui assets, after all, it’s already an existing entity,” he said. It must be noted that stakeholders in Mindanao have been proposing the creation of a new entity to assume the …

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DOE asked to define energy mix

The Department of Energy (DOE) is now being asked the tough questions as to the specific parameters of the proposed energy mix policy so investors can be properly guided on ongoing and future projects. AC Energy Holdings President ad Chief Executive Officer Eric T. Francia said the energy mix “is clearly the big picture” when it comes to policy agendas that the current administration must work on, but until now, the details have been blurry. He said investors, especially in the power sector, have been batting for clarity and a lot of the specifics that must go with that proposed policy. “When you say energy mix, it’s not only the high level goal but implications on the how. And do you do it by technology? What is really their (government) stand, what’s the …

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DOE urged to streamline permit processing

The Senate has urged the Department of Energy (DOE) to push for the issuance of an Executive Order (EO) that shall streamline approvals and permitting processes for energy sector projects. Senate Committee on Energy Chairman Sherwin T. Gatchalian said “there are things that the Secretary (Energy Secretary Alfonso G. Cusi) can do very, very fast – red tape is number one.” The lawmaker expounded “if he (Cusi) can convince the President to come out with an Executive Order just to sort out all of these red tape (in project permitting), that will be a big help.” He said such will be highly feasible, with perception that President Rodrigo Duterte is indeed into strongly exercising the powers of the Executive Branch. The proposed EO delves on treating energy projects to be of ‘national significance’. “By …

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Shell offers cheaper solution for LNG import facility

The local subsidiary of Royal Dutch Shell plc is dangling a relatively cheaper and quicker-to-develop floating storage and regasification unit (FSRU) technology as a viable solution for the country’s proposed liquefied natural gas (LNG) import facility. FSRUs are deemed lower cost alternative compared to onshore LNG facilities. For instance, at $1.0 billion land-based LNG terminal, the equivalent investment for FSRUs could just be at $300 million to $400 million, according to experts. Additionally, the installation process would generally be faster at 2-3 years compared to four (4) years minimum for onshore handling facility’s development. Shell Philippines Country Chairman Edgar O. Chua said they are currently exploring the viability of FSRU facility for the country’s future gas needs. But cost assumptions are still being crunched for that technology option compared to landed LNG terminal. Chua …

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