ABOITIZPOWER subsidiary Davao Light and Power Company (Davao Light) is scouting for other alternative sources after the prices of coal had exponentially increased.
Rodger Velasco, Davao Light President and Chief Operating Officer, told the media in a press conference on Wednesday afternoon, October 5, that the generation rate has increased because of the global increase in fuel prices as the power distributor sources 50 percent of its power from non-renewable sources, like diesel and coal.
Various factors had made gas and coal more expensive, including Russia’s invasion of Ukraine which has disrupted its value chain.
Velasco added that the coal price had "surprisingly" increased eight times compared to its price last year.
The current weakening of the peso had further aggravated its increase.
"Ang naka-triple whammy sa atin (What gave us a triple whammy) is the forex [foreign exchange]. Forex is now close to P60 versus sa (the) dollar," Velasco said.
Admittedly, this could further lead to an increase in the consumer's electric bill.
Mark Lim, AboitizPower Coal Group assistant vice president, revealed that the NewCastle coal average price last year was from $85 to $90 per metric ton (MT). However, this had exponentially increased to an average of $200/MT.
"Global market prices in the market are beyond our control," he said.
Lim said that coal remains to be the country's largest energy mix.
The official said the costly energy source and commitment towards more holistic sourcing had prompted them to explore other sources of reliable energy.
"Providing reliable energy which is being challenged by the worldwide disruption of the demand balance for fuel products due to the Russia-Ukraine. Unfortunately, it is way beyond their control," he said.
While their company is gearing towards a more sustainable renewable source, he said that they cannot immediately give up on coal.
"If we give in to the pressure and give up coal, where will the Philippine Grid replace its energy needs?” Lim said.
Lim revealed that some countries, which fully-shifted to renewable sources, are currently experiencing problems when it comes to their power supply.
"While we aspire to be 100 percent renewables, given the lessons of world events, we need to learn from the experience from the developed countries who went full-renewables too soon. These countries are now being forced to restart their own coal power stations and are now paying the price," the power official said.
Davao Light’s two suppliers of coal power energy are Aboitiz-owned Therma South Inc. (TSI) in Binugao, Toril, and the 300-MW coal-fired power plant of San Miguel Consolidated Power Corporation (SMCPC) in Malita, Davao del Sur.
Velasco, meanwhile, said they are exerting efforts to cushion the uncertain price of their generation costs.
Currently, the remaining power distributor sources around 50 percent of its supply from hydropower plants. This allows the power distributor to keep its current rates lower compared to other areas in the country.
Velasco said Davao Light encourages its customers to be prudent and efficient in the use of electricity, by checking their daily routines and activities and seeing where they can efficiently use electricity. RGL