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Energy Sector Welcomes US Investors
by Philippine Resources - April 18, 2021
As the country aims to make its power supplies more stable and sustainable, Energy Secretary Alfonso G. Cusi invited US companies to invest in the Philippine energy sector on Thursday, especially in renewables and nuclear power.
“I hope our American friends in the business community will again take a look at our new initiatives that aim to make the Philippines rife with many investment opportunities,” Mr Cusi said during his talk at the virtual economic briefing “PH-US at 75: Strengthening Ties through Sustainable Recovery.”
He invited US businesses to participate in the Department of Energy's Green Energy Option Program (GEOP) and Green Energy Auction Program (GEAP) (GEAP). Users who use at least 100 kilowatts of power will use GEOP to access retail energy providers who generate electricity from renewables, while GEAP enables eligible RE (renewable energy) developers to sell their produce to the rest of the power industry.
“I want to invite you to participate in these renewable programs,” Mr Cusi said.
According to Mr Cusi, one of the Department of Energy's priorities in its revised Philippine Energy Plan (PEP) 2018-2040 is to improve the production of renewable and indigenous energy sources including geothermal, hydro, and natural gas to fulfill economic growth demands.
As a result, he added, the current PEP envisions a renewable energy scenario with slower growth in overall primary energy production. “Coal and oil shares will also continue to decrease due to the use of alternative fuels for transport, among others,” he said.
Mr Cusi said he would like to see more private sector involvement in geothermal production when asked which region of RE he would like to see more private sector participation in.
“Geothermal energy is an area that we would really like to tap and develop. That’s the kind of power we need, and we’d like to see investors from the US doing a 100% participation in the development of our geothermal energy,” he said during the virtual event’s panel discussion.
Mr Cusi also emphasized the investment opportunity in nuclear energy. “I am a firm believer that integrating nuclear power into the country’s energy mix would significantly help us meet our future power requirements,” he said.
PEP had assumed the incorporation of nuclear power in the energy mix by 2035 until President Rodrigo R. Duterte signed the order establishing the Nuclear Energy Program Inter-Agency Committee, according to Mr Cusi. In December, the President received a report from an inter-agency commission that examined the implementation of a national role for a Nuclear Energy Program.
Through the development of small compact reactors that can be used for off-grid areas or remote islands, Mr Cusi believes that nuclear power could be integrated into the generation mix as early as 2027.
This will be based on the passage of legislation regulating nuclear power, he said.
He also encouraged business leaders to explore the Philippine Conventional Energy Contracting Program, which seeks to encourage exploration by providing areas with possible oil and gas reserves. An updated petroleum service contract awarding process is included in the scheme, allowing developers to compete for exploration projects by open selection or appointment.
“I am happy to share that as a result of our strong promotional efforts, both locally and abroad, as of December 2020, we received a total of 14 applications for nominated and new areas,” Mr Cusi said.
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Philippine Resources - May 07, 2021
Semirara Mining Expects Profit Recovery This Year
Semirara Mining and Power Corp. (SMPC), a publicly traded integrated energy firm, expect some profit recovery this year, owing to improved coal and power demand and costs. SMPC chairman and CEO Isidro Consunji said at the company's virtual stockholders' meeting that the company's bottom line will boost as the coal and energy markets rebound from last year's historic lows. “To take advantage of the upswing, we will capitalize on our COVID-19 resiliency and adaptation strategy of focusing on our people, finances, and execution skills. However, given our operational headwinds and until our country reaches herd immunity, it is unlikely that we will return to our pre-pandemic profit level this year,” he said. The business ended in 2020 with a combined net income of P3.3 billion, down 66% from P9.6 billion the previous year. Revenues dropped 36.2 per cent to P23.3 billion as coal production, sales, and prices fell, while energy sales fell due to low power rates and Southwest Luzon Power Generation Corp's (SLPGC) expected and unplanned outages. The coal division of SMPC and the SLPGC plants will be the key drivers of development this year. With remedial steps introduced in Molave North Block 7 (NB7), the coal industry is expected to reach 13 million metric tons, according to SMPC president and COO Maria Cristina Gotianun. “This year, we expect our coal business to perform better on the back of recovering consumption and prices. The remedial measures we have been implementing since December have also allowed us to steadily normalize production. Now that the water seepage at NB7 has gone down to manageable levels, we expect annual production to hit 13 million metric tons,” she said. Due to excessive water seepages, SMPC postponed mining operations in Molave NB7 in early December, reducing coal output by 13% to 13.2 million metric tons. SLPGC is expected to drive profits in SMPC's power market due to higher sales, but Sem-Calaca Power Corp. (SCPC) is expected to produce poor performance. SCPC is the owner of the Calaca coal-fired power plant in Batangas, which it bought from the government in 2009 for $362 million. In the same location, SLPGC operates a 2x150-MW coal power plant. “For this year, we expect uneven results from our power subsidiaries. SLPGC is set to stage a strong profit recovery because of higher plant availability and better spot market prices. Unfortunately, SCPC is likely to deliver disappointing results because of the forced outage of its Unit 2 beginning Dec. 3 last year,” Gotianun said. SCPC's outage was triggered by a seven-month-old generator stator failing. Repairs are currently being negotiated with generator provider GE, according to Gotianun. “While they have agreed to cover the majority of the costs related to fixing the equipment, we are intent on making them shoulder all the necessary expenses. We expect to complete our negotiations within the year,” she said. “In the meantime, we are doing our best to fast track the repair of the generator. If all goes well, Unit 2 can be up and running by the third quarter of this year,” Gotianun said. This year, SMPC will invest P4 billion to rebound from last year's slump. The overall sum will be divided between SCPC and SLPGC for their prevention and repair services, with P2.9 billion going to buy mining and service equipment for the coal industry. Since the COVID-19 pandemic placed a burden on the company's liquidity last year, the management agreed to delay P3.7 billion of CAPEX to this year as part of its cash saving steps.
Philippine Resources - May 07, 2021
Australian Mining Firms Show Interest in the Philippines
According to Australia's Ambassador to the Philippines, Steven Robinson, several Australian mining firms have shown interest in mining in the Philippines, and the recent lifting of a nine-year ban on new mining ventures has paved the way for the possibility of responsible and world-class mining. Robinson said that mining if conducted safely and in accordance with international standards, could help the Philippines recover from the effects of the pandemic's economic impact. “The miners that we already have here—Orica [Philippines], OceanaGold, Red 5 [group], a number of them—are already thinking about what the future holds for them as a result of that ban being lifted,” he said in a virtual briefing on Monday. “They have started to reach out to us just in recent times to express interest in mining across the Philippines. I think that is a very positive step for the Philippines and good for Australian miners here,” he added, when asked to comment on the lifting of the ban. Malacanang recently released Executive Order No. 130, effectively lifting the nine-year ban on new mining deals. The order reversed a clause of then-President Benigno Aquino III's Executive Order No. 79, which was issued in 2012. The EO included a clause prohibiting the issuance of new mining licenses or mining output sharing arrangements unless a new revenue-sharing scheme was established. President Rodrigo Duterte said that the mining tax scheme included in the Tax Reform for Acceleration and Inclusion (TRAIN) Act had already met the EO's requirements. The TRAIN Act increased the excise on minerals, mining goods, and quarry services from 2% to 4%, lowering personal income taxes while increasing consumption taxes. Duterte previously stated that the country had only used about 5% of its natural wealth. According to the Australian ambassador, this demonstrated that there was something that could be achieved in the world to assist in its economic recovery. “The Philippines is a natural resource-rich country, and there’s much that could be done here that will really benefit the Philippines’ recovery, and Australian firms know that,” Robinson said.
Philippine Resources - May 07, 2021
AC Energy Focuses on 12GW of Renewable Energy Projects
AC Energy (ACEN) is operating on approximately 12 gigawatts (GW) of renewable energy (RE) projects, more than double its goal of five GW for 2025, as it strives to become Southeast Asia's largest listed RE network. At COL Financial's briefing, ACEN President and CEO Eric Francia said the 12GW of projects placed the Ayala-led company in a fantastic position to achieve its long-term goals. Solar and wind platforms will make up the majority of the projects it plans to begin in 2021. With 5,200 megawatts (MW), Australia leads the way, followed by the Philippines with 3,400MW, Vietnam with 2,400MW, and India and other Asia-Pacific countries with 900MW. 1,000MW of the 12GW projects in the pipeline are expected to reach financial close in the next six to twelve months, bringing the company more than halfway to its target. By the end of the year, ACEN hopes to obtain regulatory clearance for the influx of foreign funds. The Ayala Group's power arm is maintaining a follow-on offering (FOO) until Friday, with shares priced at Php6.50 per share. “We are grateful for the continued support of our regulators and for the overwhelming response we received from the institutional investors during the book-building process. The exceptional investor support reinforces AC Energy’s position as the region’s leading renewables platform,” Francia said in a statement disclosed to the Philippine Stock Exchange. The FOO is part of a five-step effort by the company to generate Php30 billion for clean energy programs this year. “The FOO completes the company’s successful fundraising efforts this year and allows it to play a meaningful role in the green-led recovery,” Francia added.