The Manila Electric Co. (Meralco) said Tuesday that power rates during the Marcos administration could be reduced if and when the government enforces the right policies that would address spiraling fuel prices among others.
'Reducing electricity prices is always possible but involves looking into the many factors that affect movements in electricity rates. The biggest and most volatile part of the bill, which is the generation charge, is driven by fuel prices, forex [foreign exchange], and supply-demand situation. Fuel prices mostly reflect global oil prices, as even the Malampaya natural gas is indexed on oil.
What we need are sound government policies that can better address movements on fuel and forex, and an environment that encourages the development of additional capacities, brought by new generating plants,' Espinosa said in response to a query of a Meralco shareholder.
With recent surges in energy prices, Espinosa stressed the importance of diversity of fuel sources, for both energy security and affordability, including nuclear.
'Meralco will favorably consider contracting reasonable and competitively priced supply from generation companies, including the BNPP [Bataan Nuclear Power Plant] if the same should become operational,' Espinosa said.
Based on data from the Department of Energy, while coal-fired projects will still account for about a third or 32 percent of new power generating capacity, natural gas-fired projects will be almost half, or 48 percent, of new supply. The remaining 20 percent will use renewable sources.
Hybrid renewable energy plants that combine solar, with battery energy storage systems (BESS), promise to address the intermittency of such RE resources.
For Meralo, the country's largest power distribution utility firm, it is looking to secure 850 MW of RE-based mid-merit supply, which was initially proposed to be met by a hybrid plant consisting of solar and BESS.
Meralco's power generation arm, Meralco PowerGen Corp., is planning to transition to clean energy. It targets to build 1,500 MW of RE capacity in seven years and to be coal-free by 2050 as next-generation clean technologies mature technically and economically.