The debate surrounding the Maharlika Investment Corporation’s (MIC) proposed investment strategy continues to intensify, particularly regarding its potential acquisition of a 10% stake in the National Grid Corporation of the Philippines (NGCP). Former Energy Undersecretary and current president of the National Association of Electricity Consumers for Reforms Inc. (NASECORE), Petronilo Ilagan, has taken a firm stance against this move, advocating instead for a focus on power generation plants. His argument is rooted in the pressing realities of the Philippine energy sector, where the primary challenges lie not in transmission, but in the generation of electricity itself.
Ilagan’s critique is pointed: “While national security may be a valid concern, we believe that the MIF chose the wrong industry within the energy sector—transmission—when it should be investing in generation plants.” This perspective highlights a crucial aspect of the energy landscape in the Philippines. The country’s electricity supply has been consistently strained, particularly during peak months like April and May, when demand surges and aging fossil fuel plants frequently fail. This situation compels distribution utilities to turn to the wholesale electricity spot market (WESM), where prices can skyrocket due to limited availability. Ilagan emphasizes that this dependency on spot market purchases underscores the urgent need for additional power generation capacity, which is essential for stabilizing supply and controlling costs.
The implications of Ilagan’s argument extend beyond immediate supply issues. He contends that investing in power generation would foster competition within the sector, potentially leading to lower costs and improved services for consumers. The acquisition of a stake in NGCP, a monopoly, would unlikely yield significant benefits in terms of economic growth or energy security. Instead, Ilagan suggests that the MIC should channel its resources into off-grid investments, which could have immediate and tangible benefits for underserved regions, thereby promoting inclusive development.
Moreover, Ilagan points out that the current struggles faced by NGCP in securing ancillary services are symptomatic of the broader issue of insufficient power supply. The stability of the grid is compromised when generation capacity is inadequate, leading to a vicious cycle of outages and increased reliance on expensive spot market electricity. “Investing in power generation infrastructure also aligns with MIC’s objectives of generating sustainable returns and creating a significant economic impact,” he asserts, reinforcing the notion that addressing the root causes of the energy crisis is essential for long-term stability.
The call for a strategic pivot towards power generation investments is not merely a theoretical exercise; it is a pragmatic approach to revitalizing the Philippine economy. Increased electricity supply and reduced prices could attract more businesses, stimulating economic activity and fostering growth. As Ilagan articulates, “For these reasons, we urge MIC to carefully evaluate the proposed acquisition and instead consider a strategic pivot toward investments that directly address the country’s power supply challenges.”
As the MIC deliberates its next steps, the implications of Ilagan’s recommendations could shape the future landscape of the Philippine energy sector. Prioritizing power generation over transmission investments may not only alleviate current supply issues but also align with global climate commitments, paving the way for a more resilient and sustainable energy future.
