MANILA, Philippines - First Gen Corp. chairman Federico Lopez says the Philippines can tap coal as an alternative cheap source of power.
He says First Gen plans to import natural gas to support its power plants with an installed capacity of 2,763 megawatts, as the Malampaya will run out of resources in 2023.
"Coal, despite the fact that we don't have it in our portfolio today. I believe coal has a place in the grid. But what actually worried me, sometimes when you see all the plants that are online to come in, the big base load plants are really coal-fired because we don't have much more indigenous supply and there are hardly alternatives that are large base load scalable. For me, I think it has a place but we have to provide alternatives," Lopez told ANC.
"For our group, we're putting a lot of effort, a lot of energy, a lot of resources behind allowing the country to import natural gas at some point in time," he added.
He says the power cost in the Philippines is high compared to other Asian countries, because the government is not providing subsidies which resulted to a lower budget deficit.
He says that this is one of the reasons why the country received an investment grade rating from credit rating firms.
"I would actually say that the consequence of that, our rates are higher than the other countries because they have the ability to subsidize through their state owned corporations. There's a trade-off there. The country made that choice a long time ago not to subsidize because we reached a time when the losses from state-owned Napocor amounted to one-third of the consolidated public sector deficit... To a certain extent, the reason why we have investment grade rating is because we don't have a subsidized power sector," Lopez said.