Lopez-led First Gen Corp. has proposed five regulatory policies and market mechanisms to make power investments more attractive and investor-friendly.
“There are regulatory policies and market mechanism structures that make critical power investments difficult to sustain. We urgently need policy reform to encourage — not deter — clean energy investment,” First Gen president Francis Giles Puno said.
He said First Gen “welcomes and appreciates the continuous dialogue with partners in government and industry regarding five critical concerns.”
Puno said the government should reevaluate market price caps that “compress margins and scare off much-needed investments.”
He also called for strengthening government support for “more predictable longer-term offtake and other commercially viable structures and credit guarantees” for major infrastructure such as geothermal, hydro, liquefied natural gas and the additional power plants needed to meet the country’s growing energy needs.
He said the regulator should also improve the competitive selection process (CSP) to offer more balanced commercial terms to power generators and investors.
Puno urged the implementation of the “much-delayed” retail competition and open access, 24 years after the Electric Power Reform Act was signed into law, “allowing for more customers including households to choose their electricity provider.”
He also urged the government to “continue to enforce the coal moratorium, reversing the concerning trend of coal exceeding over 60% of the power mix from coal supply that is substantially imported from countries such as Indonesia and Australia.”
“Noble missions still require financial muscle. In our capital-intensive industry, financial stability is a necessity,” Puno said. “Our growth plans include significant investments to expand our renewable capacity, and reinforce our flexible natural gas portfolio to meet increasing and evolving energy demands. Without margins, we cannot strengthen our investments in our envisioned low-carbon and renewable energy portfolio.”
First Gen has set a $601 million capital expenditure target this year, with the bulk to be spent for the drilling operations unit Energy Development Corp.
The company aims to have 13,000 megawatts of clean energy capacity by 2030 to power the country’s growing demand for energy.
“In recent years, we have faced an increasingly challenging power situation. The country’s dwindling reserves are symptomatic of aging power plants struggling to respond to drastically increasing power demand,” Puno said.
“This increase in power demand is largely caused by intensifying heat and rapidly growing economic activity.”
“Each year, the urgency to address capacity issues has become more and more pronounced,” he said.
“These are not business issues, but extremely important national issues which require the need for stronger, more collaborative partnership. We look forward to this elevated collaboration.”
