Davao Light in search of alternative energy sources

Photo credit to Philippine Gazette

Davao Light and Power Company (Davao Light), a subsidiary of ABOITIZPOWER, is looking for other alternative sources after the exponential increase in coal prices.

Rodger Velasco, president and chief operating officer of Davao Light, told the media during a press conference on Wednesday afternoon October 5 that the production rate had increased due to the global increase in fuel prices. , the electricity distributor purchasing 50% of its electricity from non-renewable sources, such as diesel and coal.

Various factors made gas and coal more expensive, including the Russian invasion of Ukraine which disrupted its value chain.

Velasco added that the price of coal had “surprisingly” increased eight times from its price last year.

The current weakening of the peso had further aggravated its appreciation.

“Ang naka-triple whammy sa atin (What gave us a triple whammy) is forex [foreign exchange]. Forex is now close to P60 against its (the) dollar,” Velasco said.

Certainly, this could still lead to an increase in the consumer’s electricity bill.

Mark Lim, assistant vice president of AboitizPower Coal Group, revealed that the average coal price in NewCastle last year was $85 to $90 per metric ton (MT). However, this had increased exponentially to an average of $200/MT.

“World market prices in the market are beyond our control,” he said.

Lim said coal remains the country’s largest energy mix.

The official said the expensive energy source and commitment to a more holistic supply prompted them to explore other reliable energy sources.

“To provide reliable energy that is challenged by the global disruption of the balance of demand for petroleum products due to Russia and Ukraine. Unfortunately, this is far beyond their control,” did he declare.

As their company shifts to a more sustainable renewable source, he said they can’t immediately ditch coal.

“If we give in to pressure and give up coal, where will the Philippine grid replace its energy needs? Lim said.

Lim revealed that some countries, which have fully switched to renewable energy sources, are currently facing power supply problems.

“As we aspire to be 100% renewable, given the lessons of world events, we must learn from the experience of developed countries that switched to renewables too soon. These countries are now being forced to restart their own power plants. coal-fired power stations and are now paying the price,” said the head of electricity.

Davao Light’s two coal-fired power providers are Aboitiz-owned Therma South Inc. (TSI) in Binugao, Toril, and San Miguel Consolidated Power Corporation’s (SMCPC) 300 MW coal-fired power plant in Malita , Davao del Sur.

Velasco, meanwhile, said it is making efforts to cushion the uncertain price tag from its production costs.

Currently, the remaining electricity distributor derives approximately 50% of its supply from hydroelectric plants. This allows the power distributor to keep its current rates lower compared to other parts of the country.

Velasco said Davao Light encourages its customers to be careful and efficient in their use of electricity, by checking their daily routines and activities and seeing where they can use electricity efficiently. RGL

Rosemary C. Kearney