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AES investment in power to reduce electricity rates


The construction of a new coal-fired power plant in Zambales — a result of the $1 billion investment in the energy sector President Benigno "Noynoy" Aquino III secured in the United States — augurs lower electricity rates once the facility is operational, the Energy Department said Thursday. In a press briefing in Malacañang, Energy Secretary Jose Rene Almendras said the 600-megawatt power plant American firm AES Corp. will build in Masinloc would boost the Philippine baseload capacity. The news power plant is part of AES Corp.’s expansion plans for the existing 660-megawatt power plant, according to him. "The investment, because it is going to be additional baseload generation [that is] coal-fired [and] which is one of the cheaper options for us, will help bring [down] or stabilize your cost structure," said Almendras. The energy chief was part of Aquino's official delegation during his weeklong working visit to the US that started on Sept. 20. According to Almendras, energy costs spike up on lack of baseload generation from coal-fired, geothermal, and hydropower plants, forcing government to operate back-up sources such as the more expensive diesel-fired facilities. "We know that is going to be more expensive and that's the reason why our generating costs spike. So yes, [the new coal-fired plant] will help keep [power rates] down," said Almendras. However, the energy chief said the specific rates are "time-determined" depending on which plants are running in a particular time. AES Corp. will start the two-year construction by early 2011, Almendras said. Meanwhile, government is securing more investments from the domestic power sector for 1,000 MW more in baseload generation, he said. Almendras said a US-based engineering firm proposed to rehabilitate the mothballed Bataan Nuclear Power Plant, but the Philippines will not yet act on the offer — one of many — because the administration is still trying to determine its policy on nuclear energy. Should Congress approve a P50 million allocation under the proposed 2011 budget, then government will start formal studies on the feasibility of using nuclear power, he said. "The study we want to do is [on] the non-military use of nuclear energy. This is really along the lines of something that we agreed to with the rest of the Association of Southeast Asian Nations in Da Lat when I went there… We all agreed — all the ministers of energy — that we would like to work together in preparing the safety standards for non-military nuclear use." he said. Almendras was referring to meeting of ASEAN energy ministers meeting in Da Lat City, Vietnam last July. "The reason for that is the ASEAN ministers acknowledge that we have a different geographic and geophysical structure. We have earthquakes, Indonesia has earthquakes, things like that," he added. Almendras said that the Philippines will save money for research if it conducts the study with other ASEAN members. Energy ministers will finalize the terms of reference in July or August next year when they meet again, he added. —VS, GMANews.TV

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